Cryptocurrencies are just the tip of the blockchain iceberg
Bitcoin, Ethereum, Dogecoin, Ripple...these are some of the cryptocurrencies that have been making headlines (again) of late. For some, the FOMO (fear of missing out) has set in, and these investors seem to be chasing returns without understanding what it is they are chasing.
By definition, cryptocurrencies are simply a decentralized improvement to accounting practices on a blockchain. This data is distributed as a ledger that functions essentially as a transactions history, stored redundantly on a series of various decentralized networks called nodes. The entire system is designed to eliminate the need for a trusted third party to broker or facilitate monetary transactions.
Like any new technology, until some form of cryptocurrency becomes truly understood and easily accessible to the masses, we expect the volatility will continue.
As we've seen, cryptocurrencies can be incredibly volatile with their perceived values constantly changing due to internal actions by developers and external forces affecting their accessibility, effectiveness, and security. The general lack of knowledge or understanding coupled with a lack of liquidity or easily accessible framework only exacerbates this volatility. There are literally hundreds of Altcoins, many of which are, right now, worthless and a few of which seem to have gained some traction.
The reality is, like any new technology, until some form of cryptocurrency becomes truly understood and easily accessible to the masses, we expect the volatility will continue. Just think...30 years ago, sending an e-mail required highly specialized training and access to specific applications and equipment that were not easy to come by. Today, this action can be completed with a few swipes on nearly any device in our pockets.
But cryptocurrency is only the tip of the iceberg. The blockchain technology that supports this decentralized system and transforms the way data is shared is so revolutionary and groundbreaking, we truly can't begin to understand its future implications for global commerce and communication.
Blockchain technology transforms the way data is shared. We can't begin to understand its future implications for commerce and communication.
While we can't know which cryptocurrency will retain or grow its value 30+ years from now, we believe its foundation in a brand-new technology infrastructure that reduces the need for third parties to broker or facilitate transactions and communications has the potential to revolutionize various industries around the world. When we say "More than Bitcoin...", we mean rather than focusing on prices and speculation, take the time to learn about the blockchain technology and how it can improve the future.
There are numerous companies investing heavily in the development, expansion, and utilization of blockchain technology in their respective fields and businesses. Like anything else, some of these companies will succeed in their endeavors, some will fail, and some haven't even been created yet.
We believe prudent investors with Bitcoin FOMO should refocus and expand their field of view. Cryptocurrency is just the first application of blockchain technology, but it certainly won't be the last.
Prior to making an investment decision, please consult with your financial advisor about your individual situation. The prominent underlying risk of using bitcoin as a medium of exchange is that it is not authorized or regulated by any central bank. Bitcoin issuers are not registered with the SEC, and the bitcoin marketplace is currently unregulated. Bitcoin and other cryptocurrencies are a very speculative investment and involves a high degree of risk. Investors must have the financial ability, sophistication/experience and willingness to bear the risks of an investment, and a potential total loss of their investment.