Bitcoin May Not Be a Success, But It Could Be Opening Up Huge Opportunities

Money is the New Matrix

Apr 13, 2014 at 7:12AM

Source: Flickr / btckeychain.

In an incredibly short amount of time, bitcoin has gone from a little known, oddly-named niche curiosity to the hot topic that has dominated financial news feeds. With so much popularity, it's only natural that companies like JPMorgan Chase (NYSE:JPM) and Fortress Investment Group (NYSE:FIG) are looking to capitalize on this with their own branded flavors of bitcoin. Two big questions remain, however: is the crypto-currency fad for real, and is there room for more than one?

Money out of Nothing
Bitcoin is created or 'mined' by solving a very complicated algorithm, using vast CPU power usually through a network. Creating a bitcoin is called mining. Anyone can download the free software and start the  process of solving a complicated mathematical problem that gives a unique digital signature. Each time a bitcoin is used, the transaction is then recorded in a public ledger as a 'blockchain'. 

The 'blockchain' is a proof of each bitcoin's unique life. What makes this powerful is that it's impossible to counterfeit, as one will have to replicate the record of every transaction by a particular bitcoin since its creation. This chain is built into the each exchange, making each bitcoin unique, autonomous and accountable. For two Bitcoins to be identical they would have to share the same history, which is computationally impossible.

Crypto-currency could change the future of digital money. As a value based system of exchange, bitcoin as a virtual currency has proven itself. Unfortunately, its future may depend upon the politics surrounding it rather than the mathematics or the genius of it.

Room for more?
JP Morgan has filed for a patent for its own crypto-currency as it opens up the opportunity to simplify complicated accounting procedures. Fortress, on the other hand, recently invested in Pantera bitcoin, one of the largest exchanges, with the idea that bitcoin and other virtual currencies can become the new payment norm.

Marc Andreessen of Andreessen Horowitz, calls it fake mathematical currency. But his Venture Capital firm has invested $50 million in bitcoin. To him, it offers a solution, as it could become a convenient type of currency through avoiding the costs of using a credit card or a banking system to pay your bills.

Time is Money
Bitcoin is a quick and secure way of exchanging value between two parties. I think it could survive long into the future because it is providing a solution to a problem in the financial system. It is secure by itself, but it is currently unregulated -- and thus worrying to the investor. I believe the service a bitcoin provides is far greater than the problems surrounding it. As virtual cash, it is a useful and secure system and hopefully in the future it can garner the attention of financial institutions and governments to make it more reliable and safe for every user.

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

The writer does not own any stocks whatsoever.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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