Land Banking on Planet Bitcoin
Oh the irony. The purchasing and holding of bitcoins is like land banking on the virtual planet of Bitcoin. Investments are being made in Bitcoin land in the hope that someone will come along and do something with the land that justifies the current price. While there’s no deception – buyers are not being sold prime Californian real estate, yet receiving Florida swap – the illusion is that there’s a finite amount of cryptocurrency land. It’s virtual, so of course there is not. Gavin Andresen and the small group running the big mining pools could decide that, in the interests of mining stability, they’re going to stop reducing the number of Bitcoin acres given as a block reward on planet Bitcoin. If it were to remain fixed indefinitely, or even go up, plant Bitcoin would become unbounded in size.
Then, there’s planet Litecoin, planet PPCoin, planet Feathercoin, planet Dogecoin… and, in an effort that even the Magratheans would be proud of, planet Coinye West is under construction. In fact, an unlimited number of planets. And, being virtual planets, there’s no light-years journey to get from one to the other. BitPay unwisely chose the ‘bit’ part of Bitcoin. Coinbase more sensibly chose the ‘coin’ part. Either way, once you’ve invested in the hardware, software and staff to handle bitcoins, the extra cost needed to handle an altcoin is minimal. The cost of handling any number of altcoins is minimal. The only exception would be if these start ups decide that, to ensure they have a say in the future direction of any cryptocurrency, they’re going to need to pour a good chunk of their venture capital into mining hardware.