Despite their current fame and intrigue, cryptocurrencies are highly volatile and risky. I don’t have the stomach for such investing, but I did want to see what all the buzz was about. I also wanted to support the entrepreneurs who are creating new monetary and investment methods, and the local businesses that are eager to accept alternative currencies.
My First Cryptocurrency: Bitcoin Cash
My first step was to visit Bitcoin.com and download their free mobile wallet app. Bitcoin.com is an informational website on cryptocurrencies, as well as a portal for buying and selling these digital assets. It’s a great place for beginners like me. The company’s founder, Roger Ver, announced this week that he is donating two major gifts to FEE totaling $2 million in Bitcoin Cash (BCH), a type of cryptocurrency with low transaction fees.
“I was a subscriber to FEE’s long‐running magazine The Freeman when I was in high school and I owe a lot of my success in Bitcoin to what I learned reading about the moral urgency of having a monetary system that exists separate from state force,” Ver said in a statement about his generous gift. “I was looking around the world today and I saw global lockdowns, inflation, attacks on individual liberty, and I thought: ‘Who are the most important voices of freedom today?’ FEE is at the top of my list. I want to help FEE have the same impact on the lives of millions of young people that they did on mine.”
That kind of passion for liberty and cryptocurrency prompted me to act. After downloading the Bitcoin.com mobile wallet, I followed the simple instructions and purchased $100 in Bitcoin Cash. It was easy and straightforward. Next, I had to decide what to do with my cryptocurrency. My 12‐year‐old son asked what I was working on. I told him I would pay his allowance this week in Bitcoin Cash if he wanted. Always eager to explore a new app, he quickly downloaded the Bitcoin.com wallet and within a few minutes his allowance appeared on the screen.
How else could I use my Bitcoin Cash? On their website, Bitcoin.com offers a worldwide searchable map to locate nearby businesses that accept cryptocurrency. I was pleasantly surprised to find so many restaurants near me that welcome Bitcoin Cash and so I bought Chinese takeout for the whole family.
As I mentioned, I do not intend to be a committed cryptocurrency investor—although I can fully understand the appeal—but I likely will continue to purchase more of these virtual currencies to use at local merchants and some of the major companies that now accept them, including Whole Foods and Bed Bath & Beyond.
The Newfound Appeal of Cryptocurrency
Not too long ago, using or investing in cryptocurrency was considered a fringe act. Investor Warren Buffett once called Bitcoin “rat poison squared.” Now, it’s viewed as smart portfolio diversification, a protection against inflation, and something esteemed institutions such as MassMutual and billionaires such as hedge fund manager Stanley Druckenmiller actively invest in. This is a reversal for Druckeniller who said in 2018 that he “didn’t want to own bitcoin,” and who now believes that his cryptocurrency investment will “work better” than gold.
And that rat poison that Buffett referred to in 2018? Bitcoin’s market capitalization is now nearing that of Buffett’s company, Berkshire Hathaway.
Pandemic policies have contributed to this newfound appreciation for cryptocurrency. Governments have printed money at an astonishing pace over the past year in response to lockdowns and related economic disruption, causing many individuals and investors to be concerned about future inflation. Suddenly, virtual currencies seem more appealing. Unlike fiat money, or money issued by a government, such as the US dollar, most cryptocurrencies have strict built‐in limits on the extent to which they can be inflated and therefore devalued.
As a decentralized, peer‐to‐peer alternative method of exchange that is difficult to digitally “mine,” cryptocurrency challenges established norms and offers a new monetary vision.