Saturday, July 8, 2017
Rethinking Crypto Currencies
In the past I wasn't much of a fan of crypto currencies like Bitcoin. They just didn't seem real to me. Actually, they still seem a bit sketchy to me. They don't appear to be a good investment. Sure, they've risen in value quite a bit over the years, but their volatility concerns me.
While they are nominally independent of government control, governments have indirect influence over them. The easiest thing for governments to do is to make them illegal. Then it would be pretty difficult to convert them into the coin of the realm. While you would still own them, you could not use them on the open market.
Then you have the weird situation where some governments have significant numbers of Bitcoins. China has some influence that way. In the United States the FBI acquired a large number of them from arrested drug dealers. They have enough to influence the markets if they wanted to.
In spite of those issues, there are times when it might be a good idea to have some Bitcoins. The main one, in my opinion, is the fact that they exist electronically. There is nothing for an inquisitive border guard to confiscate. Someone could leave their country with little physical money, yet have enough in a crypto currency account to start a new life in a new country. That's no small thing when you life is on the line.
In some places crypto currencies are very popular. Australia is concerned by the number of their citizens that are heavily invested in them. There are warnings that Australia is on the verge of a financial meltdown. Those in the know have taken precautions and parked some of their money where governments can't easily reach it.
As for myself, I'm not in the market. My “investments” are more along the lines of buying a twenty pound bag of rice.