Should You Participate in the Gini Ecosystem?

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"How Much Money Can I Make from Gini Compared to Bitcoin?" This is a question we're asked frequently. The answer to this question depends on many factors (of course), but we can provide some historical data and an analytical framework that we use to justify our own perception of the long-run value and potential price appreciation of any cryptocurrency. There are two basic ways to approach this question: Math and Reason. We'll start with the math first because it provides some useful context for the reason section. If the math is confusing, don't worry, just scan the math section and then scroll down to the "A Better Way to Communicate the Value of Gini" section.

Applying Bitcoin's Growth Rate to CryptoX.  Many people use Bitcoin's growth rate as a general base rate and then discount for various factors that they deem important. So, let's say the current price of Cryptocurrency X ("CryptoX") is $0.40. That price ($0.40) * 166,667x Bitcoin growth rate between Jul 2010 and Feb 2018 (earliest reliable Bitcoin market price was July 2010) = $66,667 per CryptoX coin, which would imply a $1.7 quadrillion market cap based on a circulating CryptoX supply of, for example, 26 billion CryptoX units. (NB: To compute the percentage growth in this scenario, just multiply by 100: 166,667 * 100 = 16,666,667%.) Given Bitcoin's market cap was around $310 billion in Q1 2018, $1.7 quadrillion is probably not realistic (although potential USD hyperinflation certainly makes it possible), but that's the way the math works.

All Crypto Markets Are Driven by Our Perception of Fiat Currencies. Our perception of a realistic possible market cap for Bitcoin, CryptoX, or any other cryptocurrency is based on whether we believe major fiat currencies are heading for hyperinflation or not. For example, in my analysis in "Can Gini Reach $10,000 Like Bitcoin?," we can see how numerous factors can converge to enable Gini (or any well-designed cryptocurrency) to hit those levels. Regardless of their exact future growth rate, it should be clear that there's a lot of growth ahead of any well-designed cryptocurrency.

A Better Way to Communicate the Value of Gini

There are better ways to credibly communicate a cryptocurrency's risk-reward profile without getting sucked into complicated (and totally arbitrary) valuation calculations. Most people should make their decisions based on the following basic questions:

  • Do I have any discretionary currency (fiat or crypto) that I can exchange for Gini? If not, don't buy Gini.
  • Do I need to access my discretionary currency within 6 months? If so, don't buy Gini because short- to medium-run price volatility must be endured to increase the probability of realized gains.
  • Is Gini likely to appreciate more than other assets that I could buy? If so, buy Gini.
  • Is Gini likely to collapse to $0? If so, don't buy Gini. (Read the general cryptocurrency overview and the Gini whitepaper to learn why Gini has significantly more substance and long-term potential value than other cryptocurrencies.)
  • Does Gini have value for society? Does buying Gini support the growth of the Gini ecosystem? Are these points important to you by themselves? If so, buy Gini.
  • Are cryptocurrencies a viable long-term asset class or will the government ever be able to block people from using them? Cryptography prevents governments from seeing crypto transactions as long as the cryptocurrency is designed with strong transaction privacy. This means there's no technical way for governments to stop humanity from using cryptocurrencies.1 Additionally, many large banks and several central banks are already setting up their own cryptocurrency trading operations. So, if you think cryptocurrencies are viable over the long-run, buy Gini. If not, don't buy Gini.
  • After doing my research and learning as much as possible about Gini, do I understand enough about Gini to feel comfortable exchanging some discretionary currency for Gini and participating in the Gini ecosystem? If so, buy Gini. If not, don't buy Gini.

Substantive Dynamics Drive Long-Run Value & Appreciation. The questions above are much easier to ask and answer and they're much more meaningful overall than getting sucked into highly speculative and totally arbitrary valuation calculations. In fact, most people should focus on substantive questions about why Gini is intrinsically valuable both as an asset and as a cure for many of our world's economic and political problems because those are the fundamental drivers of Gini's long-run value and price appreciation.

The Law of Supply & Demand Fuels Long-Run Price Appreciation. Many governments make it more difficult to trade cryptocurrencies than fiat currencies; thus, the supply of Gini will be artificially constrained. Just like the idiotic "war on drugs," which creates unfulfilled demand and artificially high prices for drugs by artificially constraining supply, the government-induced cryptocurrency supply shortage creates unfulfilled and rapidly growing demand for cryptocurrencies, which ensures that the price of well-designed cryptocurrencies will rise over the long-run. That doesn't mean there won't be many short- and medium-run spikes and dips, but these supply-and-demand dynamics will put upward pressure on the price of well-designed cryptocurrencies for many years to come because many governments will continue trying to slow the adoption of cryptocurrencies, but they will never be able to stop them.

No Rational Reason Not to Participate in the Gini Ecosystem. Given all the factors we've covered so far and the toxic state of debt and broken monetary policies in virtually all countries on Earth today, there is a huge and unfulfilled multi-trillion-dollar demand for trustworthy and technically sound cryptocurrencies. Thus, the probability of Gini appreciating is far higher than the probability of any debased fiat currency appreciating. So, whether somebody makes 100%, 500%, 10,000%, 100,000%, or 1.7 million-percent returns from a buy-and-hold Gini strategy, does it really change the final decision? What other asset can people buy and realistically expect anything close to those returns? As long as people are only using discretionary funds, there's no rational reason not to allocate a portion of their discretionary funds to a well-designed cryptocurrency as part of a long-term buy-and-hold strategy.

DISCLAIMER: This article is not investment advice nor a solicitation to buy/sell securities. There are obvious risks in any currency market and people can make and lose money in any market. We have provided verifiable historical data, a logical, reasonable way to analyze the data, and a meaningful series of balanced questions to help people decide whether they might benefit or not from participating in the Gini ecosystem. Ultimately, each person must decide whether their individual financial circumstances are appropriate before they participate in the Gini ecosystem.


Notes:

[1] However, as illustrated in the Gini movie, government cryptocurrency blacklists will destroy Bitcoin and virtually all other cryptocurrencies that do not have strong transaction privacy.


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