Tales from the crypto
Cryptocurrency. It is sort of like knowing what the internet was about in the early-1990s. In a nutshell, cryptocurrencies such as Bitcoin, Dash, Ripple, among hundreds of others, are virtual, digital money with no bank or government supporting it. The WWE of financial assets where values can rise to great heights or fall precipitously in a matter of hours.
A volatile environment where fortunes can be made or lost overnight could explain why the concept is rapidly gaining acceptance. In 2016, only 1 percent of Americans had a stake in cryptocurrency, that number is up to 8 percent today. Bitcoin kiosks can be found in convenience stores alongside ATMs.
I asked folks from wildly different backgrounds why they entered this murky marketplace.
Rob Joyce, drummer/lead singer of Time Machine Dive-By, a Greensboro based punk band might seem like an unlikely player, but he isn’t when you consider why he got into the game.
“It was the hype,” he confessed. “I mean, it was the hype mixed with the fact it had been around for so long, it was blowing up, so I decided to get into it.”
For Joyce, cryptocurrencies’ inherent volatility is part of the allure.
“In one day there could be a $200 fluctuation, then it could dip back down the next day. Buy it low, sell it high.”
He put up about $1,000 in 2016 and has, on several occasions, pulled out profits. He said the obsession feels like gambling.
“It hasn’t been super lucrative lately; the market’s been going down. I wouldn’t suggest investing unless you’re willing to lose your money.”
High Point entrepreneur and member of Los Angeles think tank Media Entertainment Technology Alliance Michael Hayworth came into cryptocurrency a few years earlier than Joyce. In 2012, he attended a breakfast for the think tank, and he said a venture capitalist recommended buying Facebook on the secondary market for $0.25
“I spent a day and a half researching Bitcoin,” he said. “My regret is not putting in more. Since then, I’ve participated in several ICO’s and my experience is quite prosperous.”
In recent days Google, Facebook, and Twitter announced a ban on cryptocurrencies and initial coin offerings ads, as well as related content like trading advice and cryptocurrency wallets, but Hayworth is not worried about the snub.
“I’ve heard Bitcoin called a scam, Ponzi scheme, and been mocked for my fascination in cryptocurrency since I got into it,” Hayworth said. “I believe that the future of cryptocurrency will see a large majority of the altcoins disappear, with around 10-15 out of 1500+ surviving and becoming giants identical to the dot-com bubble.”
“Chris” (who would prefer not to be named in this article because “crypto is sketch”) is a 34-year-old IT professional from Greensboro who recalls first hearing of cryptocurrency around 2009.
“My roommate came to me and said, ‘Have you heard about this Bitcoin? It’s a way to transfer money anonymously, avoiding the middlemen,’” he said. “It was like a form of cyber-activism. It seemed cool.”
He said the underpinnings of cryptocurrency was that it pays users to be a part of a supercomputer.
“Revenue is generated through blockchain technology, harnessing the power of multiple computers connected over the internet, all working together to solve really enormous mathematical problems that a single computer couldn’t,” he explained. “You don’t really get to know what the purpose of the blocks is. You buy your way into a block, but you don’t ever get to know what they’re going to use it for. So there’s a kind of mystery behind it.”
Chris remembers in the early days of Bitcoin and cryptocurrency, “You could just leave your computer on, and it would make you money.”
However, he said back then it wasn’t worth much, not even his increased power bill from leaving his computer on all night.
A Business Insider article by Frank Chaparro states that in 2017, the value of a single Bitcoin had risen from $900 in January 2017 to almost $20,000 by December 2017, followed days later by a drop that sheared billions of dollars out of the cryptocurrency market. On the afternoon of March 29 (a particularly volatile day), Bitcoin was trading for around $7,500, stated A Business Insider article by Oscar Williams-Grut.
As for the future of Bitcoin and cryptocurrency, Chris said it is unknown. “That $20,000 per coin late last year, people were kind of mesmerized by that,” he said. “The future may be smaller coins; it may be like penny stocks.”
Regardless, Wall Street-based Fundstrat’s Tom Lee stated that “Bitcoin is still on track to end the year at $20,000.”
Whether cryptocurrency merely survives or thrives, the underlying Blockchain technology is here to stay. Banks are using it to make transfers faster and all their digital transactions safer.
“An excellent example of a company using blockchain is the Crypto Kitties game, which its makers have compared to ‘Beanie Babies for the 21st century,’” Hayworth notes. “They recently raised $12 million from venture capitalists, and several of the kitties have fetched prices northward of $100k.”
Comic book geeks may catch my allusion to EC horror comics in the title of this piece. Hopefully, this tale will be spared the inevitable macabre EC twist ending where The Crypt Keeper cackles as everything goes wrong.
As for Joyce, he is not worried and is “in it to win it,” because he has diversified his investments. “If the market gets healthy again, I’ll have a lot of oars in the water, so to speak.”
Billy Ingram, aka MC AC/DC, is the author of five books and the producer of The Nathan Stringer Summer Music Show featuring an all-star lineup of local music artists.