The People's Money: No It Isn't Bitcoin

about 3 years ago

Elon Musk made news, as he usually does, with his announcement that Tesla bought $1.5 billion worth of Bitcoin. This is now part of Tesla's balance sheet. By opting to put part of its reserve capital in BTC, the company stands to see a significant increase in the value of it over the next few years.

Microstrategy already realized this as did a few other companies that bought in months ago.

The difference with Tesla is this opens up the door for other non Wall Street companies to enter. Thus far, the primary buyer of Bitcoin among institutions are Wall Street funds and other financial institutions.

There are lot of theories out there as to why companies are so interested in Bitcoin. The reality is that Bitcoin is a way for them to balance out their reserve capital while getting a, presumably, fine return over time. The fact that Bitcoin is expected to keep ascending tells us all we need to know.

A problem is arising. Bitcoin was designed, originally, to be electronic peer-to-peer money. This is not turning out this way. These corporations are not looking for another way to transfer value. Instead, they are looking at it like any other asset class: a way to profit.

It all takes on added meaning when we see the holdings.

Here is the image enlarged.

Make no mistake about it, the percentage of Bitcoin held by corporations is going to increase greatly. We will not see the percentage hold at 6%. Thus, Satoshi's dream of people's money is starting to reside on Wall Street balance sheets.

Obviously, the entry of institutions has done wonders for the price of Bitcoin. Nevertheless, the original concept is dead. Each day, Bitcoin is taking on the role similar to gold. It is a store of value and something that is viewed to increase over time.

So where does this leave the rest of humanity? After all, we know that institutions holding the majority of the wealth does not work out well for the rest of us.

The offspring of Bitcoin is where the answer lies. The fact that cryptocurrency, not only Bitcoin, is exploding means that we are seeing wonderful opportunities for people. This is something that we need to ensure people realize. While Bitcoin is a great way to establish a foundation in cryptocurrency, it is not where the real action is.

When it comes to developing the tools and applications that people are going to be using in the future, that is happening outside of Bitcoin. We see many projects that are starting to being the ability to handle larger numbers of people. This is the entry point for the masses.

Bitcoin is an asset that, for the most part, must be purchased. This means having some capital to start with. Unfortunately, this eliminates billions of people on the planet. They have no extra money to invest. Thus, Bitcoin is already an exclusive club.

That said, we are seeing a different story forming outside the Bitcoin space. Many projects, like those on Hive, enable people to get rewarded in cryptocurrency. This forms a foundation whereby people can start to accumulate a bit of wealth.

Once that process starts, we know returns in the crypto space can be outsized. Not only do people get rewarded for doing things such as staking coins but there is also the fact that new projects can be airdropped to people. This can really enhance the value of one's holdings.

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Of course, when it comes to money, one of the key components is being able to spend it. So far, the crypto industry has failed on this end. It is a grand opportunity to combat the likes of Amazon and Alibaba. Those companies are online retailing giants. However, they do not cater to the crypto crowd.

We could see a reformation of the early days with the Internet where commerce was not dominated by a few major players. Instead, millions of people could open up shops selling their wares and services, taking crypto as the payment. This would add value to the existing systems since there would be a lot more "sinks" for different currencies.

This also would help people get around different regulations that might be hindering them. If, for example, one could get rewarded in crypto and buy some canned food with it, that would enable a transaction that didn't need to involve the banking system. This was the ultimate vision of Satoshi.

The people's money does exist, except it is not Bitcoin. The fact that it is limited in supply enabled it to be hijacked by Wall Street and corporate interests. That is fine. There is nothing wrong with a vision changing over time as more is revealed.

In reality, the only thing that is different is the shift that took place. While there is no longer one token for the people, there are now thousands. With each passing day, more are created, thus providing expanded ways for people to transfer value.

Cryptocurrency is ushering in the Age of Abundance. There is now near $1.4 trillion in cryptocurrency out there. Bitcoin makes up a large portion of this, coming in at $850 billion. However, that still leaves more than 1/2 a billion outside that, leaving aside the fact that most Bitcoin is still held by individuals.

Over time, we will likely see all of this grow. There are hundreds, if not thousands, of viable projects that are flying under the radar yet will have an impact in a significant number of people's lives.

The advantage is that, in the digital realm, value is generated simply through the network effect. Thus, Wall Street and corporate money is not the only driver. We could see more value created simply through the actions of billions of people.

It is in this regard that we can dwarf Wall Street and establish an abundant value for our money.

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