Cryptocurrencies and the Scope of Bitcoin
I get a lot of questions about Bitcoin, and I do not claim to have the answers. However, in this post, I will try to clarify some facts, and offer a few opinions. Currently, there are more than 1,000 cryptocurrencies. The total market capitalization (value) of all cryptocurrencies now exceeds $150 billion. The value has grown dramatically, but is a drop in the bucket compared to the value of all forms of money in the world, which is approaching $100 trillion. As of this week, of all the 1,000+ cryptocurrencies, only 12 have a value exceeding one billion dollars. The top three are Bitcoin, Ethereum, and Ripple.
The value of Bitcoin is approximately $100 billion. That is 3.5 times greater than the total value of Ethereum and 12.6 times Ripple. These values are as of Noon on 10/26/2017. By the time you read this post, the values could be much different. The values of cryptocurrencies are volatile. This is a concern to many people, but I see it like baby steps. Cryptocurrencies are at their infancy.
Coinbase, a San Francisco cryptocurrency startup recently valued at $1.5 billion, said nearly 50,000 businesses use Coinbase services to integrate Bitcoin payments into their businesses. There are many other companies which provide similar cryptocurrency payment services. Some of the more well known companies which accept Bitcoin for payment include Intuit, Bloomberg, USAA, PayPal, United Way, Overstock, Dish, Expedia, Bing, Microsoft, and Tesla. A list of the biggest (and some of the smallest) names which accept digital currency is here.
A debate continues about whether Bitcoin is a currency or an asset. Experts around the world have different opinions. My opinion is Bitcoin is both. Some are saying Bitcoin is on the way to $10,000, and others say it is on the way to a huge implosion. In my opinion, nobody knows. I continue to view cryptocurrencies as analogous to the Internet of 1995. At the time, some said it was the future, and others said it was a fad.
Disclosure: I am an investor in Coinbase and in Bitcoin.