Team Avalanche is hosting an event on Monday the 30th Nov 2020 at Springside Cafe to discuss the dos and don’ts of investing in this digital asset, and the potential opportunity for you. We have organized guest speakers, who between them have over a decades worth of experience and knowledge in the industry; and have seen and experienced the real scandals and now the real successes. There are two identical sessions. One at 14:00 and one at 18:00. To book your seat, get your free ticket on eventbrite https://www.eventbrite.com/e/team-avalanche-investment-opportunity-tickets-130300262593
THE TRUTH
“Bitcoin isn’t a get rich scheme, it’s a don’t get poor slowly scheme” – Jameson Lopp. There is a huge amount of hype and craze around the world of Bitcoin and cryptocurrencies. Massive amounts of debates and speculation with all the giants of the economic world argue for or against it. “What is it?” “Why should we care?” “What gives it value?” we ask ourselves. It is so easy to develop information fatigue and apathy, so with one blanket statement “oh it must be a scam”, we put the whole thing to bed. While this is by far the easiest route to take, if this – even if it were just a small possibility – could be one of the most important technological advancements we might have in this ever-changing world, would we want to be caught fast asleep; or wide awake to a new dawn and era? To make sense of the future, we first need to understand the past. We need to consider how money became what it is today. Money is a class of asset that is a medium of change. It should have the ability to retain purchasing power in the future, when needed to be retrieved and used at a later stage, long after the medium or commodity was initially acquired.. In order for us to trade goods and services with one another, we need to exchange something that both parties want, and is widely accepted everywhere. Money has taken many different forms over the centuries including livestock, wheat, shells and most notably precious metals like gold and silver. For something to be seen as valuable, and could work as “money” it needed to have the following traits and characteristics:
- it had to be portable
- it had to be recognizable
- must be durable
- in most cases it labour intensive in order to find it
- it had to be scarce
The challenges of carrying around heavy, or impractical and cumbersome commodities for trade became burdensome. To combat this problem paper receipts were introduced. You could store your gold at a goldsmith or merchant and receive a receipt or “bill” stipulating how much gold you left with them. (This was true for other precious metals like silver as well). People would use that receipt to trade with, and people would know that they could always go in and collect that gold should they wish to, so paper money became “as good as gold”. Over the years, and through government intervention, we eventually moved away from commodity money and entered a new world of fiat currency – which is currency backed by decree. Paper money was no longer backed by something that had value, but only had value because the government decreed it to have value. The value of money now solely rests on people’s trust that the government keeps its promises to back the currency. With the world going more and more digital, this became the natural progression for money to go. Since money has a central authority, moving into a digital space meant that the banks etc keep track of all transactions in a digital ledger. This is to ensure that no one can just create money by replicating files, like one would a MP3 file or other digital files that exist today. This is called the “double-spend” problem. The risk that a digital currency can be spent twice. The concern with this model, however, is that it has a few drawbacks. Money today is –
- Centralised : This means that it is controlled by one central authority. Very few people at the top decide on the financial stance of the many at the bottom.
- Unlimited: It can be printed as the government sees fit. When the market is inflated with more of it, the value of money drops, and so does your purchasing power.
- Corruption: Giving so much power to a limited few players with little repercussions can lead to corruption as seen throughout the world.
- Mismanagement: if poor fiscal or economic policies are adopted, or there is a poor implementation of good policies, this could eradicate the confidence of that currency, leaving detrimental effects on the societies that have to live in that turmoil. We only need to look at extreme cases like in Venezuela and Zimbabwe.
- Control: You are giving away control of your money to the government. They can decide to freeze your accounts or take control of your assets.
