In recent months the virtual currency has touched a value never seen in its 12 years of history. We talked about it with Jason Hsu, co-founder of KryptoGO USA, the company that provide affordable and lightweight KYC/AML Solutions.
A new computer protocol, the true nature of Bitcoins :
Buying a pizza in Bitcoin is not like swiping an electronic card and making a digital payment. Bitcoin is more like a computer protocol, like that Internet Portocol (IP) that we use to connect to the internet and that leaves an indelible trace of our passage on the web. Explaining this is Jason Hsu, one of the entrepreneurs who co-founded KryptoGO USA, the company that gave birth to the KYC/AML Solutions in the US.
“Bitcoins behave like bitcoins. We have been in this market for a long time and what is happening is absolutely predictable,” explains Jason . The rising cost in the market for this currency would be due to a renewed interest in Bitcoin. Investment funds have started to set their eyes on the cryptocurrency: “At this moment, institutional investors are also interested in Bitcoin, so it is normal that there is more demand. Such a swing at the moment doesn’t make a big difference. There will be a drop to rebalance it.”
Unlike the currencies we know, the value of Bitcoin is not determined by a central entity. There is no bank that may one day decide to depreciate it. And in the same way the number of Bitcoins existing in the world is predictable because it is already decided by the protocol that regulates them. So there is no risk of inflation. Their value, or rather, their value compared to other currencies changes only with the mechanism of supply and demand. Exactly as if it were a precious good. The more you look for it, the more it increases in value. The asset itself remains as such. “Bitcoins are an expression of a cryptoanarchical movement,” Jason explains. “They are part of a more complex vision that creates an alternative system to traditional money and banking.”
Once the underlying mechanism has been clarified (or at least made less obscure), one question remains: is it possible to use this cryptocurrency for everyday trading? The risk of such a high volatility is in fact that it follows the logic of the financial market. In this sense, Bitcoin could be treated like a pack of stocks, sold and bought according to its fluctuations. To better understand the dimensions of this process there is a discreetly amusing anecdote.
Domino’s Pizza examples :
On May 22, 2010, tal Laszlo Hanyecz bought two pizzas from the Domino’s chain for 10 thousand Bitcoins, which at the time could be exchanged for $43. Every year, every May 22, Bitcoin Pizza Day is celebrated in which it is calculated how many pizzas could be bought with the same number of Bitcoins in the current valuation. In 2019 here, 10,000 Bitcoins would have allowed Laszlo to buy 300,000 pizzas, enough to eat for lunch and dinner for the next 4,109 years. And there would still be some left over to offer to friends.
Jason Hsu explains , “There are two types of merchants who accept Bitcoin: those who immediately convert the Bitcoins they receive into euros and those who keep them. Those who convert Bitcoins immediately don’t lose anything, those who instead keep them, as you can see from the trend, for now are increasingly happy. Of course, it’s not as if everyone here doesn’t pay in Bitcoin.”
Time to invest? Maybe, but better to always be careful
Obviously in front of such a coin the temptation to invest in a currency that in ten years has seen its value grow so much is strong. But this is not the advice of those who have been working with Bitcoins for years. Or rather, it is not entirely: “My suggestion – explains Jason – is not to invest money but to invest time. Study how this cryptocurrency works, what are its deep mechanisms and above all what philosophy is behind it. Of course, if you are then full of money, then you can invest those too”.
Follow Jason on Instagram