The big gamble with the Bitcoin hype
Here, Bitcoins, the next big thing! Anyone who entered years ago belongs to a new generation of millionaires. About a completely crazy market and the old power of greed.
On a hot Florida day, Marie sits in the lobby of an apartment complex as a man approaches. She does not know who he is, she does not know yet how lucky he will be. Only years later will she realize how this encounter has changed her life forever. Marie is still young at that time, in the year 2011, she has passed her high school diploma with top marks and during her studies she started to work for a german corporation. Her first professional USA trips, the first bonus of her life, she deserves well, a little play money, what the hell.
Marie has every reason to distrust the man. He prides himself on being one of the biggest porn producers in the US, he talks a lot. But in the end she lets herself in for a tip. He picks up his tablet and shows her something that she has heard of once: Here, Bitcoin, that's the next big thing! It does not believe it, the digital currency Bitcoin, which at the time was something for criminals in the dark spheres of the Internet, or just for porn producers. But she has play money, calls her cousin, he also has some. Together, they buy bitcoins for 14,000 euros, for less than a dollar a piece.
Traditional finance industry fuels Bitcoin hype
What was at the time an issue for the digital avant-garde has become a global madness. The growth in value of the first and most famous digital currency dwarfs much of the history of speculative bubbles so far. A year ago, a Bitcoin cost about $ 750, this week, the price rose at times to more than $ 11 000, an increase of over 1400 percent for a known as "currency" system whose justified value no one knows, as a means of payment It is hardly to be used and its price fluctuates enormously.
Now even the traditional financial industry is fueling the hype. Banks invest products that allow investors to invest in bitcoins, stock market operators want to offer bitcoin derivatives, and masses of savers in Asia, America, and Europe see aggressive advertising: invest now! Bitcoin has made it out of a shady niche on the front pages of the world financial press, celebrities like Goldman Sachs boss Lloyd Blankfein talk about it, warn central bankers, fund managers smell the big business. In the spell of the price jumps even inexperienced savers enter and put their modest fortune on the line. Welcome to the Global Crypto-Casino.
In this madness is also the reason why Marie is really different than here, why she absolutely wants to remain unrecognized. Almost nobody around her knows about her Bitcoins, not her friends, not her partner, until a few weeks ago, not even her parents, to whom she maintains a very familiar relationship. The Bitcoins are to remain their big secret, the many millions in their account, which have become the hot tip six years ago. "For a long time I forgot that I had invested at all," she says. Until one day her cousin phoned and she first had to learn to understand that she became a millionaire with 7,000 gullible euros.
"Bitcoin is the first true success story of Blockchain."
Fortune-teller stories such as Marie's give access to the visions that a group of unknown programmers used to develop the foundations of the crypto-boom almost ten years ago. They created a self-regulating system whose central promise is anarchistic: transfers of funds from user to user without intermediaries, without central bank, far from any state monetary monopoly; a monetary system that exists solely on users' computers and automatically limits the number of bitcoins to 21 million. This shortage serves as an argument to compare Bitcoin with gold and justify the increase in value of virtual coins, of which Bitcoin is just the most expensive and best-known. More than 1300 counterparts have been created. A paradise for cheats.
"Bitcoin is the first true blockchain success story," says Spiros Margaris, a former hedge fund manager from Switzerland who is investing money in financial technology start-ups today and making a name for himself as an expert in the field. "This is the good thing about the boom: it brings technology into conversation, it forces people to engage with these systems." The technology called Blockchain, the heart of all digital currencies: It lets computers in the Bitcoin network combine individual transactions with encryption methods into data blocks that are lined up and stored tamper-proof. It is beginning to come to light that this technology may change a lot in the way the world works today.
Behind the Bitcoin is a whole technology
Because their applications are wide enough. Hardly anybody will find a central bank, hardly an industrial and certainly not a financial concern that does not deal with the blockchain. Philipp Sandner meticulously observes this development. The professor directs the Blockchain Center at the Frankfurt School of Finance and Management and says: "The Internet is still used exclusively to transmit information."
