*** CRITICAL UPDATE: Before reading today’s letter, which looks at how BTC would likely trade from now on, the Pure Blockchain Wealth staff wanted to make certain that you’re aware of the new U.S. symbol for Globalive Technology (TSX-V: LIVE & US: LVVEF), as shares keep going up for three days straight. ***
COMPETITIVE FORCES: FREE ENTERPRISE AT WORK
With any business, the price pressure of the product or service is predominantly down.
The reason is that competition in the free market system helps to drive costs down, bring efficient solutions to problems, and shrink fat profit margins.
A simple example of how this works would be a supermarket. It sells products, which everyone needs. Had there been one such store in the city, the prices would be incredibly high, as the owner would be the only supplier of products, which have a high, recurring demand.
This situation wouldn’t last long, though. One of the workers would see how the owner crushes it, making money, hands over fist, and would figure out the cost of reproducing such an operation. Since the new store would double the available supply of goods in the city, the pioneer owner and the new entrant would both compete on prices, resulting in the consumer to enjoy better value.
In the world of BTC, miners all do the same work and serve the same role – maintaining the blockchain in exchange for coins. They fight with each other, ceaselessly, to find the best ways to drive down their costs – cold weather and state-of-the-art machinery are two of the factors involved, but there are many others, as well.
Unless the users, the owners of BTC, are willing to pay a large premium, the price of coins will be marginally above the cost of mining over the long-term.
BTC isn’t a commodity, per se, but it will be priced as such, unless either a speculative mania ignites once more, or the need arises to use BTC over fiat, on a mass scale.
Before you invest or use any coin, make sure you get a handle on the average price to mine it, so you can understand the premium you’re paying for it.
Courtesy: Insider.Pro
As of February, these were the costs to mine a single BTC.
We must keep our guard up, so to purchase our cryptocurrencies for the best prices possible, if we intend to simply hold them.
As I’ve previously mentioned, in Q4 of 2017, we issued many sell alerts on our largest positions, booking gains of 6,544%, 8,315%, 1,902%, and 937%, among others. We do not see this environment of easy profits returning anytime soon to crypto assets.
We do see blockchain businesses, though, continuing to break ground and prosper, but with cryptocurrencies, stay patient for now.
Best Regards,
Brad Robbins
President, PureBlockchainWealth.com
