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Bitcoin is here to stay, but…here is the rule that people ignore!

December 4, 2017

I am surprised that friends ask me about Bitcoins, I am a psychologist not an economist. But, here is my take: Humans invented “Mediums of Exchange” since Neanderthal times. First they started with Abyssinian hunting rocks as medium of exchange for other things, than they moved to spices, then gold, then regular coins (The key to all economic exchanges!), credit cards and now Bitcoins (in 10,000 it will be ” Thought coins”!). A bitcoin is a computer generated digital “credit card.” If you have a Visa card, you can buy things on credit and pay back at the end of the month or on instalment. The retailer pays VISA 2% for the use of the card, VISA pays you 1% as “cash back.” The retailer gets more paying customers and makes a bigger profit. Everyone is happy. The smart consumer gets “free money case back” and “free credit,” the retailer gets more paying customers meaning “Free extra money,” VISA company gets the 1% “user fee” plus nice interest when you can’t pay the full amount at the end of the month (The poor pays high interest and the rich get free money).

Here comes the government and issues “regular money.” Everyone copies it with “Their Money” (Bond, shares, corporate credit, coupons, Bitcoins, etc). You get a secondary market, economy expands, people are happy, but…here is the rule people ignore: Bitcoin is your VISA without your card! Bitcoin is an electronic VISA. It is Based on a password! Maybe in a 100 years your password securing your bitcoin account will be 100% secure but not today. Think! The internet doubles in power every year! It is as stable as a baby that doubles in size every year. The problem with humans is that they can’t discern the difference between virtual money and real money, it is all calculated in before it comes out! Do you want to be rich? OK, anticipate things accurately! I can, can you? Which bitcoin company will prevail? Is Elon Musk do great things in 30 years? Did you know about Apple and Steve in 1998? When you marry that guy, do you know for sure he is the guy for you in 2040 too? We pay in the US for terrible education: They never show you how to anticipate anything! Read about “System 2” in Google. Bet you never heard of it? Change, and you’ll be rich. Buy Bitcoins when your great-grandchild turns 50! They will be safe.

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