What you might not know about the genesis of cryptocurrency

  • Part 1 — Genesis of the crypto ecosystem? — An Introduction
  • Part 2 — Bitcoin — Problem it’s trying to address?
  • Part 3- What are Bitcoin Mining and the Economics behind the Bitcoin mining business
  • Part 4 — Landscaping of Entire Cryptoecosystem (USD 740 bn — Greater than combined GDP of Malaysia and Thailand or 1/3rd of India’s GDP)
  • Part 5 — Key Challenges
  • Part 6 — Valuation — View Point
  • Part 7 — Should I enter or exit?
  • Created digitally by a community of people that anyone can join; No single person controls it
  • Bitcoins are ‘mined’ using computing power in a distributed network
  • No. of Bitcoins that can be mined is capped at 21mn in the source program (76% of this has been mined to date)
  • The technology behind the functionality of Bitcoins: Blockchain
  • Bitcoin is the only Cryptocurrency/asset: There are ~1,400 active cryptocurrencies/assets in the entire ecosystem. Bitcoin is just one of them and accounts for 30% of the entire ecosystem in terms of market capitalization
  • Arbitration is not possible: Typically when a trading ecosystem of a new asset class is developing, there are several possibilities of Arbitrage gain primarily on account of inefficiencies across countries, exchanges, etc. It does exist here as well at this point in time
  • It’s a bubble: Humans are rational human beings by nature but become irrational when they get trapped by greed caused by the euphoria of Fear of Missing out (FOMO) created by the people around them. This is not the only instance of irrationality! If we look back and read the history of Tulip Mania (1637), South Sea Bubble (1711), Radio in the 1920s, and the recent Internet bubble — All share similar characteristics. The only difference with Crypto is, thanks to Social Media and Rising Internet Penetration levels across the globe, the news is spreading like wildfire luring people by the thousands leading to disproportionate Demand and hence this bubble!

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Anuj Khandelwal

Anuj Khandelwal

| Private Equity Professional | Startup Mentor | Visiting Faculty, The Institute of Chartered Accountants of India (ICAI) | Global Economics & Finance Writer |