Bitcoin Archives - Frugaling

Is Bitcoin the next economic bubble?

Is Bitcoin the next economic bubble? That seems like a valid question, as the price of the cryptocurrency has soared to unprecedented levels over the past few months.

Just this spring, Bitcoin traded around $5,000, and it has now gone past $15,000. Who wouldn’t like to triple their money in less than a year? But like any investment, the risks are correlated to potential rewards. And crypto is extremely risky. Many people have lost thousands just because they didn’t understand the concept of blockchain, how crypto works, or simply because they forgot to securely store their coins!

That is pretty frustrating, and you should really understand the basics of Bitcoin before you decide if this is an investment you should get into. Otherwise, you may lose money. As governments are trying to work on ways to regulate crypto currencies, right now, there are not guarantees for your money. No central bank to back it up, no recovery for your lost credentials. Still curious? Crypto has a lot of advantages, and can be a great way to diversify your portfolio.

As it is too early to tell whether we are experiencing a Bitcoin bubble or not, lets remember the previous bubbles of economic history. The Dotcom and US property bubbles are just a few years away. They hit pretty hard and many investors saw their savings reduced to nothing in a matter of months.

Want more information? Enjoy this infographic on economic bubbles, courtesy of ETX Capital

bubble

Why Google Wallet Needed To Release An Offline Debit Card

By Frugaling 4 Comments

Last week, I wrote an article bringing attention to the Google Wallet Card. This decision to print and give away a free debit card will usher in a new epoch of payments, banking, and budgeting. But when I finished writing the story, I realized there was a missing piece to all of the current press: Why did Google release an offline debit card in the first place?

Google Wallet was announced in 2011, and released as a smartphone app in September of that year. After over two years of development and company expenditures, critics suggest the experiment has failed:

…Google Wallet is a dud, at least to date, despite the company’s expenditure of an estimated $300 million in real money on its development… (USAToday)

Earlier this year, rumors began swirling that Google would be releasing a physical debit card to be paired with its Wallet service. Unfortunately, ahead of the company’s major press event, Google I/O, they scrapped the release and went back to the drawing board. Despite being considered a “dud” by some analysts, Google Wallet was already beginning to catch on – largely credited to the payment processing of Android apps and Google Play purchases.

Google is already sucking in that purchase data on many fronts — between Google Play payments, Google Checkout on the Web and also advertiser payments — in addition to the dedicated Google Wallet project. (AllThingsD)

On November 20, 2013, Google decided to follow through with the release of a physical debit card (issued with a Mastercard logo). Commentators and speculators suggest that the Google Wallet platform needed to increase users’ payment options. As much of what we buy in stores takes a physical swipe of a card, these stories suggest that the debit card would help pay for physical goods. But tech writers have questioned Google’s decision to enter the physical world:

It’s surprising because Google exists to get people off physical media and into virtual digital everything. They’ve also been a leading force in mobile payments with both Android and Google Wallet. (ComputerWorld)

The persistence of plastic suggests we’re a lot farther than we think from a world where true mobile payments are the norm. (Washington Post)

Thus far, the primary hypothesis seems to center on the idea that Google has admitted to the failure of its online-only payment platform – it’s kowtowing to the payment processing gods and issuing a physical card. These articles and writers don’t give enough credit to this decision or Google’s business acumen. The company is in the payment processing business for the long haul. Much like their advertising platform, which is considered to be the best ad system in the world, payments give vital details about user habits, transactions, and life outside Google. There’s money in that big data and Google is about to start drilling.

With the release of a debit card, Google Wallet is not admitting defeat nor is it suggesting we have a “lot” further to go before mobile payments become the norm. Rather, the Wallet platform is injecting itself into the current psychological modality for purchasing goods for evolution down the road. Users of the product will begin to natively track and spend via the online platform. This will likely cause people to start defaulting to this payment system.

Meanwhile, Google has laid a diverse framework and future for the payment system by interlinking it with Gmail, Google+, and a growing number of online services. Now, you can send money via Gmail, swipe for gas, and receive a payment – instantly and securely. But Google needed a card to segue purchasers to this mobile platform. Eventually, when people are convinced that the online, digital model works better than physical, debit card swipes, Google will win.

