Bitcoin has just gone up to $2,000 per bitcoin, the all-time high! In this video, Luke talks with Joby Weeks who is a bitcoin miner and entrepreneur about how this happened, some of the pitfalls that could occur, and an important lesson about how to avoid losing money because of hackers. Joby is part of a mining club called BitClub which is one of the top 10 bitcoin miners in the world.
Luke asked long-time friend Joby how the price has climbed so high. Scarcity is the short answer.. you can’t just print BTC out of thin air.. it’s a deflationary currency, so over time with the supply going down and the demand going up- the price goes up.
A lot of people are really excited about bitcoin and the blockchain in general, because it’s outside of the banks.. over a billion dollars is transacted every day. Joby and his wife have visited hundreds of different cities a year in the past few years, in over 120 different countries total, and everywhere they go they use bitcoin.
Luke points out there is a lot of skepticism about Bitcoin now- especially since it’s at an all-time high. Many people are saying that the transaction cost and the blockchain size are going to be a hindrance. They’re also talking about the possibility of quantum computing making bitcoin irrelevant.
Joby responds that the truth comes in 3 phases, first people laugh at you/ don’t believe you, then it’s violently opposed, and then it’s self-evident. We’re still in the laughing stage right now he said- the entire BTC global economy is only a 25 billon market cap right now. Some hedge fund managers run more than 25 billion. Bankers are moving around 8 trillion dollars a day! This dwarfs huge industries like oil and pharmaceuticals, which both are said to top only 1 trillion. But Bitcoin is currently sneaking up on Western Union, PayPal, MoneyGram, and Venmo.
One thing merchants like about BTC is there are no chargebacks, which means a lot less charges and fraud to deal with. On the flip side of this, no chargebacks also means that transactions are bundled into a block and loaded into the blockchain. When the block is loaded, it can only hold 1MB of transactions, about 2300 transactions every 10 minutes (around 7 transactions per second).. If there are millions of people using bitcoin those transactions will get backlogged.
Bitcoin miners are creating new bitcoins, and the fees they charge to mine them are going up.. which is good for the miners, but for small transactions like micropayments, it makes less sense to use BTC because the fees are higher. So people are moving to other cryptocurrencies like Etherium, Dash, Zcash, Monero, etc.
The bitcoin community is split in half on what do to about the growing problem. Joby thinks a consensus needs to be reached. Will they ‘hard fork’ and expand the 1mb block to an 8mb block? Or will a better solution be agreed upon? This is the focus of ‘Consensus 2017’ happening in a few days in New York City.
Here’s a simple breakdown on the two main options being considered: SegWit VS Bitcoin Unlimited
Joby was the target of hackers who found a weakness through his Tmobile account, and were able to port his mobile phone number to themselves. This gave them access to his Facebook, Gmail, AOL, and he finds he’s been locked out of all his accounts. He had 125 bitcoins and other cryptos stolen from a trading platform that was also hacked into.
Check out the full video for some great tips on how to prevent this happening to you.
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