There’s been a lot of press lately about the awesomeness of Bitcoin.
How Bitcoin is going to revolutionize the money system, and how this one currency is void of any possibility for corruption.
First, let’s circle back to what money really is — a visual representation of barter. Instead of exchanging two chickens for a cow, people just put a dollar price on the two chickens and a dollar price on the cow. If you don’t have two chickens for trade, you can still get a cow as long as you have the dollars.
It’s all about putting a value on the dollar — and some dollars are valued higher than others, which is where we get unique exchange rates for different currencies around the world.
Bitcoin is no different — there is a price fluctuation as people convert US dollars into Bitcoin. Sometimes Bitcoins are worth just $400, while at other times you could buy a Bitcoin for $800. There’s no rhyme or reason, it’s just demand. How much is owning a Bitcoin worth it to you? How much do you want to gamble that Bitcoins will go up in value versus other investments you could make?
Or are Bitcoins the ultimate Beanie Baby, just waiting for the market to collapse?
Let’s look at some Bitcoin numbers — which you can do by poking your head over at the BITCOIN RICH LIST. With Bitcoin, as with practically any other rare investment opportunity, the early adopters are the ones making the most money.
According to the Bitcoin Rich List — there are 2 people who own a little more than 2% of all Bitcoins that have been identified.
There are 94 people who have control over 19% of all Bitcoins.
And there are about 1300 people who have another 25%.
If our math is right — this means that out of the 22 million people who have any Bitcoins in their Bitcoin bank accounts, about 1500 people total control about half of all Bitcoins that are in circulation.
Look at it the other way? 21.4 million people share around 140 of all Bitcoins that have been identified (as of this writing, anyway) of the 12 million Bitcoins in existence.
That’s not a whole hell of a lot. And it leaves a lot of the Bitcoin profit in the hands of a very few amount of people. And with more and more folks jumping onto the Bitcoin bandwagon, the chances of anyone new making a profit at Bitcoin are going to be few and far between.
So do yourself a favor and avoid the entire Bitcoin revolution. Your wallet (and retirement account) will thank you later.