Cryptocurrencies have entered the public square in a big way. Just a few years ago it was difficult to find any commercial outlet that would accept a cryptocurrency but that has ended. You can buy nearly anything online with a cryptocurrency. There is even a debate going on as to which is the best bitcoin online casino. When online casinos are running on bitcoin, you know that something momentous is afoot.
There are many cryptocurrencies but for the sake of streamlining we will use the term bitcoin to represent all cryptocurrencies. Bitcoin is an entirely internet-based currency. There is a great deal of confusion as to what bitcoin is, how we can get them, who “prints” them, and how we can buy things with them.
The reason bitcoin and luxury living are so intertwined and getting even more intertwined every day is because most of todays purchasing is often done online, Why? because these individuals have an idea that bitcoin serves a vital financial purpose and can be bought as investment.
Bitcoin requires that we accept an entirely different vocabulary than the one we knew so well. The most difficult new concept is mining.
Bitcoin is mined when the miner solves extremely complicated problems. These problems are also often referred to as puzzles. Bitcoin mining is not like solving a difficult Sudoku. It’s far more involved than that. Computers actively try to put all of the problem pieces in the correct order. When someone does that, a “block” is created.
The creators of bitcoin set a finite limit on the ultimate number of bitcoins there can ever be. The key to understand is that bitcoins will never be as valuable as some think they’ll be unless many millions of people lose complete faith in national government currencies. The great rise in value of bitcoin two years ago was because many people actually came to the same conclusion at the same time.
The demise of national currencies will be as much a political event as it will be a financial event. In 2016, Great Britain voted to leave the European Union. Two years have passed and we see just how difficult it will be for Britain to quit the EU.
In the United States, Hillary Clinton was seen as the obvious victor for the presidency of the US. Whilst she is also seen as a favourite of the money managers, her party is seen as striving mightily to bring socialism to the US. There was a long moment of panic when many people felt that socialism in the US was on the horizon and that it would cause the dollar to collapse.
Donald Trump is now the US president and the great fears about the collapse of the dollar have waned.
Mining bitcoins has become harder and harder because the puzzles have become so much harder. Most people who own bitcoins simply buy them.
Luxury Living and Bitcoin
Remember, we are using bitcoin as a generic name for all cryptocurrencies. It is actually quite easy to set up a cryptocurrency network and some can be more easily mined than others. Nevertheless, we will continue here to use bitcoin as a generic term.
It may not be politically correct but it is still an undeniable fact of life that the people who are best suited to understand the significance of bitcoin are also the people who make high-end purchases. These people understand that the fiat currency world may sooner than we think come crashing down.
People in the upscale market already have substantial sums invested in dollars in such things as property, artwork, and the full gamut of investments available in our market-oriented financial system. These people know the size of national debts. They know that the accumulated national debts are a sum that almost no one has the mental capacity to imagine and to fathom.
Upscale living may soon be seen as to require selling assets for bitcoin. Then the people will use the bitcoin received to buy different or similar assets. A fully developed market in bitcoin will develop. When oil, natural gas, and essential minerals are sold in the open market for bitcoin, it will signal that fiat currencies are finally on their last legs.
Upscale people know full well the importance of liquidity. The whole concept of the diversified portfolio meant to have some investments in non-liquid assets such as homes, art, gems, and the like and other investments in completely liquid assets. When the next great panic hits, the people who have denominated their liquid assets in bitcoin will still be able to trade these assets while people whose liquidity is in dollars may not be able to.
Bitcoins exist only through the internet. Therefore they cannot be stolen. When people lose faith in central banks they will also lose faith in savings banks. Many people will take their money out of banks and “deposit” them in their bitcoin accounts. This does not guarantee that an intrusive government won’t try to steal the bitcoin but it will be seen as a far better “hiding place” for upscale assets than under the mattress, buried in the back yard, or in a bank about to suffer a run on deposits.
Upscale living also involves, ironically perhaps, a strong understanding of delayed gratification. The upscale buyer may well postpone some purchases that attest to an upscale lifestyle but may not be necessities. This could actually devastate the upscale market for any number of goods. When that happens, if it ever does, we will know that our government’s currency is failing and bitcoin, meaning the full gamut of alternative currencies known as cryptocurrencies, is prevailing.