Mining as a Service (MaaS) continues
to Explode as Digital Currency Climbs the Wall of Worry
I am still amazed that the average consumer doesn’t know what digital currency is, and why it is important. In fact, he struggles with the concept of fiat currency in general. One thing is clear: my grandson will never have a leather wallet with $100 bills in it, and I will not be able to give him a double saw buck to head to the ice cream store. I will transfer some money to the ice cream store, or to his little digital wallet. By 2027 I’ll be audio pinging him with my Google Glasses and send him an Ethereum Coin from my Wallet, which by that time may be worth $1000…or much, much more.
Most consumers get lost once they lose the paper money default. Frankly I couldn’t care if I ever held another sawbuck. Those germ laden pieces of paper currency serve little purpose even today. No one has cash, and with tipping apps or some other auto tip at Starbucks swipe or Square checkout – no one would ever cash tip again. The day of the hundred in the hand to get a table at Joe’s Stone Crab is gone. It has been replaced by an auto % pull, and I think the service industry is in big trouble. It is the equivalent of decimalization on Wall Street – it is the beginning of the contraction of tips. But the story is about how digital currency will be the unit of measure in future years. Fiat currency is dead.
I need to switch gears. I started trading Technology Stocks in 1994 for a Hedge Fund, and for 2 years no one knew what I was talking about. They looked at me like I was speaking gibberish about broadband and why the ethernet cable was glass instead of a 2-way copper wire. It was an easy explanation as I held up a cord, took a scissor and showed the prism effect of the fiber optic glass that enabled 72 one way signals to travel through the glass cable. Ethernet would satisfy speeds we would need, and that sound AOL was making trying to connect was about to change. The way we connected at home and via our cell would change forever and for always. They told me I was smoking dope, but that is another article on Cannabis altogether.
Here is the issue. Unless you are long Bitcoin or another Digital Currency like Ethereum from lower prices you will get shaken out when the first crack comes in the pavement – and it will come – and it will go. It has done this once already. But the best way to participate in Digital Currency is through mining it – yes, mining it. The reason is because no matter what happens to the price, and more importantly the price volatility (which shakes out novice traders in technology stocks, commodities and every other tradeable entity), these mining servers (boxes) are going to mine 24 hours a day no matter if the price is $50 (Ethereum) or $500. The box will mine more coins at the lower price, and fewer coins as the price rises. It automatically dollar cost averages, and you can build boxes that mine multiple digital currencies and chooses the best one to mine at that time through a sophisticated algorithm.
It is the hidden secret behind the countdown to zero that mining has, and it is totally counter intuitive. You would think if the price rises miners would flock to the virtual fields like a Gold Miner when prices went from $600 to $1800, but it does not make sense in digital currency to keep mining Bitcoin at $2900 per coin because it takes too long to mine the coin. But in a Digital Currency like Ethereum ($350), if the price drops to $150 it will mine coins faster, and at $500 it will mine coins more slowly, with the end result being the same amount of money in your digital pocket.
The range in price Ethereum will deliver over the next 2 years will have enormous volatility, and this is good for the miner. If the price goes up, those coins you have already mined keep expanding in value. If they go to $900, your mining will slow, but you’re already long, and, trust me, you won’t care. At that point, you will have made your money already and will be playing with digital house money. Your next decision will be on what other mineable digital currencies you want to turn your box loose, each time (essentially) speculating in this new digital currency arbitrage. You and only you will decide which of these 800 currencies you want to mine.
When you buy a specialized box with this kind of dexterity (one which can mine several digital currencies) you can flip the switch with your digital mining pool partner, and direct them to start mining the digital equivalent of soybeans instead of corn, silver or gold…
Not since 1994 has the public been less informed than it is today. The window here seems wide for digital currency (there are 800 different digital currencies), but know that history shows that volatile price swings are ahead for digital currency. There will be no escaping it. The market always tells us when we are in overbought territory, and in 1998 Technology stocks were purchased using credit cards by taxi drivers as Alan Greenspan made his gripping statements about the impending collapse of the Technology sector stocks. They did sell off, and made a full recovery, during this period (1999-2001) Amazon fell from $118 to $8.50 which was catastrophic at the time, and killed investors belief in online retail. It forced Jeff Bezos to invest all of his personal money in Amazon and take on unwanted partners at lower prices, and last week Amazon traded $1000 per share. Investing well will always require standing strong in your belief about a stock and a sector. You needed to believe in online retail and Jeff Bezos in 2001, and if you did you made generational money.
Today the digital currency miner runs swiftly under the netting, not caring about rising petards or falling prices. They stick to their knitting and check the digital wallet so they can give their grandsons a leather wallet full of stacked cheese. This is not 2027, 1994 or 2000. It is 2017 and I have on my mining helmet with a big light on the front. It is the time to understand digital currency and learn more as the price of Bitcoin, Ethereum are sure to be tested and are in for some wild volatility.
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