What is Bitcoin? Bitcoin is both a payment system and a digital currency, that solved the ‘double spend” problem without the need for a central authority. The payment system, or Blockchain, is a payment network consisting of hundreds of thousands of computers, all carrying a pseudo-anonymous, semi-transparent “ledger” or database that is decentralized. Anyone can see the transactions and balances, you just can’t see who is the person or persons behind the transactions, as it is recorded as a long string of characters known as a private key. It’s not a case where one computer or one entity holds or has control of the ledger. Every computer that participates within the network, across the world keeps a copy of the ledger. To try and take down the system, or hack into the system would mean you would have to take down hundreds of thousands of computers. Trying to change a single copy of the ledger to alter a transaction in order to steal Bitcoin, would make the one copy different from everyone else’s copy across the network, which would immediately be seen as illegitimate, as there needs to be consensus of a minimum of 51% of the network for something to be altered. It is important to note as well that the word “computer” is used very loosely. Though anyone can participate as a node in the network should they choose to, the amount of computing power and electricity needed to join the network is enormous. The reason for it is because the network, using elements of gamification, has to solve complicated maths algorithms in order to “win” a chance to process and legitimize a new block of transactions and record them onto the blockchain. The reward for this is a new portion of a Bitcoin. This is how new Bitcoin is mined. There can only ever be 21 million Bitcoin to ever be mined, and the rate at which it is mined is halved every 4 years. The node therefore is incentivized for recording, and securing the network. This allows for the transparency, the accuracy and the efficiency of the Blockchain to make Bitcoin a serious contender for the role of the banking system as it stands today. This also ensures the scarcity of Bitcoin as one can never be duplicated or created out of nothing. This mimics the properties of gold being scarce and labour intensive to find, which is part of the reason gold is so valuable. “Bitcoin is not ‘unregulated’. It is regulated by algorithm instead of being regulated by government bureaucracies. Un-corrupted.” – Andreas Antonopoulos The internet of money Think about the past, when the only way you could receive information was through major players in the media world – be it through television, radio or newspaper. In certain countries, this was an easy way to circulate politically driven agendas or propaganda if the media was biased or captured, choosing to paint information in a certain way or purposefully choosing to leave information out. Education was also for the elitist who could afford to send their children to the institutions that “owned” information. However, today the internet has decentralized information, making it easier to share and have access to information and knowledge across the world effectively in no time at all. Bitcoin and cryptocurrency is the “internet” of money, in that it allows funds to be shared borderlessly and effectively to absolutely anyone, bypassing the need for a middleman. “Bitcoin will do to the banks, what email did to the postal industry” – Rick Falkvinge
THE SCANDAL
While highlighting what the positives are by understanding what it is, it is important to know and understand the drawbacks of Bitcoin as well. There is still a long way to go and every new dawn certainly can cast a shadow.
- The misunderstanding of cryptocurrencies can cause many to be susceptible to scams, due to their lack of education on this topic, making them vulnerable to those that abuse their power as the one “who knows more”. It does make it more difficult to see the signs, when one is trying to capitalize in this industry, but with very little knowledge regarding it. This has caused a huge negative impact on the industry, with many dismissing the whole thing altogether, as the number of people who lose significant amounts of money rises continuously.
- Beating to a similar drum as before, the pseudo-anonymous aspect of Bitcoin and cryptocurrencies, while can be a huge benefit in some cases, has become the rhythms to other illegal activity as well. A more notorious case would be the rise of Silk Road on the dark web from 2011 until 2013. Wikipedia cites that “Silk Road was an online black market and the first modern darknet market, best known as a platform for selling illegal drugs. As part of the dark web, it was operated as a Tor hidden service, such that online users were able to browse it anonymously and securely without potential traffic monitoring.” Millions of dollars worth of Bitcoin was found and confiscated. The use of it, gave aid to the platform being able to do what it was able to do.
- Though the technology has attracted the minds of incredibly smart engineers, and software developers to work on the open source software to continuously improve upon the technology, it should be noted that currently the amount of transactions that the blockchain is able to process per second still is significantly less than, for example, the 24 000 transactions per second that Visa can process. Which will make scalability a huge problem should there be a surge in mass acceptance. There are solutions being developed the moment, but remains a valid concern as it stands today.
- The instability of the Bitcoin price has many concerned and obviously cannot be used as a currency the way it would be needed to support social interaction until it stabilizes. This instability is something that people have capitalized on through trading with cryptocurrencies, however the road to mass acceptance is still a long one.
- The ability that this technology can do to government function as we know it today has many in the crypto space wondering what will be the response of governments in future. People may not yet see how this technology can invert the roles of power, and how it could bring more control back to the common man and away from the few institutions at the top. This could mean the “cryptocurrencies” that governments are working to bring out could be more widely accepted, even though they will not have the decentralized aspect that makes this technology so crucial. A possible wolf in sheep’s clothing type of agenda.