The Blockchain now makes it possible to transmit values electronically - without recourse to an intermediary. The value of cryptocurrencies is therefore much more than just an aberration, a technology that can fundamentally change the way payment and business processes function today, "says Sandner.
Fundamental changes are not yet widely seen by the general public; the current drama is limited to popular speculation, with which people gain or lose a great deal of money within minutes. "I do not believe that cryptocurrencies will replace traditional currencies," says a German financial manager who is convinced that he invests in more than 70 different digital coins and wants to remain anonymous because he works for banks and is no stranger to the scene. "But I am sure that they will find their place, which currency prevails in the end, no one can estimate."
Just as little is foreseeable in which areas the blockchain first prevails. The current phase, he says, reminds him of the early 1990s, when he was busy explaining the Internet to people, many of whom thought that was stupid. If he's right about this comparison, the current Bitcoin boom is just a start. Maybe that's why, like Philipp Sandner, he warns against investing "brainlessly" now. What many are doing, driven by the old power of greed, the fascination of unexpected wealth.
A son no longer speaks to his father: he forced him to sell bitcoins
Every day, it is possible to observe which flowers drive this fascination. The data centers in China and north of the Arctic Circle, which solve complex computing tasks to generate new bitcoins, now consume more energy than the whole of Ireland. One reads of the British, who in the summer disposed of an old computer, on which bitcoins worth nine million dollars were stored, and which searches since then on garbage dumps for its treasure. You hear about the son, who does not talk to his father anymore because he was forced to sell his 125 Bitcoins years ago.
And one morning in late autumn, in a café in a German city, one meets the young mother, Marie, who hides a double-digit million sum. She thinks about it now, she says, whether she should buy a house in town, or rather in the countryside. "I have to and I want to get rid of that now," she says. "I've reached a point where it would really hurt me if that breaks in now." It's people like them who will later tell of a time of digital gold-digging when the world was just beginning to go crazy in a new era.
On a hot Florida day, Marie sits in the lobby of an apartment complex as a man approaches. She does not know who he is, she does not know yet how lucky he will be. Only years later will she realize how this encounter has changed her life forever. Marie is still young at that time, in the year 2011, she has passed her high school diploma with top marks and during her studies she started to work for a german corporation. Her first professional USA trips, the first bonus of her life, she deserves well, a little play money, what the hell.
Marie has every reason to distrust the man. He prides himself on being one of the biggest porn producers in the US, he talks a lot. But in the end she lets herself in for a tip. He picks up his tablet and shows her something that she has heard of once: Here, Bitcoin, that's the next big thing! It does not believe it, the digital currency Bitcoin, which at the time was something for criminals in the dark spheres of the Internet, or just for porn producers. But she has play money, calls her cousin, he also has some. Together, they buy bitcoins for 14,000 euros, for less than a dollar a piece.
Traditional finance industry fuels Bitcoin hype
What was at the time an issue for the digital avant-garde has become a global madness. The growth in value of the first and most famous digital currency dwarfs much of the history of speculative bubbles so far. A year ago, a Bitcoin cost about $ 750, this week, the price rose at times to more than $ 11 000, an increase of over 1400 percent for a known as "currency" system whose justified value no one knows, as a means of payment It is hardly to be used and its price fluctuates enormously.
Now even the traditional financial industry is fueling the hype. Banks invest products that allow investors to invest in bitcoins, stock market operators want to offer bitcoin derivatives, and masses of savers in Asia, America, and Europe see aggressive advertising: invest now! Bitcoin has made it out of a shady niche on the front pages of the world financial press, celebrities like Goldman Sachs boss Lloyd Blankfein talk about it, warn central bankers, fund managers smell the big business. In the spell of the price jumps even inexperienced savers enter and put their modest fortune on the line. Welcome to the Global Crypto-Casino.
