We’re used to buying things either on credit card or with cash. So, trying to persuade everyone to switch to anything else is a huge and nearly impossible challenge. But what about cryptocurrency, is that a viable payment solution?
As expected the rollout for payments with cryptocurrency has been extremely sluggish. Possibly it’s still too technical for a lot of people, or maybe the payment infrastructure just isn’t there yet. Either way, no one wants to be the only person at a dinner party asking to pay with bitcoin.
But cryptocurrency isn’t used just for payments. A lot of people are looking at ways to profit from the technology. Especially since the corona outbreak, the amount of people involved in purchasing, trading and HODLing cryptocurrency has increased exponentially.
But is investing in this new technology a good idea? A lot of people look to the super-rich to see what they think. Have they adapted to it, or are they running for the hills?
What Exactly is Cryptocurrency?
Cryptocurrency is a form of digital and decentralized currency that may be used to purchase and sell items, or as a store-of-value currency that has been likened to Gold.
All cryptocurrency transactions are stored on a decentralized ledger (called a blockchain). Every time someone buys or sells cryptocurrency, the transaction is recorded. The blockchain is a public database of all transactions that is accessible to other cryptocurrency holders.
Today, there are tens of thousands of different cryptocurrencies to choose from each with their own purpose. Bitcoin is the biggest name, which was launched in 2009 as a peer-to-peer cash system.
Other popular coins include Ethereum, XRP, and Bitcoin Cash. Some of these have been designed as a substitute for cash and others for private, direct transactions.
What is Blockchain?
A blockchain is a public digital log of transactions that is impossible to hack or modify. It’s a system that doesn’t require an intermediary like a government, bank, or other third-party.
Each transaction is independently validated, time-stamped, and contributed to a growing chain of data via peer-to-peer computer networks. The info can’t be changed after it’s been recorded. Each transaction is validated using one of two major validation approaches to avoid fraud: proof of labor or proof of stake.
There are so many potential uses for the blockchain network, outside cryptocurrency, such as legal contracts, property sales, medical records, and any other business that requires the authorization and recording of a sequence of activities or transactions.
Why are Cryptocurrencies so Popular?
Enthusiasts are drawn to cryptocurrency for its many benefits, including:
- bitcoin is believed to be the “money of the future”, so why not jump aboard early
- central banks have no control over cryptocurrency, so it won’t go through the traditional devaluation over time
- an appreciation for the blockchain technology underlying cryptocurrencies. The blockchain itself has been shows to potentially transform many big industries
- that the decentralized processing and recording system and can be more secure than traditional payment methods
- speculation that the value will increase based on supply and demand. No regard for long-term acceptability.
Despite the widespread enthusiasm for cryptocurrencies and blockchain technology’s potential to transform the world as we know it, several of the world’s wealthiest have voiced conflicting feelings. Let’s see what 5 billionaires think about cryptocurrency…
5 Billionaires Thoughts on Cryptocurrency
1. Elon Musk
Elon Musk always seems to be tweeting about cryptocurrencies to his 57 million followers. His tweets are fairly inconsistent, with some being serious about cryptocurrency, and others being more of a joke.
For instance, in early 2021 the price of Bitcoin surged after Musk showed bullish signs towards the cryptocurrency. He announced that Tesla had purchased $1.5 billion worth of cryptocurrency, and that they would soon accept Bitcoin payments for their cars.
However, only a few months later, he decided to stop accepting Bitcoin (due to its environmental impact) and the price crashed.
Musk has also tweeted multiple times about Dogecoin, which was initially created as a joke. On many occasions the Tesla CEO has called himself the “Dogefather” and has even appeared on Saturday Night Live to make fun of the coin. There were even times that he had tweeted a picture of a Shiba Inu dog and the coin skyrocketed.
However, behind all of the tweeting, Musk has openly said that he is neither “here nor there” on Bitcoin. He believes that the cryptocurrency can work as a bridge between illegal and legal transactions. He also believes that cryptocurrency is a replacement for cash, but does not see cryptocurrency being the primary method for the transaction.
