Bitcoins and cryptocurrency, in general, have been in the news a lot lately. Sadly, a lot of these news is often negative news. We know that bitcoins are used to buy illegal pornography like child pornography. It’s also used to buy illegal drugs online. Increasingly, bitcoins have been associated with illegal online activity. Be that as it may, bitcoins appeal to a lot of people because it truly is one of the forms of currency that you can use that the government cannot reach. If you want to have an income stream that cannot be tracked, cannot be pinned by the government and has a value that is divorced from the official pronouncement of world governments, the bitcoin is it. It is its own reality of value.
As much as the bad news about bitcoin and its bad associations keep rolling in, there is one piece of good news. This piece of good news takes the form of a tragedy. There is a Welshman named James Howells, he bought 7500 units of bitcoins back in the year 2009. He bought it for less than 6 dollars. In today’s valuation, those bitcoins are worth 7.5 million dollars. This is where the story becomes tragic. He threw away those bitcoins when he put his old hard drive in the trash. Remember, bitcoins are digital currency. Nobody else can access them but you and they have string code so these codes only belong to you and if you’re ready to sell it then you send the code to somebody else. Once they’re gone, you cannot replace them and that’s what Howells found the hard way. That’s why he’s reported to be sifting through a landfill in Great Britain trying to find his hard drive. Good luck with that Mr. Howells.
Regardless, this sad story thus serve to highlight one piece of good news. The bitcoin is not replaceable. People can create bitcoins by running a certain computer program and after enough processing your computer will produce one bitcoin. The good news is that, the program can only produce 21 million bitcoins, once that figure has been reached it stops. So, we don’t know yet if the bitcoin mining for the software has already reached its limit. However, the 7500 bitcoin units that Mr. Howells threw away will not come back to him unless he finds that harddrive. This is good news. Why? when all 21 millions of bitcoin units are mined, this means that there is a fix number of units all over the world. Eventually, people will screw up like Mr Howells by throwing away equipment that had there bitcoin code in it. More importantly, people will either forget, people will die, and nobody knew that they had bitcoins and many other situations where bitcoins are lost. Every time 1 bitcoin is erased from the global market of bitcoins, the value of bitcoins go up. So, if you are a gambling person and you want to invest in something that is sure to go up in the future, just by sheer attrition, you might want to give bitcoins and other hot cryptocurrencies a shot because their supplies not going up. And thanks to human misfortune and just bad luck, it surely will continue to go down.
One big source of bitcoin supplies being dessimated, illegal raids on websites. Since as we’ve mentioned earlier, bitcoins are often use to pay for illegal transactions. If these exchanges get raided, a lot of the times the bitcoins held in escrow disappear or it get erased by the owners of the platforms. So, if there are enough of these raids in the future, the pool of bitcoins in circulation keeps shrinking and shrinking. Personally, I would not be surprised to see bitcoins hit 5000, 10000, or even a 100,000 dollars per bitcoin if the conditions are right in the future. Of course, we’re not hoping that bad things happen to people so the bitcoins disappear, we’re just pointing out market reality. In any market when the supply is low and the demand is huge the price goes up. This is not rocket science folks.