For some time, Bitcoin has been making waves in the market, and digital currencies are changing the way we think about money. Peter Diamandis, founder of X Prize, notes that crypto currencies are making money “more digitized, dematerialized, and democratized than ever before.”
Bitcoin also creates a path straight to consumers, without involving the bank as a middleman. And why not? Wall Street, banks, and the Federal Reserve have had significant control for a long time. This might just be changing that.
So what is Bitcoin, and how is it disrupting the market?
Tech that Disrupts
Disruptive technologies are those that fundamentally change the way we, as a society, operate. More specifically, disruptive tech changes businesses, consumers, and entire industries. This type of innovation often renders the systems it replaces obsolete. Or, it forces them to change in major ways.
Ridesharing has transformed the taxi and public transportation system. Music streaming has turned CDs, cassette tapes, and records into collector’s items and hobbies. Smart phones have revolutionized a variety of industries, from GPS to self employment.
Although much of the currency we use can technically be considered digital—through credit or debit cards and touchless pay options—Bitcoin is a different ballpark. That’s because it’s decentralized (AKA, not connected to the banking system). Robert Kiyosaki, author of Rich Dad, Poor Dad, calls Bitcoin “the people’s money,” while our regular currency is “the government’s money.”
These digital coins are more popular than ever, and are becoming increasingly accessible to the public. More stores are accepting Bitcoin as payment, and there are more ways to get your hands on it. For better or worse, crypto currencies don’t come from a government.
As people place less faith in institutions, the decentralized aspect of Bitcoin is becoming increasingly attractive. Even wealth managers and investors are recommending that the public begin diversifying their portfolio with Bitcoin—as much as 1-5%.
What is Bitcoin?
Bitcoin is a digital currency, based in code, with only a finite amount in existence. A single Bitcoin is currently valued at over $48,000 at the time of writing—up by over $16,000 from January. Yet, it can be broken down fractionally, for both buying and selling.
Bitcoin eliminates the need for banks, credit cards, ATMs… and all the fees that are typically associated with accessing your money.
Bitcoin, and other digital currencies can be used globally, with millions and millions of users worldwide. There are billions of dollars circulating in Bitcoin, as people have gained more trust in the currency, and access has become easier. You can even buy it from PayPal now.
To return to Peter Diamandis’ words, Bitcoin is dematerializing, demonetizing, and democratizing. It is demonetizing because it is reducing the demand for bills, coins, and cards—and all the institutions that support those things. Banks, lawyers, and currency exchanges are unnecessary to access your crypto currency. This means that you no longer have to pay fees for these middlemen—transaction fees, exchange fees, processing fees, etc. And ultimately, Bitcoin is accessible globally to anyone with an internet connection.
Bitcoin has passed it’s experimental phase, where programmers were creating it, and hackers were attempting to breach it. It became increasingly popular, and controversial, yet now it’s become a major player in the global economy. Even banks are scrambling to make their own crypto—like the JPM (JP Morgan) Coin.
Where Do We Go From Here?
It’s important to recognize that Bitcoin is no longer an asset on the sidelines–it’s a major player in the financial world. It’s been ranked as the best-performing asset class over the last 11 years, and institutions are jumping on the train.
If you’re interested, you’ll learn by experimenting. Get a Bitcoin wallet and buy some Bitcoin! Two of the most popular platforms to buy Bitcoin are Coinbase and Cash App. If you’re an entrepreneur or business owner who is looking to start taking payments in Bitcoin, look into the platform BitPay.
And you may be interested to know, even some life insurance companies are jumping on the Bitcoin train! Life insurance is boring…however it is stable and reliable, making it a great financial foundation. And while whole life insurance is insurance, it also has a savings component that earns dividends. And one forward-thinking company, MassMutual, recently purchased $100 million of Bitcoin just a few months ago.
If you’re interested in seeing how Bitcoin (or whole life insurance) might fit into your financial strategy, the Prosperity Economics Movement can connect you with a like-minded advisor in our nationwide network. Contact us to be put in touch with an independent Prosperity Economics Advisor.