Ben Milne is the Head of Platforms and Partnerships for Posterscope
5 – 7 minute read
Most will no doubt have heard of bitcoin and the blockchain that enables the cryptocurrency to function. Clay recently explored the disruptive power this technology could have on the media supply chain in a piece he wrote for Campaign Asia you can read here.
For this article I intend to focus not on the encryption and blockchain but instead on the currency aspect of Cryptocurrency, through the lens of my own personal experience.
To me the idea, that exists at the heart of Crypto currencies, that vast power structures such as central banks can be disintermediated and their functions decentralised breaking down monopolies and accelerating the transition to a more just & equal society is the idea that got me hooked.
My first experience of cryptocurrency began around 7 or years ago. It was a spring evening in 2010 and I read an online article about a virtual currency that was going to completely transform the global banking system and the way we all trade with each other. A few days and a lot of articles later the decision was made, I had become a Bitcoin miner. Donating my spare computing power to a lofty goal wasn’t new to me – I was already participating in SETI@home (the decentralised search for extra-terrestrial intelligence). At this stage the monetary reward didn’t really factor into decision making at all, Bitcoin was valued at $0.08 then, earning a few cents every day or so wasn’t a big motivator.
Once I had setup an old gaming PC at home correctly it began its job of processing transactions on the bitcoin blockchain and in return I was rewarded periodically with bitcoins. The great thing was that once setup you could forget about it. After a few months the constant computer fan noise became annoying and I got bored with the project so I turned off the machine and made a mental note to check the results some day later.
Fast forward to today and somewhere along the journey the old mining PC has either been sold or lost and having moved house and country three times in that time the chances of locating the data intact are next to zero. I have no way of knowing how many bitcoins I was rewarded, I never did get round to checking, although most of my investigations suggest it would be somewhere around 100 bitcoins which would have been worth around $8 then but would be valued at just under $400,000 today!
The next time my life intersected with Bitcoin was November 2013. The FBI shut down The Silk Road, a darknet black market and consequently Bitcoin was back in the news. At this point one bitcoin was valued at around $100 and it had become economically unviable for single users to mine them using amateur hardware (the cost of electricity outstripped the value you would potentially receive in return). Having recently read a convincing economic article that argued a single bitcoin would end up valued at $20,000 (based on the cap of 21 million bitcoins that exists) I decided the time was right to buy in, a good decision it seems as I have theoretically seen 4000% growth, although if I will ever cash out is another question and another article all together.
As a currency I think it is still really early days and there is a long way to go. There aren’t really that many ways to acquire or spend it and the main economic activity happening seems to be Cryptocurrency trading. The rare few times I have been presented with the opportunity to use bitcoin to pay for something I have instead opted to hold it and pay with ‘fiat’ currency (normal government backed money).
The only thing I have ever bought with Bitcoin is other Cryptocurrencies, known in the market generically as ‘altcoins’ and that is only because for many of them it’s the only way to buy in.
Bitcoin is just the tip of the Cryptocurrency iceberg, the more involved you get you will come across digital wallets, cold storage offline wallets, Cryptocurrency exchanges, ICO’s (initial coin offerings – like an IPO but unregulated!) and more, each adding a new layer of complexity to the landscape that you previously thought you understood. Making big bets is not for the faint hearted, daily swings of up to 50% in either direction are currently quite normal for some altcoins meaning you could effectively beat the casino or you might just lose your shirt and your house if you were that way inclined!
Since the success of that small investment in 2013 and the realisation that I missed out big time on the early days of Bitcoin I have made small investments into other crypto currencies, hoping to recapture the opportunity, such as Ethereum, Litecoin, Nav Coin, Ripple and others. Some of those have turned out to be great others not so and recent regulatory overreach in China has led to a lot of instability in the market which has sent portfolio’s tumbling however despite this I am bullish on the future of Cryptocurrencies in general and I don’t mind making a few bold predictions about how I think this could impact our business or industry (over and above the Blockchain applications pointed out by Clay).
So here we go with my Cryptocurrency predictions;
- If not already then by 2020 we will encounter a client or supplier who wants to pay or be paid in Cryptocurrency so before then we will need to establish rules around this.
- One of the big technology companies will launch their own Cryptocurrency (my bet would be Google first) and maybe even begin to pay staff in this. The ICO will be huge too!
- At least one person in our global network will become a cryptocurrency millionaire, I am doing my best to make it me but its early days still so there is time for everyone to get involved.