Hosts Greg Mooney and Jeff Edwards welcome Adam Bertram into the Defrag This studio talk about cryptocurrency, the Bitcoin bubble, and the blockchain.
In the cryptocurrency world, this is short for, “Hold on for dear life.” This seems to be the philosophy when engaging in popular digital currencies such as Bitcoin.
It is a volatile market, and the underlying message of HODL is that if investors wait long enough, whatever was lost will be made back, and perhaps even doubled.
Sounds a bit like a ponzi scheme right?
Recently on Defrag This we had an interesting conversation with Adam Bertram about cryptocurrency volatility and the blockchain. Let’s see what was discussed.
The Bitcoin Bubble
Adam Bertram refers to this Bitcoin phenomenon as a bubble, and his question is, “When is it going to burst?”
This new anomaly seems to have appeared out of nowhere, and all of the sudden people who shouldn’t be investing are investing their money into this bubble in cryptocurrencies because it’s techy and trendy. Many of these new investors don’t know about foreign exchange currencies, but it’s new cool technology, so why not get involved?
It’s a gamble. One could compare it to playing slot machines.
The cryptocurrency market is inconstant and always changing. An investor could put in 800 dollars, and within a few days it could dwindle down to 400 with no guarantee it will rise again.
Blockchain is a cool idea: centralize banking and transactions in order to get rid of the middle man. It is starting to be watched very closely by banks and the Fed.
Adam points out that as soon as something garners enough attraction, eventually the government will step in and banks will realize that there is a money making opportunity, because it is all about money.
However, the true idea about what blockchain is supposed to be is being ruined due to all of the excitement around cryptocurrency. Due to everything being about money, people don’t care about investing in the actual technology of the blockchain. People are just investing for the sake of it, without knowing what they’re investing in.
This is unfortunate because the blockchain is something worth being interested in and investing in.
Bitcoin Mining and the Environement
What some might not know is that Bitcoin Mining takes up a lot of electricity and is actually really bad for the environment.
Bitcoins are "mined" by computers in extensive data centers that imbibe huge amounts of energy.
A study was recently done revealing how much mining 1 bitcoin on New York’s state consumer electricity would cost, and the cost was 7,000 dollars. Now imagine that on a much larger scale. Say, 21 million bitcoins. That’s a lot of electricity.
While Bitcoin is intriguing, and the world of cryptocurrency may be calling your name, don’t forget how swiftly the market changes.
It is a gamble, and there is no way of telling when the Bitcoin bubble will burst.
If you’re still itching to try it out, start off with a little investment and HODL.
This article is based on an interview with Adam Bertram, IT industry expert and PowerShell Guru.
You can find this interview and many more, by subscribing to Defrag This.