Every quarter we get together with three other families for a dinner party. While all professionals no one is in the finance space except for me. But at our last gathering this past Sunday night the conversation turned to bitcoin. In the last month or two bitcoin has made the jump from esoteric financial instrument into a dinner party discussion subject.
We first covered bitcoin in a two part series on marketplace lending with bitcoin three years ago. It provides a good primer to what bitcoin is, the definition of a blockchain and how it works for lending.
Back in late 2014 bitcoin was nothing more than a curiousity – you could barely even call it part of finance – it was a strange hobby that a few tech people were engaged in. Today, bitcoin is making an appearance regularly on the front page of the Wall Street Journal as its meteoric rise has captured the imagination of the general public.
Depending on the day (or the hour) bitcoin has a market cap of around $300 billion which is close to the value of Bank of America, one of the top 10 largest companies in the United States. According to Coinbase, the largest bitcoin exchange in the world, the price of bitcoin is up over 2,000% in the last 12 months and that is why everybody is talking about.
We have read articles about someone buying two pizzas for 10,000 bitcoins back in 2010 (around $170 million in today’s value) or another person throwing away 7,500 bitcoins. There are now bitcoin billionaires and many other stories of people who have become insanely rich because they got into bitcoin early. This is what captures the imagination of the public. If only we had invested just a few hundred dollars back in 2011 or 2012.