Who is Vitalik and why should you be like him?
Vitalik Buterin immigrated to Canada as a child and first learned about Bitcoin at age 17 from his father. His crypto journey started when he began writing for a small publication called Bitcoin Weekly. He was paid five bitcoins (around $3.50 back then) for each article.
Like most of us, Vitalik wasn’t born into a wealthy family or have incredible opportunities. However, he invested his time and energy in what he believed would be the future. He dropped out of college and invested most of his savings in Ethereum (Ether), the second-largest cryptocurrency. His investment paid off. At 27 years old, Vitalik owned more than 330,000 Ether, which according to Forbes was worth around $360 million.1
Vitalik had no secret recipe for success, and you don’t need one either. So, what do you want your future to look like?
Invest in Your Future with Cryptocurrency
Just a few short years ago, people laughed at those investing in cryptocurrencies. Recently, Elon Musk announced that Tesla invested $1.5 billion in Bitcoin. The cryptocurrency surged over 25% to all-time highs, reaching a valuation of $43,000.
Young people need to grasp their economic potential by investing in cryptocurrencies.
Historically, young people were locked out of the ability to generate any form of wealth. For example, those born after 1981 control just 6.2% of U.S. wealth according to the Federal Reserve.2 However, the high growth potential of cryptocurrencies can enable young people with an appetite for risk to control more wealth and become financially independent while building the future. Are you ready to invest?
Cryptocurrencies Increase in Value
Cryptocurrencies are going to pay off for investors because they achieve widespread adoption. Financial giants such as PayPal and Square make it easier for average people to purchase crypto. Major corporations such as MicroStrategy, Square, and Tesla have invested billions into Bitcoin and other cryptocurrencies.3
Cryptocurrencies will become part of everyday life simply because they are more efficient.
Crypto coins can be transferred rapidly without bank or foreign exchange fees, saving an estimated $165 billion in fees annually.4 Additionally, low cost transferability enables companies to lower operating expenses (in countries with a low volume of transaction) and employ more of the 200 million unemployed people in these countries.4
Furthermore, cryptocurrencies create new economic potential. For example, Ether allows the use of smart contracts, which are written in code and can be executed automatically and making the transactions safer, more reliable, and less expensive (no more lawyers!).5
As a result, these technologies have the potential to disrupt massive industries, such as banking and real estate, as well as fully tapping the economic potential of the society they serve. Don’t miss out on this opportunity!
Big Wins Offset Small Loss
Cryptocurrencies and blockchain technology are cutting edge. Buying cryptocurrencies, with the exception of Bitcoin, is very much early-stage investing. The outcomes are similar to venture-capital investing in that only a small number of investments will be highly profitable. However, the big wins from profitable investments will offset any loss and generate huge profits.
Blockchain technology is safe! The blockchain technology that powers most cryptocurrencies uses very advanced cryptography techniques. As a result, most cryptocurrencies provide great protection from hacking or theft.6 Despite past cyber-attacks, most exchanges and storage options are safe. In fact, cold storage is so safe that Stefan Thomas is unable to access his $220 million fortune because he forgot his password!7
Regulations aren’t a problem for cryptocurrencies. Since the global crypto market cap has surpassed one trillion dollars, regulators are more inclined to act. Unfavorable regulations can impact the performance of cryptocurrencies. However, until now, few countries have banned cryptocurrencies completely, and many countries such as Canada and Switzerland recognize cryptocurrencies as a legal form of payment.8
Despite the uncertainty, regulators are unlikely to stop the blockchain expansion because cryptocurrencies are decentralized by nature. For instance, China has banned initial coin offerings completely, but Chinese investors can still take part in initial coin offerings through foreign exchanges.
Cryptocurrency: A Safe Haven Asset
While Bitcoin is many times associated with commodities such as gold and silver, they have very little in common. Unlike fiat currencies such as the U.S. dollar printed at the will of politicians, Bitcoin has a limited supply of 21 million coins.
Bitcoin is also a hedge against unfavorable economic conditions based on a study conducted at the Poznan University of Economics and Business. Bitcoin is a safe haven asset in crisis-driven Venezuela and enables millions to preserve their lifelong savings from extreme inflation. In countries like Japan and China, Bitcoin is used as a diversifier.9 Thus, investors view Bitcoin as a long-term investment that will increase in value against fiat currencies that depreciate due to inflation.
Now Is the Time to Invest in Cryptocurrencies
Of course, investing in cryptocurrencies is not for everyone. As digital natives, young people have inherent advantages in understanding and investing in cryptocurrencies.
Young people are comfortable with technology. They have time to see their investment materialize, and the risk-reward ratio is much greater for them. Take the advice of billionaire Reid Hofmann: “You have to be constantly investing in the future.”10 The future is as unpredictable as it is inevitable, but you have the opportunity to be part of it. Be like Vitalik and Reid and invest in cryptocurrencies now.
- Castillo, Michael. “Bitcoin’s Recent Surge Creates New Billionaires.” Forbes. Forbes Magazine, January 15, 2021. https://www.forbes.com/sites/michaeldelcastillo/2021/01/11/bitcoins-recent-surge-creates-new-billionaires/?sh=19194e98416c.
- The Fed. “Table: Distribution of Household Wealth in the U.S. since 1989.” Board of Governors of the Federal Reserve System. Accessed March 5, 2021. https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/table/#quarter:119;series:Net%20worth;demographic:age;population:all;units:shares.
- Stank, Kevin. “Square Saw 1 Million Users Buy Bitcoin for First Time during January’s Upswing, CFO Says.” CNBC. CNBC, February 24, 2021. https://www.cnbc.com/2021/02/24/square-saw-1-million-users-buy-bitcoin-for-first-time-in-january-cfo.html.
- Jacobs, Garry. “Cryptocurrencies & the Challenge of Global Governance.” Cadmus 3, no. 4 (May 2018).
- Tenebruso, Joe. “Is Cryptocurrency a Good Investment?” The Motley Fool. The Motley Fool, November 13, 2020. https://www.fool.com/investing/stock-market/market-sectors/financials/blockchain-stocks/is-cryptocurrency-good-investment/.
- Hughes, Sarah J. “Do Blockchain Technologies Make Us Safer? Do Cryptocurrencies Necessarily Make Us Less Safe?” Texas International Law Journal 55, no. 3 (January 2020).
- Popper, Nathaniel. “Lost Passwords Lock Millionaires Out of Their Bitcoin Fortunes.” The New York Times. The New York Times, January 12, 2021. https://www.nytimes.com/2021/01/12/technology/bitcoin-passwords-wallets-fortunes.html.
- Trautman, Lawrence J. “Bitcoin, Virtual Currencies, and the Struggle of Law and Regulation to Keep Pace.” Marquette Law Review, September 2018.
- Kliber, Agata, Paweł Marszałek, Ida Musiałkowska, and Katarzyna Świerczyńska. “Bitcoin: Safe Haven, Hedge or Diversifier? Perception of Bitcoin in the Context of a Country’s Economic Situation — A Stochastic Volatility Approach.” Physica A: Statistical Mechanics and its Applications 524 (2019): 246–57. https://doi.org/10.1016/j.physa.2019.04.145.
- Hoffman, Reid. The Start-up of You: Adapt to the Future, Invest in Yourself, and Transform Your Career. Edited by Ben Casnocha. London: Random House Business Books, 2013.