Every recent service Google has announced has required a segue from the search model. From Drive to Plus to Wallet, these services have been built-in to a diverse set of products. Drive is now caked into Gmail attachments. Plus is a necessity for YouTube comments. And now, Wallet… Necessary for Google Play purchases and about to grow into another multi-billion dollar industry for Google. Making a physical card was just another segue for Google to make users’ switch to a mobile payment model more seamless.

An era of mobile payments is nearly here. In the next 4 to 5 years, we’ll likely see a massive switch to digital payments. Just like the banking industry today, there will be multiple players and competition. The major difference will be that tech behemoths will compete directly with big banks. What’s clear is that the players that can create a natural blend of on and offline payments now will win later.

Bitcoin: The Truest Altruism?

By Frugaling 2 Comments

A few years ago, I founded a scholarship in suicide prevention. For the efforts, a permanent endowment awards undergraduates that are looking to prevent suicides and dedicate their lives to helping others. But I always wondered what would happen if it was anonymous, privatized, and fee-less. Would people give?

That’s My Name

My name will forever be attached to the endowment. Part of me is proud, and the other part is embarrassed. The scholarship has opened doors for me that I never thought I’d walk through. I’ve followed dreams and seen my life open up before my eyes.

But my name is irrelevant. It’s not about me; rather, for everyone that could benefit from funds. Part of me wonders how the scholarship could’ve benefited from a nameless founder and private, inspired donations. Suicide prevention and fundraising is bigger than me. Now, there’s a way.

A $1 Tip

A couple weeks ago I wrote a story about Bitcoin. I included a link to support me via this burgeoning cryptocurrency (read more about how it works). In the first couple hours of the story’s publication, I received a $1 (0.01 BTC) donation.

The first thing I wanted to do was learn about the person. How could I thank them? How could I ask them why they decided to support me?

As I looked at the receipt, I only saw a series of numbers and letters. Like the code above this story, it was nameless. There wasn’t somebody to thank, ask, or inquire about the tip. Likewise, that person wasn’t asking for acknowledgement, either. I had stumbled upon something truly altruistic.

Altruism’s Existence

There’s a hearty debate over the existence of altruism. Some say it’s impossible, and that you inherently benefit by giving. When ExxonMobil plasters its name over the side of a research building at a university, they’re benefiting from that money. When I raised that money and started the scholarship, I benefited (in more ways than I could ever expect). Likely, it was the single greatest reason for my entrance to graduate school.

Suddenly, as I looked at that nameless, private, obscure code, I reveled in the altruism. Here was somebody that consciously gave without expectation or assumption of something, anything in return. Literally, I had no recourse to thank them.

While they could have felt a sense of pride in giving, this may be the most benign benefit to the giver. Could Bitcoin actually be the most altruistic form of giving?

Bitcoin’s Private Start

Bitcoin was founded by a pseudonymous group/individual entitled, “Satoshi Nakamoto.” Since the beginning, the cryptocurrency’s founder(s) stayed entirely private and unknown. Lengthy investigations by respectable news outlets have come up dry (article 1, article 2, article 3). All they have is speculation.

People continue to question, “Who is Satoshi Nakamoto?”

In the truest, most genuine, and altruistic creation, the founder of this $1.1 billion currency remains unknown and its users are nameless. Everything about Bitcoin has been designed to match the privacy of a cash-based transaction and surpass the security of a credit card.

A Private Future

From a highly-secured beginning to a powerful currency that can buy nearly anything, Bitcoin is catching on. We have long lived in a world where giving was associated with tax deductions, names, and credit.

With Bitcoin, there’s a brighter, better future. This is one where true altruism exists. Where somebody can surprise another, give generously, donate to a special non-profit, or change someone’s life – all while remaining a quiet, nameless figure.

Is Bitcoin the next economic bubble?

Why Google Wallet Needed To Release An Offline Debit Card