Sunday, December 15, 2013
I Have One Word For You...
One of the biggest and best movies of the Sixties is "The Graduate." In it, Dustin Hoffman plays Benjamin, a young man leaving college. Benjamin is bewildered about what to do next with his life. During a conversation with an older businessman, Benjamin is given a cryptic message. The man, trying to steer Benjamin into emerging technology, says, "I have one word for you, Benjamin -- plastics."
Plastics. Benjamin makes no sense of the word. But there was a truth to it.
Each period has its transformative technology. In the Seventies, plastics revolutionized consumer products. What we bought was no longer made of wood and natural materials; products were made from molded plastics. I remember televisions made out of wood and metal; now, there are none.
I always have my ear to the ground. Listening carefully, I pick up on new technologies and social events before many other people. Let me tell you about what's going to happen next in our world.
In the Eighties, the one word was "computers". Before then, nobody even imagined owning a computer, let alone relying on one. You lived in an analog world and did everything on paper or in person.
In the Nineties, the "Internet" emerged and exploded. That technology transformed our lives.
In the Aughts (2000-2010), the word was "Facebook" (meaning social media in general).
In the Teens (2010-2019), the word is...
Are you listening? Like Benjamin, what you're about to hear will confuse you. Most of you will have never heard this word. But it has existed for four years and its explosion in 2013 was the biggest financial story of the year.
The word is "Bitcoin".
In a few years (3-5), you will be using Bitcoin to store value and buy things. In a decade, you'll look back and wish you'd listened to Ally when she mentioned this on her blog. Although Bitcoin is not designed as an investment, it can function as one. The value of Bitcoin holdings fluctuates -- and its meteoric rise in 2013 was the biggest financial story of the year.
The value of Bitcoin rose from $15 in January to over $1,200 in December. It's moving wildly at this time but to get a sense of this growth, realize that if you'd owned a mere $1,000 of bitcoins at the beginning of the year, you'd be a millionaire right now. Wow.
Bitcoin can (and I predict will) shake up society. It has many attractive features that are tailor-made to our developing digital economy. The U.S. Senate held hearings on Bitcoin this month and, apart from widespread confusion among senators, not a bad word was said about the technology. That lack of criticism (and possible regulatory control) has hugely emboldened many to invest in Bitcoin. A prominent venture capital firm just put $25 Million into Coinbase, a San Francisco company which will make buying and selling Bitcoins easy.
Years from now, I'll remind you of this post...