THE OPPORTUNITY
The huge debate around Bitcoin is essentially around the question “what gives it intrinsic value?” Beyond being a digital currency, what could it offer or bring to the table, that Visa or Paypal hasn’t already. One can easily see the possession of gold as a store of value because there will always be a need for it. Its track record of value boasts for thousands of years and many affectionately know it as “God’s money”. Is there a reason to take a closer look into Bitcoin and/or other cryptocurrencies? The unbanked and the unknown As it stands today, funds that are transferred offshore are subjected to the laws and regulations that decide if that payment can be made. That payment can be stopped. When countries have heavy censorship laws, or are in trade wars due to more political objectives rather than ones that truly protect the citizens, this could massively impact people who want to make an honest living. This doesn’t promote a true and free market, where the greatest ideas are incentivized due to an equal playing field. The nature of Bitcoin means that no matter anyone’s geographic location and its arbitrary rules that govern over them, they can now engage economically with anyone in the world, if they have a phone and internet. There is now no need for a bank account to receive payment from anyone in the world. A press release in April 2018 of the World Bank reported that 1.7 Billion adults across the world remain unbanked. With the ongoing global conversation on how to alleviate poverty, we have to recognize that 1.7 billion people cannot even enter the chat. “Owning Bitcoin for them won’t be because it’s a new fad, but because they need to protect themselves against fiat currencies that are destroyed, and against capital controls.” – Andy Hoffman The power of Blockchain A bitcoin can be divided 100 million times, making the smallest unit of a Bitcoin called a Sitoshi. The fact that a Bitcoin can be programmed, means that a unit of Bitcoin can be used and programmed to be almost anything of value.
- It could be programmed to be a land title deed that can be sent over the Blockchain. In countries with failed infrastructure needed to even just prove someone’s existence, this could mean that people have a chance to own property.
- This principle can be used in other contracts such car leases, rental agreements etc. Once the terms and conditions are met, the transaction is able to be processed through the Blockchain, eliminating the costs involved with having a middleman
- It could be used in a voting system to ensure an accurate, true and anonymous election.
- The value of Blockchain and Blockchain technology is being used by corporations like Microsoft who have patented new technology that programs a Sitoshi to store personal information in order to have secure access to an online persona via an encrypted database hub.
There are many other applications as the possibilities continue to grow as more and more people see the need and advantage of having, essentially, a decentralized database that has never been hacked since its inception. In a digital age that we are in today where information and the protection of it is vital – how can one not see the value? “Bitcoin is not a currency for a government; it is a global currency for the people” – Wences Casares Industry news We are seeing many major corporations investing into Bitcoin as a way to diversify their investment portfolio, moving the industry forward to not just a super niche and concentrated few geeky people. Below are just a few examples:
- Microstrategy, a NASDAQ multi-billion dollar business intelligence firm, in October of 2020 reported to have purchased $250M worth of Bitcoin to be included in their assets portfolio.
- Square Inc has now reported that 1% of their asset portfolio consists of Bitcoin. Square reported said that “cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system, which aligns with the company’s purpose”
- PayPal recently reported that it would soon support Bitcoin and other cryptocurrencies on its payment network
- There are now Bitcoin ATM machines and even debit cards that can be used to purchase anything where ordinary debit cards are used.
“we have elected to put our money and faith in a mathematical framework that is free of politics and human error” – Tyler Winklevoss An opportunity for you It is important to say that we are not here to advocate for a world of lawlessness and anarchy. We are merely presenting a technology that has such a negative connotation, the benefits could be lost and drowned out in the noise. Having a good look at where we currently are, the good the bad and the ugly, positions us to continue to ask the right questions, and perhaps finding the right solutions that could turn the clock from a new dawn to a new day. In an uncertain world, we have to ask if the current systems in place that construct society, that were set up thousands of years ago, are still best suited for a ever evolving global society – especially when the power rest in the hands of a few, and as history shows, they do not always have the best interests in mind for all. Could the lack of understanding, and us having a head in sand approach only driving the problem further? Should we not be probing further today to drive solutions for tomorrow? Are there ways we can get involved and secure our own finances for the sake of our families and our legacies to come? To learn more don’t forget to book your spot at Team Avalanches free event by clicking here https://www.eventbrite.com/e/team-avalanche-investment-opportunity-tickets-130300262593