In this madness is also the reason why Marie is really different than here, why she absolutely wants to remain unrecognized. Almost nobody around her knows about her Bitcoins, not her friends, not her partner, until a few weeks ago, not even her parents, to whom she maintains a very familiar relationship. The Bitcoins are to remain their big secret, the many millions in their account, which have become the hot tip six years ago. "For a long time I forgot that I had invested at all," she says. Until one day her cousin phoned and she first had to learn to understand that she became a millionaire with 7,000 gullible euros.
"Bitcoin is the first true success story of Blockchain."
Fortune-teller stories such as Marie's give access to the visions that a group of unknown programmers used to develop the foundations of the crypto-boom almost ten years ago. They created a self-regulating system whose central promise is anarchistic: transfers of funds from user to user without intermediaries, without central bank, far from any state monetary monopoly; a monetary system that exists solely on users' computers and automatically limits the number of bitcoins to 21 million. This shortage serves as an argument to compare Bitcoin with gold and justify the increase in value of virtual coins, of which Bitcoin is just the most expensive and best-known. More than 1300 counterparts have been created. A paradise for cheats.
"Bitcoin is the first true blockchain success story," says Spiros Margaris, a former hedge fund manager from Switzerland who is investing money in financial technology start-ups today and making a name for himself as an expert in the field. "This is the good thing about the boom: it brings technology into conversation, it forces people to engage with these systems." The technology called Blockchain, the heart of all digital currencies: It lets computers in the Bitcoin network combine individual transactions with encryption methods into data blocks that are lined up and stored tamper-proof. It is beginning to come to light that this technology may change a lot in the way the world works today.
Behind the Bitcoin is a whole technology
Because their applications are wide enough. Hardly anybody will find a central bank, hardly an industrial and certainly not a financial concern that does not deal with the blockchain. Philipp Sandner meticulously observes this development. The professor directs the Blockchain Center at the Frankfurt School of Finance and Management and says: "The Internet is still used exclusively to transmit information."
The Blockchain now makes it possible to transmit values electronically - without recourse to an intermediary. The value of cryptocurrencies is therefore much more than just an aberration, a technology that can fundamentally change the way payment and business processes function today, "says Sandner.
Fundamental changes are not yet widely seen by the general public; the current drama is limited to popular speculation, with which people gain or lose a great deal of money within minutes. "I do not believe that cryptocurrencies will replace traditional currencies," says a German financial manager who is convinced that he invests in more than 70 different digital coins and wants to remain anonymous because he works for banks and is no stranger to the scene. "But I am sure that they will find their place, which currency prevails in the end, no one can estimate."
Just as little is foreseeable in which areas the blockchain first prevails. The current phase, he says, reminds him of the early 1990s, when he was busy explaining the Internet to people, many of whom thought that was stupid. If he's right about this comparison, the current Bitcoin boom is just a start. Maybe that's why, like Philipp Sandner, he warns against investing "brainlessly" now. What many are doing, driven by the old power of greed, the fascination of unexpected wealth.
A son no longer speaks to his father: he forced him to sell bitcoins
Every day, it is possible to observe which flowers drive this fascination. The data centers in China and north of the Arctic Circle, which solve complex computing tasks to generate new bitcoins, now consume more energy than the whole of Ireland. One reads of the British, who in the summer disposed of an old computer, on which bitcoins worth nine million dollars were stored, and which searches since then on garbage dumps for its treasure. You hear about the son, who does not talk to his father anymore because he was forced to sell his 125 Bitcoins years ago.
And one morning in late autumn, in a café in a German city, one meets the young mother, Marie, who hides a double-digit million sum. She thinks about it now, she says, whether she should buy a house in town, or rather in the countryside. "I have to and I want to get rid of that now," she says. "I've reached a point where it would really hurt me if that breaks in now." It's people like them who will later tell of a time of digital gold-digging when the world was just beginning to go crazy in a new era.
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