spec·u·la·tion
ˌspekyəˈlāSH(ə)n/Submit
noun
noun: speculation; plural noun: speculations
- the forming of a theory or conjecture without firm evidence.
"there has been widespread speculation that he plans to quit" - investment in stocks, property, or other ventures in the hope of gain but with the risk of loss.
"the company's move into property speculation"
Investment in... ventures in the hope of gain but with the risk of loss.
Does this one sentence not sum up what life is? Hope and Risk? I have been reading a lot of articles lately from journalists and pundits primarily from the mainstream media sources and the financial world, and even not-so-mainstream bloggers and social media types from the technology world. There is a lot of ink being spilled about bitcoin / cryptocurrency / blockchain. Given the rise in nominal USD value of cryptocurrencies over the past 6 months, the words "bubble" or "ponzi" or "speculation" or "volatility" or "crash" pop up over and over and over again. Opinions on cryptocurrencies range from outright condemnation to wide-eyed admiration. There are a couple themes that pop up frequently:
The vast majority of people simply do not understand how cryptocurrencies fundanmentally work. They do not understand the history and they do not understand the protocol(s)
Everyone is racing to make comparisons "Bitcoin is like... gold.. tulip bulbs... fiat currency... etc"
There are some who completely understand the technology and simply believe it is not useful or valuable in any way.
But the one theme I want to focus on is the idea of speculation and how it is a dirty word in the mainstream, conservative finance world.
Speculation is usually used as a dismissive term by financial professionals - those who deal in the business of charging people money to manage their money for them. These "Advisors" use fear to sell you their product. They scare you with words like "risk" and "volatility" and "losses". Speculation is demonized. They want you to believe that the future is predictable. That they or their company have some system that is able to produce returns that minimize whatever risk they have scared you with. They tell you how you won't sleep at night when you own risky investments, and that you're "better off going to the casino than investing in x".
Well here is a dose of reality: Life is one giant exercise in hope and risk. No one can predict the future, and even if they could, they would probably not be better than chance at predicting how the market will react to the predicted event.
Which brings us to Cryptocurrency. Nearly every article or blog post I read leave the reader with the thought "The value may be going up, but it's driven by speculation and it's extremely risky". But let's go back to our definition, one definition of speculation being "investment in stocks, property, or other ventures in the hope of gain but with the risk of loss.
The hope of gain with the risk of loss.
On one hand, to speculate means to have hope about something, understand there is a risk of loss, and that nothing is guaranteed. When these financial professionals and pundits sell you the idea that you can get something for nothing, that you can have your hopes and dreams protected and not worry about loss, THEY are the ones who are engaging in dangerous speculation - THEY are the ones forming a theory that is not based on facts. Life is an exercise in speculation. Waking up every day is accepting the risks that are inherent in getting out of bed, and choosing to live a life full of gratitude and hope for the future anyway. To speculate is to live. Every decision you make today has some unforeseen impact on the unwritten future - either positive to negative -but that doesn't mean you cower in a corner afraid to act.
So of course speculation is driving the price of bitcoin higher, and real estate and stocks. Speculation is also driving people to have babies, and enroll in college and move across the Country to start a new job, because in all these cases one has hope that the future will be better than today.
Do not be afraid to speculate, do not be afraid of the risk of loss. Just as everyone will suffer tragedy in their life, one may suffer financial volatility in their chosen investments. But never lose hope, and do not fool yourself into believing that you can live a life without risk.
Accept the realities of life and live as fully and completely as you can. And for the love of God, HODL!!!