How do you see BITCOIN - AN INVESTMENT OR WEALTH PROTECTION AGAINST INFLATION?
INTRODUCTION
A few days ago, I had the pleasure to have a Skype call with a good friend of mine. A business owner from Switzerland, who has been involved in the cryptocurrency space for quite sometime. He mentioned his recent interesting conversations with some of his own business partners. They talked about cryptocurrencies and BITCOIN in particular.
His goal was to encourage those people to look closer into bitcoin and treat it as an asset class worth investing in. However, he seemed to fail and wasn't able to get much of their interest. Which made me wonder, what was his mistake?
I've asked him then, how did he approach this topic. I wanted to know how he explained the benefits and risks of moving some of our savings (in FIAT currency) into crypto. After all, building the right mindset is necessary to be able to build our listeners' interests and trust.
And one can have a very different mindset when it comes to bitcoin and cryptospace. This I know for sure.
Today, I would like to discuss this topic and I'm very curious about the replies I hope to receive.
STORE OF VALUE vs GLOBAL CURRENCY?
Many people out there still seem to consider crypto as a new digital currency. Often dreaming about BTC being used as the world reserve currency.
Personally, I do not look at BTC as a currency and I probably never will. Mostly because the majority of BTC holders seem to treat it as a store of value. We buy BTC either to speculate and trade, to exchange for other cryptos, or simply to hold long term. Not many people out there seem to use BTC (or other cryptos) to pay for goods and services. We simply do not want to spend any of our bitcoin.
Also if we would like BTC to become a currency, then very different (and super strict) laws and regulations would have to be introduced and applied. And that could cripple the entire industry, which is still quite at an early stage of development. Therefore, in my opinion it's best to present BTC as a store of value. One, which in so many aspects are better than gold.
Once we have this part out of the way, then let's move to my main question:
- would you promote Bitcoin as an investment or wealth protection against inflation?
AN INVESTMENT OR WEALTH PROTECTION AGAINST INFLATION?
I've learned that people react very differently if we would talk about investing (most are losing their interest) or focus on a different aspect and change their approach. Instead of talking about investing their money into some assets, it seems to be more efficient to talk about "protecting their hard earned money".
The idea of investing scares many, however talking about protecting our wealth attracts more attention. That's at least my impression so far. Would you agree?
I've realized that more often than not, this is the key if we want to hold our listeners' interest and attention. And I wonder, how many of you had a similar impression and similar experiences?
What is your approach towards bitcoin? Do you see it as an investment or hedge against potential high inflation? If you were to talk to a friend of yours with the purpose of getting him/her interested in the cryptospace - how would you play it out? Which path would you choose?
Please, share your views and experience with me. I read all comments.
Yours, @crypto.piotr
@project.hope founder
Our PH community: https://steemit.com/trending/hive-175254
As much as we are advocating for crypto adoption, it is worthy to note that cryptos are very volatile and as such may not be predictable. That not withstanding, I think many people are interested in transacting and trading with btc than using it as a long term store of value. In my own opinion, having btc as world reserve currency may come with laws that may not be welcomed within the crypto space.
well, that's my opinion.
Nice piece buddy
Hi @crypto.piotr
Will tell you what I think, I particularly think that somehow it works like a two-sided coin on the one hand it is an investment and on the other hand it is a protection of an investment.
Each country has its own economic reality and when a country is from the third world like the country where I live, we should see BTC as an investment but also as a protection of my own wealth which is not much, but to the extent of my possibilities I do my best to place or exchange my FIAT money for BTC.
So I simply see it from a double lens, it is an investment and also an economic support.
Appreciate your comment @lanzjoseg
Thanks for dropping by and sharing your thoughts with me :)
And indeed. It does works like a two-sided sword. I just wonder which side do you prefer :)
Have a great weekend,
Piotr
There is this theory of the good money. People tend to spend the bad money and keep the good money. When I look at myself, my btc have been sitting in my wallet with hardly any movement. Why? Because I believe that BTC will keep it's value. So yes I consider it as a store of value in the first place.
What do you do with a coin that seems to have no value, first thing you will try to get rid of it and swap it into something useful. It's the useful stuff that will become the currencies of the future. Things that are relatively stable in price, easy and cheap to use. I would but btc into this package at all.
BTC can be a store of value but it is not designed to be something to pay stuff with (scalability, transaction costs). If I had to promote BTC to people I would do it as a secure store of value in the first place.
I too believe to store BTC as store of value and really like the use of the synonym "Good Money" for BTC perhaps I am going to borrow this phrase and use it a lot
No problem, I haven't invented the term ;-)
Thanks for dropping by and taking the time to sharing your thoughts with me @achim03
I truly appreciate it.
Have a great weekend,
Yours, Piotr
Dear @crypto.piotr
A very interesting question about a topic that is very close to my heart #Bitcoin infact it is so life changing and for a lot of people our lives revolve around it.
i think it can be used both ways. Right now though the vast majority of people are using it as a store of value if you ask me, that's why they call it the digital gold!
