A Very Crypto Christmas
Beer, barbie and a captive audience – there’s no better time of year to get chatting about crypto. Here’s how to broach the subject.
You know it’s coming. There you are, sitting around the dinner table on Christmas Day, trying to find common ground with a cousin you haven’t seen in years while you consume your own bodyweight in ham. There’s a lull in conversation and Uncle Oswald (or some other similarly baffling family extension) turns to you and says, “So, are you still into those, what do you call them, bitcoins?” Everyone turns in your direction, eyes expectant. So, how do you sum up the year that was? How do you get people PUMPED about crypto?
Bitcoin wins 2019
Well, let’s start with the topline: even now, after all these months of downtrend, bitcoin is the best performing asset of 2019. The All Ordinaries are up about 20%, the S&P 500 35%. Gold, the supposed go-to for these uncertain times, is up 13%. And bitcoin? 105%. If you’d parked some cash in bitcoin on January 1 and just let it roll you would have literally doubled your money.
Not just drugs anymore!
To Uncle Oswald and his ilk, bitcoin (and by extension every cryptocurrency) is probably still that thing that degenerates use to buy drugs online. But this year, perhaps more than any other to date, has been the year that blockchain technology started roaring into the mainstream. China declared that blockchain development was a matter of national priority, the number of active bitcoin addresses just hit an all-time high and German banks, those bastions of fiscal propriety, have been given the go-ahead to buy and hold digital currencies. Facebook, population 2.45 billion, announced that it was going to create its own cryptocurrency, while business analysts Gartner declared that blockchain will be “transformational” for most industries within 5-10 years. It’s still early days for sure, but with every day that goes by this technology looks less and less like it’s about to disappear.
Give the gift of BTC
Once you’re done giving your spiel – by this point, I imagine that people will already be banging the table, cheering and chanting your name – take it home by dishing out some actual bitcoin, Oprah-style. The best way of making this weird abstraction real for people is to give them some skin in the game: even $30 will make most people pay attention. All you need to do is buy some bitcoin (we know a place), create a paper wallet and send it across. Add in some fun festive wallet design and you’ll wonder why you haven’t been doing this for years.
One more thing…
We’ve written before about how millennials are crypto’s most enthusiastic adopters, but a further reminder was delivered this week when US investment house Charles Schwab released a report on the varying retirement portfolios of millenials, Gen X and Baby Boomers. Amazon and Apple topped all three groups, but what really captured our attention was the fact that for millenials bitcoin (or more specifically the Grayscale Bitcoin Trust) ranked fifth – ahead of Ali Baba, Microsoft, Disney and even Warren Buffet’s legendary investment fund, Berkshire Hathaway. Now all we need is to get some of that sweet capital the ol’ Baby Boomers are hoarding – they currently own more than 55% of all the wealth in America – and we can really make this thing fly.
There’s a lot of talk about staking rewards at the moment. What does this mean and how can I get me some?
When Ethereum first launched in 2015 it set out a road map for its future that culminated in a transition from a mining-based proof-of-work system (a la bitcoin) to something known as proof-of-stake. First implemented by Peercoin in 2012, in proof-of-stake systems verification and block rewards are based not on hashing power but on how much of the actual currency people are willing to “stake”. The more currency you have, the more chance you have of verifying a block and receiving rewards.
Ethereum’s plans for the transition has been delayed many times – new goal: sometime in 2021 – but many coins have already adopted some form of staking, including top 20 coins like Tezos, Cosmos, Tron and NEO. Annual returns vary from coin to coin, but generally range from 3-12%. While great in theory, you have to remember that these rewards are being paid out in the same currency. If the currency tumbles by 95% (as most did during the 2018 bear market) then your actual windfall stands to be much lower. Still, if you’re in it for the long haul, there’s worse places to park your coins while you wait for the moon mission to kick-off.
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