Bitcoin is $10,987 USD as of 8:07 am Wednesday November 29 2017.
I saw this coming four years ago.
Just over a year ago I called it again. At Tim Francis’ 80/20 Summit in Banff Alberta.
Bitcoins were $600 then.
Dan Sullivan sez: A long list of government agencies could be replaced with an iPad app, and the apps would do a better job.
Dan is correct. And whether people ‘get’ it or not, that is exactly what is going to happen during the next 20 years. The conditions are already in place. The only thing standing in the way of that is the ability of the government to print money. Right now they do it with impunity.
But something is on the horizon that will bring that to a halt. You know what it is?
Bitcoin is a digital currency where every aspect of every account is public except for the identity of the owner. It’s a system that, so far as anyone can tell, is impossible to cheat. Only a fixed number of bitcoins can be issued (21 million) so it’s capable of becoming a “gold standard.”
Bitcoin markets and currency exchanges are popping up everywhere. It’s free. Frictionless. It’s not possible for any government to regulate it or shut it down.
Bitcoin is the next de facto international currency. Just like Wi-Fi and Internet are now the defacto international communication standards.
Bitcoin is to money TODAY what the Internet was to communication in 1997.
I got my first email address in 1995 through a dial-up service with a 1200 baud modem. In 1997 I had a 14.4 Kbaud modem and Windows 3.1. That’s where Bitcoin is now.
(By the way…. I’m NOT advising you to run out and buy bitcoins the way you buy gold or silver or stocks. Maybe that would be a smart idea, maybe not. I don’t know. It’s going to be HUGELY volatile until everybody has at least one friend who regularly uses it to buy stuff. That’s still a long way off. How many of your friends had email addresses in 1996?)
It won’t gonna happen overnight. The process will be herky-jerky. But it’s going to roll out faster than the Internet did.
Because the Internet is already here. Bitcoin will be the next layer of the Internet.
What do I mean by ‘layer’?
First you had to have the infrastructure. They built it in the 70’s and 80’s. Then Tim Berners-Lee invented the web page in 1992. ISP’s started popping up everywhere. People started buying modems.
Email systems cropped up, and AOL CDs littered airplane seats. Modems got faster. Phone and cable companies re-wired the “last mile” with fiber and retrofitted cable TV runs with Internet. Services like eBay and PayPal grew like kudzu. Lousy search engines got replaced by a certain good search engine. Then audio came, then video, then Social Media, then Smart Phones.
Today the web is worlds within worlds. If you wanted to, you could exist with nothing but Facebook as a communication medium.
Markets flow towards the frictionless path. This is why even Google’s properties like YouTube have Facebook and Twitter share icons on every video. Google HATES that. Hates it. But they get more traffic by having the icons than by trying to pretend those properties don’t exist.
The connections between these players is kind of like “The Ritual of Chüüd” in Stephen King’s classic horror novel IT. In the Ritual of Chüüd, two opponents face each other and simultaneously bite each others’ tongues.
The first one to laugh gets killed.
This is why PayPal will have to accept bitcoins. So will Visa and MasterCard. So will your bank. So will the Internal Revenue Service. They won’t be able to get rid of it any easier than anyone could get rid of Facebook, or email.
Do you have time to prepare? Sure. There’s not going to be a giant explosion next week. But once again, think: Internet 1997. Think of the advantages those of us had who “got with the program” in ’95 or ’96 or ’97 instead of waiting until ’99 or 2000. That head start is still benefiting us.
Which brings me to my next point:
The End of America
Agora’s Porter Stansberry produced a very famous YouTube video called “The End of America.” It looks simple and homespun, but was crafted by some of the most badass copywriters in the world. It’s a video sales letter well over 1 hour length and it totally spiked Agora’s newsletter sales.
In this video, Porter explains how the U.S. government has been able to print money with impunity for decades for one simple reason: The U.S. Dollar is the de facto world currency. Not the British Pound, not the Yen, not the Yuan, not the Euro, not the German Mark. The Dollar.
Porter says the world is going to switch to some other currency, and the day that happens is the day the music stops in America.
There’s only one problem with his theory. Karl Denninger said it best:
“The Dollar is a hooker with crabs.
All the other currencies have AIDS.”
So the world is kinda stuck with the Dollar for the foreseeable future.
Except… the world is not stuck with the Dollar.
It’s got Bitcoins.
Some time in the next 3-6 years, expect a seismic shift. Politicians won’t be able to kick the can down the road anymore, because the can will hit a brick wall.
I was talking to my 17-year-old daughter about this. She said, “OK, this will happen but it’s not going to be really scary or anything, is it?”
I replied, “There is no way for any government treasury to fail without massive repercussions.”
The Thai Bhat dropped more than 50% fifteen years ago and the Thai stock market lost 75% of its value in a matter of months. Thailand did survive, by the way.
This shift 3-6 years from now will be the first time such an event happens with citizens still having access to an alternate stable currency at the same time. Therefore this is not the fall of a house of cards, so much as it’s a TOTAL reshuffling of the entire deck.
A great number of assets are going to be VERY liquid and much wealth will change hands. The world of 2030 will be unrecognizable compared to now. This is a massive world transformation.
This will HUGELY benefit you if you’re prepared. If you’re agile. If you’re plugged into wise information sources.
The seismic shift I mentioned above has not yet happened. What you’re seeing right now is a bubble. It’s going to continue to be EXTREMELY volatile.
Why is the current $11,000 valuation of Bitcoin a bubble?