2. Richard Branson
Billionaire entrepreneur Richard Branson is arguably the most enthusiastic supporter of bitcoin and blockchain technology. Branson has even gone so far as to call blockchain an economic revolution.
Branson particularly suggested a potential use of utilizing the blockchain to build a better land titling system at last year’s Virgin Disruptors event in London. He stated that land titles are routinely faked or seized from legal property owners in poor nations, and that a blockchain-based solution may eliminate this issue once and for all.
For the last two years, Branson has hosted an annual “Blockchain Summit” on his own island, which has generated numerous new ideas and collaborations. He is highly active and interested in the field of cryptocurrency.
Branson believes that cryptocurrency is functioning, but acknowledges the currency’s volatility and predicted the emergence of other similar currencies that might be better than existing ones.
3. Warren Buffet
Warren Buffett, arguably the world’s most recognized investor, has always criticized bitcoin as an investment.
He has suggested that it is a huge speculative bubble, no different from the tulip mania from the 17th Century. Like all bubbles, prices are driven higher by greed and fear of missing out.
One of the main concerns that Buffett has with cryptocurrency, is that there is no value supporting the currency. What do you get when you purchase a coin?
In a previous CNBC interview, Buffet was quoted saying:
“Cryptocurrencies basically have no value and they don’t produce anything, In terms of value: zero.”
Many IT industry heavyweights, like Marc Andreessen, were quick to reject Buffett’s remarks, arguing bitcoin was another new technology Buffett didn’t comprehend. Andreessen may have a point: Buffett has a reputation for avoiding new technology investments throughout his career, claiming that he doesn’t understand them well enough to invest.
To be fair, Buffett’s remarks were made more than three years ago, and blockchain technology has become considerably more useful since then.
As a result, it’s quite plausible to believe that Buffett’s position on blockchain technology has shifted. Nonetheless, don’t expect Buffett to acquire bitcoin with Berkshire Hathaway funds anytime soon.
4. Mike Novogratz
Mike Novogratz, the CEO and creator of cryptocurrency merchant bank Galaxy Digital Holdings and a former manager at Fortress Investment Group. He is the guy that accurately forecasted that Bitcoin will reach $10,000 by the end of 2017.
The unexpected crypto hero, also known as Novo, has stated that “Bitcoin is going to be digital gold. That means it’s the only one of the coins out there that gets to be a legal pyramid scheme”
To put his money where his mouth is, Novogratz is said to have put roughly 30% of his fortune into cryptocurrencies. Despite suffering a $136 million loss on Bitcoin’s record drop in 2018, Novogratz remained unfazed.
Despite Bitcoin’s price volatility, the billionaire recently stated that he is much more optimistic about BTC. He addressed how the epidemic has hastened the “cryptocurrency revolution” in a recent interview.
5. The Winklevoss Twins
The Winklevoss twins are a pair of identical twins who live in New York City. They became popular when they sued Facebook early on for stealing the idea for a social network.
Tyler and Cameron are believed to be the first Bitcoin millionaires. In 2013 the twins reportedly had closed to $11 million worth of bitcoin, which would now have an estimated worth of 1.4 billion a piece, according to Forbes.
Tyler projected that bitcoin’s value will grow 30-fold in a recent Real Vision interview. They stated that people will eventually leave current financial systems and will use their own cryptocurrency exchange, Gemini, to drive the shift.
As can be seen from above, many of the great billionaires have conflicting throughs about cryptocurrency. The ones that have got rich by it, believe that it will only get better. The ones that have made money in more traditional ways, believe that cryptocurrency is a fad, and will be worthless at some stage in the future.
Do you have an opinion? Where do you think cryptocurrency will be in the next 10 years?
About the Author:
Matt | thewahman
Matt is a stay at home dad and business owner who has been able to create his dream life while working at home. With a masters in business, Matt lives in Sweden and is interested in helping others find additional ways to save money. He writes about finding new income streams, and increasing passive income on his blog thewahman.