Keith's Interweb: soon

Having survived the China bubble (Oct-Dec 2013) crypcurrencies have re-stabilized and are, I believe, on the verge of rocketing to new highs.

Bitcoin is holding strong at a value over 5 times above what it was in September. Over the past 3 weeks it's mostly stayed between $800 and $900, and trade volume in US dollars is running at about 4x the level it was in September and October. The higher value and the higher trading volume are clear signs of growth and of a big advancement in acceptance.

But the clearest signal has been in the news stories about bitcoin and altcoins and about the rapid appearance of new cryptocurrency services. The sampling below comes from just 6 days, Jan 10th to Jan 15th:

The bottom story of the above list - Overstock.com Becomes First Major Retailer to Accept Bitcoins - is huge. Overstock is the 3rd largest retailer on the Internet.

On Jan 10th I went to the overstock website, picked out a pair of reading glasses I wanted, put them in my shopping cart and went to the checkout. There I had the pleasant experience of ignoring the credit card and Paypal payment options and selecting bitcoin payment. I followed their one step instruction and transferred the proffered bitcoin amount from my wallet to theirs. No credit card numbers, no billing address, nothing else to enter but the ship-to. Instantaneously I got an email from Overstock telling me payment was received and that my shipment was underway.

Now you might ask who won and who lost in this transaction. Well overstock won, because they avoided a 2-3% credit card charge, and in its place paid Coinbase .5% to 1% for the service of converting the received bitcoins to US $ at the time of the transaction. You could say that I lost a bit because I had to pay a 1% fee when I originally bought my bitcoins. The credit card company clearly lost the amount of their 2-3% fee. With that, for me this a net win - less money to those robber bankers and their credit cards!.

In the long run the .5% to 1% bitcoin/$ conversion fees will drop. And so there will be more net gain with the elimination of the banker middleman. And this gain will come to me in the form of lower product prices. Further, with the way things are currently going (consider bitcoin paychecks, newsstory #8 above), the need for bitcoin/$ conversions may largely disappear.

The changes are coming on fast and strong. My prediction is that we'll see at least doubling in bitcoin value in the next 4 months, and a likely 8 times increase in value over the next 12 months. I expect several of other altcoins like litecoin and dogecoin will see the same increases in value.

I visited a couple of new cryptowebsites over the weekend and tried out their services. On Cryptostocks I bought 4 shares of a cryptocurrency service venture for .088BTC, and then two days later sold the 4 shares for .12BTC. All very quick and easy. On Coinedup's website I bought 350,000 dogecoin with .1BTC. After holding them for a couple of days I sold and ended with a balance of .122BTC. No fees, no complex legal regulations, no middlemen. Individuals are running these ventures on mostly just geek smarts and good faith - refreshing.

Cryptocurrency is catalyzing the revolution of our money and our financial institutions (go here for more). I think we're right now at the bend in the hockeystick. Just as 2008 was the year of the financial crisis, I expect 2014 will be the year of the cryptocurrency.

Keith's Interweb

Wednesday, January 15, 2014

soon

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