The Cryptocurrency Story (Bitcoin Is One)
This blog post was featured in the Huffington Post on September 27, 2017.
For me it all started with my contractor. He told me that every dollar he saves he buys bitcoins. He strongly suggested I do the same. He told me he bought his bitcoins for about 100 dollars each. It was 4800 dollars each only after four years.
I felt he had a winning argument and decided to try and investigate this phenomenon experimentally. I instructed my money manager to buy ten thousand dollars worth of bitcoins so I could learn what is going on.
He refused. This is a speculative bubble, he said.
So, I did nothing.
This week a startup company in the advanced stages of their development from Belarus asked to come visit me to help them develop a strategy on how to go forward.
What business are you in, I asked?
Cryptocurrency, bitcoin being one of them.
I warned them that I knew nothing about this field but if they believe (I do) that an ignorant can add value by asking intelligent questions, that the knowledgeable do not dare to ask, I will accept the task. But I warned them, they need to educate me on their wallet.
So, I spent two days learning. At the end, I ended up buying several cryptocurrencies and accepted to be member of the board and consultant for the company for some equity.
And here is what I learned so far.
Basic principles of Blockchain technology, which is a peer- to- peer network existed for many years before bitcoin was created. (See Wikipedia) In 2008, Satoshi Nakamoto wrote a paper on how and why to create with this technology an electronic cash system called bitcoin.
see source material:
and a must watch: a Ted talk by a partner of the Boston Consulting Group explaining what it is all about
Bitcoin, as an electronic cash, provides a peer-to-peer global transactions.
It has advantages. They overcome the disadvantages of paper money, so called fiat money which are:
The central bank can print money and thus increase money supply which can and does create inflation. Bitcoins are fixed in quantity.
Government can seize your money. It cannot with bitcoins because who owns is hidden by an electronic code which cannot be hacked.
Government can tax your money, NO way with bitcoins because governments have no way to find out who owns what.
Moving money from one country to another might be prohibited. Or costly
Bitcoin crosses political boundaries electronically.
Due to those advantages, Bitcoin had the possibility of becoming a global currency, not necessarily to replace fiat money but to run parallel to it.
Some people got interested and started buying. It became a vehicle for speculative investment because there was demand but limited supply. The price of bitcoins went up from August 2, 2013 when the price was 100 dollars, to 4817 dollars on September 1, 2017 . In 4 years. Calculate the percentage of appreciation……
The increase in value attracted other programmers. Why don’t we issue our own crypto coin and with other attractive features? Cryptocurrencies (CC) were born. One of the new ones was the ETH.
The increase in value of cryptocurrencies, especially the bitcoin, made stores interested in owning bitcoins too and they started accepting cryptocurrencies. Now CCs were not anymore just a speculative investment but also a transaction vehicle. A real currency.
Enter speculators. Using the social network, and there is a special channel for cryptocurrencies buyers and sellers, seeand they started feeding the market with damaging real and fake news that impacted the price of the currencies. Take the latest example. They fed the news that China is considering prohibiting cryptocurrency exchanges in that country. Those with weak nerves rushed to realize their profits and sold their currency. In the case of the bitcoin, the price went down from 4800 to below 3000 dollars. Now the speculators could buy at a cheaper price and wait for the price to go up. Between September 15 and 16 in twenty four hours the bitcoin went back up from 3000 up to 3765. In twenty four hours
What is happening now?
There are probably millions of people worldwide owning one type or another of cryptocurrency, (CC). The value of all cryptocurrencies in the market, as of now, in dollars, is over 120 billion dollars. Reference:There are hundreds of CC exchanges where you can buy and sell CC. And there are hundreds of stores that accept cryptocurrencies. But there is a problem.
Say a buyer comes to a store that accepts his coins as a payment. The store accepts the CC, and if he does not want to keep the CC for himself and wants cash instead, he has to go to a CC exchange to exchange the CC for cash. Because of speculators, the price of the CC goes up and down violently minute by minute. Until he finds the right exchange, the price at which he got the cc might be higher or lower than the price he was willing to sell the goods in dollars for. Not too exciting and also too time consuming.
People need a vehicle to exchange goods for a cryptocurrency and the cryptocurrency for cash, in real time, easily and cheaply.
That is where the CopPay project comes in and adds value.
CopPay developed, alpha and beta tested, a virtual terminal which is a SW that can be downloaded into any computer or mobile device. The company will offer it to stores for free to download it into their computers. And there will be a big poster in the store announcing which CC’s it accepts.
A buyer will look for a store that accepts CC. (That is another reason why stores should accept the CopPay terminal. It attracts clients.)
The store inputs the data: what CC the buyer is going to pay with, how much what he wants to buy is worth in dollars and let us say that the store wants to be paid in cash.
The CopPay terminal seeks a CC exchange that is willing to buy the offered CC for cash, at the highest exchange rate. The CC exchange has either cash in its reserves or a buyer that wants to buy the offered CC for cash. CopPay executes the transaction: the buyer paid in bitcoin from his electronic wallet, the store got the payment in cash and it is recorded in its bank account. CopPay charges a commission for facilitating the trade which it adds to the rate of exchange it charges the buyer. The commission is lower or the same to what the buyer could get by himself if he went to the exchange. If there is no exchange that is willing to buy the CC for cash, the CopPay terminal rejects the deal.
How CopPay gets a better exchange rate? CopPay analyzes many Exchanges and gets the best rate for free or for a lower commissions they would charge individuals because CopPay brings to the Exchange a lot of deals which increases its liquidity.
This is a win- win proposition to all involved.
The buyer can use his cryptocurrency.
The store can convert the CC to cash with no commission. The capability to accept CC attracts buyers with CC. The terminal costs the store nothing.
The CC Exchange is happy too. It is getting lots of deals.
And the CopPay company is happy no less. It is earning commissions.
Where is the problem?
Will government accept all of this going on?
They have two choices: join the circle dance and start dancing too or try to stop it.
It will be difficult to stop. You can stop it in your own country and legislate that electronic code owners have to be identified (their transactions are transparent. that is the block chain technology) but CC owners will then buy and sell in countries that do not have this law. And there will always be such countries. The chance that there will be a global agreement to stop crypto currencies is improbable.
Many countries are joining the dance: Japan, Germany, Holland, Estonia, and many are others are considering legalizing Crypto Currency. The need for CopPay is there and it is solid.
From October 16, 2017, for a month, CopPay is selling Cops. It needs to perfect the SW of the terminal and to place the terminals in stores.
That is all good and fine but why CopPay is a good deal? Why buy Cops?
Many of the extra services the company will offer via its terminals have to be paid in Cops. (The mission of the company is to continually develop and market hardware or software or services the cryptocurrency industry needs). Furthermore, ten percent of the proceeds from the ICO, the fund-raising event, will be used by the company to create a fund in order to buy back COPs at the market price when there is a need. There is more in store that the company intends to do which they are keeping to itself for now.
I honestly suggest that you learn this new world. You can buy ONE ETH for not much money. Today it is quoted at 278 dollars. Open for yourself an electronic wallet. There is a video https://www.youtube.com/watch?v=D7h0C81ukhU that teaches how to do it. Chose the exchange that bitcoin recommends www.cex.io.ltd (I did) On October 16, buy one ETH, and with it buy COPs. (You cannot buy with dollars. Only with ETH coins.)
Ok. you might lose your money. But for less than three hundred dollars you could learn what this new economy is about. I believe it is the future.
To know more about CopPay, the web site is www.CopPay.io
This time not only thinking but acting