Because most people aren’t using Bitcoin for actual financial transactions.It’s 99% speculators and 1% drug dealers.
Not only that, every news outlet on earth is buzzing about it.
It’s just like the Internet ~2000. Back then the Internet was more of a toy than a necessity. People used it to forward jokes and visit chat rooms and sell old bicycles on eBay. Not to conduct serious business.
But everybody who had any brains at all realized the Internet was the biggest thing to happen to mankind since fire.
They knew this was going to be huge. They knew fortunes would be made that would dwarf 20th century fortunes. This was bigger than Ford or Carnegie or Rockefeller. Or Starbucks or IBM or Microsoft.
Everybody knew some players were going to win – and win BIG.
But the actual building and integration of the technology couldn’t keep up with the demand. So stock prices spiraled out of control.
Some thought the bubble would last forever. They proclaimed that the New Utopia had arrived. They thought the rules of the world had changed.
The fundamentals had not changed at all.
So in 2001 it crashed. And crashed HARD.
By 2002, you couldn’t get funding for a dotcom startup to save your life.
Google AdWords launched in February 2002. Precisely when people were MOST despairing and cynical about the future of the internet.
AdWords was the biggest domestication of the wild west in Internet history. It signaled the ability for regular businesses to put a dollar in and get a customer out.
The Internet became a real business, instead of a toy. Since then, innumerable fortunes, both great and small, have been built by people who figured out how to put a dollar in and get a customer out.
But in 2000, those same, sane people didn’t stand a chance on the Internet. They were drowned out by the noise. And 99% was noise.
I remember this VERY well. I started using AdWords in April 2002 and eventually wrote the world’s best selling books on both Google and Facebook ads.
From 2002-2010 the sane people RULED the Internet.
And many of us built great businesses and great careers.
So here’s what’s going to happen with Bitcoin.
It’s going to crash, and crash HARD.
I have no idea.
I can only tell you this: If Buzzfeed is telling you to buy, IT’S TOO LATE.
It’s going to crash and there’s going to be a vast crater. Wasteland.
And in the aftermath of the wasteland, the real growth will begin.
Some country like Zambia or Argentina or Bhutan will hit 1000% per week inflation and currency meltdown.
Shopkeepers, in order to buy and sell bread and pay their employees, will have to switch to Bitcoins with QR codes on their smartphones. Because Zambia dollars will be worthless.
And in the space of 3 weeks, an entire nation will switch over to Bitcoin.
And it will never go back.
Bye-bye, Zambia dollar.
This will transform the very definition of a Nation-State, because up until now, all countries control their own currency. They must, in order to be sovereign.
Post-Bitcoin, governments will no longer be able to print money at will.
All they’ll be able to do is police the Internet.
(Maybe that means all the Police Departments will report to Google. Maybe it means they’ll arrest everybody who uses wrong transgender pronouns in their emails and Facebook posts.)
And once Zambia is on Bitcoin… Zimbabwe is next. And Malawi is next. Mozambique is next.
And just like the dominoes of Internet and smart phones fell, so will the dominoes of cryptocurrencies.
And Bitcoin will go from being the most volatile currency to the most stable currency. Because no country or company will have the ability to manipulate it at will.
It will become the new “Golden Straitjacket” (Tom Friedman’s term) of 21st Century economics.
Let me tell you a story, which was told to me by the late Tom Hoobyar. Tom was a Silicon Valley CEO of a biotech firm. I forget whether Tom was actually at this meeting, or if one of his friends told him this story.
But in the early 1990s the Joint Chiefs of Staff invited a bunch of Silicon Valley Nerds to Washington DC to give them a briefing on the Internet.
“Please explain to us what this technology is and what it means,” they said.
The first meeting was dinner. The nerds and geeks were intimidated. They straightened their ties and ate their potatoes and steaks and had polite conversation, but the next morning the geeks were still very nervous.
“Are we going to tell them?” was the question.
“Are we really going to tell them the implications of this?”
Finally they decided they had no choice. They appointed the boldest member of the group to drop the bomb.
After breakfast, a guy stood up in front of all the 5-Star Generals and said, “OK, I’m just going to say it:
“If you can’t control guns, drugs and illegal aliens, there’s no f***ing way you’re going to control ones and zeroes.”
The head of the Joint Chefs of Staff said:
“Yeah, that’s kinda what we thought.”
So… how do you transition from government-controlled money to de-centralized virtual money?
I have no idea. Sounds like a rough voyage to me. But the transition is inevitable.
As John Paul Mendocha says, the Internet is a serial killer. And you never know who it’s going to take out next.
And know this: What we’re experiencing NOW is a bubble. The true revolution will happen after the devastation.
In the long run – after this season of extreme volatility – Bitcoin will be vastlymore valuable than it is now.
Only the patient and wise will accumulate the wealth. All others will be gutted by greed and short-term thinking.
Sleep with one eye open.
Digital Marketing & Tech Leader
Perry Marshall is one of the world’s most expensive and sought-after business consultants. He’s endorsed by FORBES, INC Magazine, and the most respected entrepreneurs in the world. Clients seek his ability to integrate engineering, sales, art and psychology.
He founded the the $5 million Evolution 2.0 Prize, with judges from Harvard, Oxford and MIT. The prize aims to solve the biggest mystery in biology.
He launched two movements in modern marketing. His Google AdWords books laid the foundations for the $100 billion Pay Per Click industry, and techniques he pioneered are standard best practices.
This article originally appeared on Perry Marshall’s blog, here.
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