Hello @crypto.piotr Very interesting approach on a topic that I think has very personal points of view.
For me, this depends on countries with very fragile economies or that suffer from hyperinflation (such as Venezuela), It is often seen as an "investment".Personally for me it is, and I think very specific laws are needed to improve it.
First I would try to focus my speech on the area of attention to which my friend dedicates himself, for example if you are a "gamer" I would tell you about the benefits of the blockchain and all the possibilities of being able to generate an income playing his favorite game (or one developed by him), and the virtually endless possibilities of acquiring various currencies.Then I would talk about the security it provides and the way it generates trust through transactions, and how useful and fast it is.I would also show you and talk about my experience on steemit and other platforms,telling you how they have allowed me to be a source of income in the last 5 years.I think this would motivate him and make him decide to have the new purpose of investing in this, and also how this idea would help him pursue a promising future.
Thanks for this valuable feedback @reinaldoverdu
Very wise suggestion.
Enjoy your weekend,
Cheers, Piotr
I don't think right now people want to buy and sell with Bitcoin. But I see the future to be cable of making that change even though I don't know how. The prices of Bitcoin fluctuates too much for it to be traded off for a commodity that is fixed.
People have plans of holding Bitcoin for their children and for future generations to come. I was talking to my brother a few weeks back about a company that has bitcoin bought with the intentions of holding it for 500 years. Imagine that.
Thanks for dropping by and sharing your thoughts with me @ebingo
I also don't know how :P It could only happen if people would consider spending their bitcoin to be better option than hodling it. Wouldn't you agree on that?
Have a great weekend,
Piotr
Hello @crypto.piotr, I really liked the intention of seeing it as a reserve of value, which may well exceed "gold".
However, introducing the concept of crypto assets in certain social environments is still difficult because the desires prevail in society to "simply" have a high value currency at hand and this is not the fundamental premise of the crypto world.
This is the impression that I have received when I deal with the subject with a certain audience. One thing is what it really means to have reserves in cryptoassets and another thing is what "people" understand in their own way.
I think that in the near future, this topic should be taken as a subject at universities in economics career.
See you soon..!
Thanks for dropping by and sharing your thoughts with me @tocho2
Appreciate it.
Piotr
If I was talking to my friend Bob who knows nothing about crypto, global fiscal or monetary policy, or the technicals of wealth building. I would say this if asked:
Bob: What's Bitcoin?
Me: Internet money, like digital gold, you can trade it, send it and exchange it for dollars.
Bob: Do you have some?
Me: Yeah, I thought what the hell, put $100 in several years ago, and watched it go up, made some good money, what do I have to lose except for $100, ya know?
Bob: That's a good point.
Me: I can send you some Bitcoin if you want, so you can see how it works, then we can go out for Mexican food.
Bob: Sure why not.
Sustainable crypto adoption goes in stages. And it also depends on who you're talking to, how sophisticated they are, their background, etc… If they have a background in computer science and finance, crypto is an easy sell most of the time. If the person is in marketing and spends the rest of their time playing with their kids, crypto is much more difficult to convey.
I'm making this up on the fly, but we'll say explaining crypto goes in five stages. The first stage (introduction), the Bob example; it's an investment, digital gold that you can trade, throw $100 into it, see what happens, explain how it works later.
2nd stage would be explaining how money (the history and function of it) works.
3rd stage would be explaining how the computer science of Bitcoin works.
4th stage would be how do you combine the two.
And 5th stage would be how it's better than the current system.
I think the trick to convincing someone of BTC's usefulness and investment properties is not to get ahead of oneself. Meaning, don't start out with "Bitcoin's immutable blockchain, decentralization and digital signatures offer a compelling alternative to our current fiat monetary system." Instead talk about it casually (above example), as if its normal and no big deal.
If anybody else has anything to add, I'm all ears, because I'm making this up as I go.
Appreciate your amazing (and lengthy) comment @fijimermaid
Thanks for dropping by and taking the time to sharing your thoughts with me.
I would like to have this conversation with you. Free satoshis, good company and mexican food? Paradise! :D
Have a great weekend,
Yours, Piotr
Hi Piotr
Quite interesting questions you leave at the end of the post. When I have talked to friends about cryptocurrencies, about Bitcoin, I always try to tell them when and why it was created, and its evolution over time. I never fail to tell them that it is a very volatile asset, and that is one of its main characteristics.
But it has a deflationary component that is one of its characteristics and that can certainly make the price catapult, unlike the common inflationary process of the Fiat currency, in addition to the devaluation.
But I always argue that it can be used as a store of value and protection against an inflationary process, but I also talk about market speculation based on cryptos.
Thanks for dropping by and sharing your thoughts with me @josevas217