Question No. 4:
Are Cryptocurrencies Real?
by Ian King
This is another great question.
I think the answer relies on this question: What does it mean to be real? In my opinion, things are real when they are authentic — when you know the object you’re holding is not a counterfeit or replication.
So in the digital world, how do we know what’s original?
For example, anyone can easily copy a photo or a song.
About 20 years ago, the record industry had revenues around $38 billion. And even though there are more people listening to music than ever before, revenues have been continuously declining until recently.
In this case, something digital — digital music — made scarcity value obsolete. You can download music for free or you can easily copy digital files and share them with friends. This is a huge problem and probably why most music is so terrible nowadays — the money just isn’t there for musicians anymore!
This is the transformational problem that blockchain and cryptos solve.
Cryptos Provide Authenticity
For the first time in human history, we can create a unique piece of digital property! It’s something that can be bought, sold, transferred, stored and even stolen! But it cannot be replicated.
Let me use another example of why this is important…
When I was a kid, I was an avid baseball card collector. My most valuable card was a 1989 Ken Griffey Jr. rookie card, made by a brand called Upper Deck. At one point, this card was worth over $400, which was a considerable amount of money to a 13 year old.
Ken Griffey Jr. was a great player but what really gave this particular card so much value was that the baseball card company only printed a limited amount. They were difficult to find, and because they were scarce, collectors were willing to fork over $400 to own one.
Everyone knew there was only a limited amount — and, therefore, the cards had value. If Upper Deck decided to print a lot of them, the cards wouldn’t be worth $400 anymore.
Now, in today’s world, kids collect digital baseball cards. But the problem with everything digital (like digital music) is that it can be easily replicated.
There’s no actual value.
Herein lies the problem with modern day central banking as well. If the government decides to print too much of the currency, its purchasing power (things you can buy with that currency) is going to drop. No currency has an inscription that says: “We will only print so much.”
In fact, it’s just the opposite.
A dollar buys about 34% of what it did in 1980, and only 16% of what it did in 1970. There is no scarcity value.
Likewise, if you pull out your phone, take a photo of your dog, and text that to your friend, you both now have a photo of your dog. Any digital photo can be easily replicated with a smartphone. Again, no real value … well, beyond sentiment.
So I can’t stress enough how important cryptos are. The transformational breakthrough of cryptocurrencies is that you can create something digital and ensure that there’s only one copy of it. This is huge.
That’s why cryptos are real. They can’t be replicated. And that means they have enormous value.
After all, that’s part of why bitcoin jumped about 80,000% in just five years. Only 21 million of it are in existence. It has scarcity value.
And that’s something I consider whenever making any trades with my Crypto Profit Strategy. Because where there is scarcity, there is real value …. and real gains.
To learn more, be sure to visit www.cryptoprofitsummit.com daily to see pre-webinar previews and posts.
Creator, Crypto Profit Strategy