I don’t get maximalists – especially Bitcoin maximalists, or “maxis,” as they’re called. Maxis are over the Internet. You know, the ones who look suspiciously like the gold bugs that have been screaming into the night wind since Nixon took us off the gold standard in the 1970s.
“Forget dollars – Bitcoin’s going to be the only money… Anything other than Bitcoin is crap… The Bitcoin blockchain is the only way to go… Blah, blah, blah.”
Maximalists. If you want to maximize something, maximize yourself. Maximize your potential. Maximize what you can accomplish. Maximize your profits. But don’t maximize any one single asset. There is no asset that can do everything and anything that anyone could want or need it to.
More importantly, there is no one asset that can make an entire fortune outside of pure blind luck; I believe in the “5 Ts,” not luck.
Bitcoin is where crypto began, and it will always be critically important, and it’s a hell of a good investment. But It’s not the end-all, be-all of crypto.
I think the actual future of crypto will be much more diverse – and so much more lucrative that it’d be if there were only Bitcoin.
So, if you’re a Bitcoin maxi, we can leave it here. Best of luck – you’ll need it.
But for people who want to know where the serious money in crypto is going to be made, here’s what I’ve got for you…
Bitcoin Is Great, But…
So, Bitcoin has seen some extreme gains – tens of thousands of percent since the genesis block. And Bitcoin will likely see good gains in the future.
But it’s not going to 10X, or 100X, or 1,000X your investment. Because, again, it has to do with what Bitcoin is.
What does Bitcoin do? It persists. That’s what the blockchain technology that it made use of for the first time does. It keeps transaction records safe using a decentralized ledger and proof of work algorithm to force computers to work extremely hard to update it.
If a Bitcoin transaction is made, the Bitcoin blockchain isn’t going to be forgetting it. That’s about all it does. And what this does is set bitcoin up to do what gold does, but much better than gold. Again, that’s all.
It stores value, and you can send it across the ocean without needing to put a literal ton of bricks on an airplane. Once people accept it in that role, it’s going to disrupt that role.
But even though Bitcoin is the first crypto, it’s not really a currency, and while I’m at it, it’s not money. Sure, in theory, you can rig up a system that lets you spend it the same way people in ancient Rome spent silver coins. That doesn’t make it money.
Bitcoin is deflationary by design. It’s designed to strictly limit the amount of new coins entering circulation, and combined with the pace of new adoption, there are unlikely to be enough coins to go around. That’s why it’s been such a good moneymaker in the past.
But spending that kind of asset in a store never makes financial sense. If it’s going to be worth more tomorrow, why let it go for a box of Honeycomb Cereal or a tank of gas today? Paradoxically, if everybody is using hard money, it slows down the economy, makes people poorer overall.
A currency that people are meant to use on everyday expenses needs at least a little bit of inflation to keep the wheels turning.
So, Bitcoin will only ever be Bitcoin – and that’s perfect. There’s a place for it in every portfolio, right at the foundation. But it won’t be the money of the future. It won’t be some new magical revelation that’s going to change everything.
The money of the future, the “juice” that’s going to help run entire industries and economies – which we’ll use to pay off office Super Bowl bets, or in Metaverse storefronts, or with which we’ll buy houses or cars and go on real-world vacations – is something someone else will have to create.
Of course, it’s possible they already have.
The Future of Crypto Is Big
Those cryptos – that’s “cryptos,“plural – will have the potential to make you obscene multiples because of their demand, because of their disruptive capacity, and their versatility. In the future, no one crypto will be “king.”
So, the future of crypto and crypto moneymaking is diverse. These are two likely candidates I can talk about right now.
Ether (ETH) has been the #2 cryptocurrency for some time, and it’s still improving. We’re getting close to the Ethereum Merge update that will abandon proof-of-work for proof-of-stake, so that ETH will no longer depend on massive stockpiles of computer chips and fossil fuel to maintain itself. Since the whole world has been stressed out over the price and environmental impact of those two commodities lately, it’s a pretty forward thinking move.
And Cardano (ADA), another favorite crypto, has been proof-of-stake for a long time. Back in 2021, its Alonzo update gave it smart-contract functionality, and, perhaps in a matter of weeks, its Vasil update will be a huge step in maximizing its utility and efficiency.
These two are extremely versatile cryptocurrencies than can act as more than just stores of value. I can easily envision paying off a mortgage in ETH or settling a bar tab in ADA
And, like I said, it’s possible the biggest winner hasn’t come off the drawing board yet. That’s why I’m always watching, always weighing the new offerings against the 5 Ts. The future of crypto in the economy is going to be a fiercely competitive space, but don’t look for one winner.