Seven years ago, I wrote that Bitcoin was moving from its deceptive phase to a very disruptive phase. At the time, one bitcoin was worth $600.
That disruption is now going mainstream.
Just last week, Bitcoin reached a record high of $40,000 (doubling its value in one month), and the value of all cryptocurrencies surpassed $1 trillion. And last month, the digital currency exchange Coinbase, the most valuable crypto company in the US, filed for an IPO.
So, why should you care?
Because bitcoin and other digital currencies are reshaping how we think about and use money—making it more digitized, dematerialized, and democratized than ever before.
I’ve been tracking Bitcoin since its inception and have been active in the market for years. I’ve even accepted Bitcoin as payment for participating in my annual Abundance 360 Mastermind Summit.
And I’m incredibly excited about Bitcoin’s future prospects.
In today’s blog, I’ll discuss what Bitcoin is, its evolution, and how you can get involved.
Let’s dive in…
For starters, Bitcoin is a digital currency. As I mentioned above, the current value of one bitcoin is about $40,000. Bitcoin is divisible down to 8 decimal places, or 0.00000001 BTC. You can buy things with Bitcoin, sell things for Bitcoin, and exchange Bitcoin for other currencies (and vice versa).
At its core, Bitcoin is a smart currency, designed by very forward-thinking engineers. It eliminates the need for banks, gets rid of credit card fees, currency exchange fees, money transfer fees, and reduces the need for lawyers in transitions… all good things.
Most importantly, it is an “exponential currency” that will change the way we think about money. Much the same way email changed the way we thought of mail. (Can you remember life before email?)
If you’ve followed my work, you understand that I teach and track exponential technologies using my 6 Ds approach, looking for “User Interface Moments.”
Bitcoin is tracking the 6 Ds perfectly. Let me explain.
Founder and CEO of Digital Currency Group Barry Silbert spoke as my guest at Singularity University’s Exponential Finance conference about Bitcoin in 2014.
Back then, he outlined the technology’s near-term trajectory, which put me on the lookout for its User Interface Moment: that point when an entrepreneur designs a piece of interface software (think Marc Andreessen and Mosaic) that makes it easy to use Bitcoin.
We have reached that moment in the last year.
Building on Barry’s predictions, I’ve outlined five phases for Bitcoin that help explain where it’s been and where it’s going:
PHASE 1: The period 2009 to 2011 was the early “Experimentation Phase” for bitcoin (i.e., deceptive). Here the software is released to the public, and most technologists and hackers started playing with the code. During this phase, there was no apparent value to the currency yet. Mining bitcoin was easy and could be done by a single person on a MacBook or PC.
PHASE 2: 2011 marked the beginning of the “Early Adopter Phase” (still deceptive). There was a lot of early hype and press around Silk Road (where you could buy drugs). The value went from less than $1 to over $30, then crashed. This spurred the first generation of Bitcoin companies to build basic infrastructure: wallets, merchant processors, mining operations, exchanges, etc. (i.e., the early User Interfaces).
PHASE 3: 2012 through mid-2014 marked the beginning of the “Venture Capital Phase.” Folks like Marc Andreessen, Google Ventures, Benchmark and others began investing in Generation 2 Bitcoin companies. In 2018, venture capitalists invested $1.3 billion in blockchain companies, and thousands of bitcoin companies have received funding since.
PHASE 4: The “Disruptive Phase” began in 2014 when Wall Street entered the Bitcoin market. Here we began to see institutional money acknowledging digital currencies as an asset class. They started trading it, investing it, and creating products around it. In 2020, institutions such as Fidelity and PayPal launched Bitcoin funds, and companies like Square and Microstrategy have even started buying Bitcoin with their own capital. With the entry of these larger players, Bitcoin has become more regulated and is moving away from the frenzied rallies and instability seen in its earlier phases.
PHASE 5: Finally, the “Mass Global Consumer Adoption Phase” is starting. This is where Bitcoin becomes a major player in the global economy. Just last year, JPMorgan released the first US bank-backed cryptocurrency, the “JPM Coin,” further legitimizing the technology. Goldman Sachs is also expected to release its own coin soon. As consumers feel it is easy, safe and secure to use Bitcoin, the technology’s exponential growth begins.
And last year, Bitcoin quadrupled in value. Over 11.9 million transfers (of <$1,000 worth of bitcoin) into personal wallets occurred in 2020, up from about 9.1 million in 2017. The cryptocurrency has already reached record highs this year and is on its way to dematerializing, demonetizing, and democratizing our society.
Learn, do, teach… Go experiment! Create a bitcoin wallet and buy some Bitcoin.
There are now multiple exchanges where you can buy Bitcoin with dollars (or other currencies). Two of the most popular platforms are: Coinbase and Square Cash.
If you want to start accepting Bitcoin in your business, a popular platform to do this is Bitpay.
There’s no better way to learn than by doing!
If you want to understand how converging exponential technologies are reshaping banking, finance and other industries, then consider joining my Abundance 360 Mastermind Summit.
Every year, my team and I select a group of 360 entrepreneurs and CEOs to coach over the course of a year-long program. A360 starts each January with a live event and continues every two months with Implementation Workshops, in which I personally coach members in small groups over Zoom. (In January 2021, you have a choice of live “in-person” or “virtual” participation. See the A360 website for more info.)
My mission is to help A360 members identify their massively transformative purpose, select their moonshot, hone their mindsets, and leverage exponential technologies to transform their businesses.
To learn more and apply, visit abundance360.com.