Sipping coffee with one of my nephews in Delhi who visited my office to counsel his brother in law on the nitty-gritty of Home Loan financing I was shocked to hear a query from a semi-literate middle-aged visitor.” Is it safe to invest in etherium and which company is good for investing Etherium” With banking background for more than 35 years and managing a Finance company after my retirement,I have just acquired a little knowledge about the cryptocurrency from one of my friends who has mastered the complete theory of blockchain and its products during my recent visit to the USA. The subject looked interesting and on my way back from the USA, I managed to read two books on the subject which enlightened me further.
Finishing my cup of coffee, I looked amazingly at the visitor to know how he knew about Cryptocurrencies. Baffled by my direct query, he thought for a while and came up with another bombshell,” Perhaps you have not heard of Etherium so far. My son has invested Rs.500000/- and every day 10 etherium are credited to his account which he can encash after 15 days”
I could sense trouble for him and the family for having invested such a big amount without knowing about the product. On further investigation, I could google the name of the company which turned out to be a P2P Finance company misleading the poor investors.
This incident reminded me of the Harshad Mehta’s infamous regime when thousands of investors had lost their hard earned money by investing in non-existent companies. Every day the stocks were gaining new heights and more and more unsuspected public was getting attracted to the stock market. We could see application forms for IPO’s at the shops of tea vendors, Pan wallah, taxi driver and other such small shops.
Everyone was found discussing about the share market and trying to get rich overnight by investing in share market. Alas!! most of the investors lost their hard earned and sometimes borrowed money also.
I don’t think investment in Bitcoin or other currencies is going to behave the same way as the markets did during Harshad Mehta’s regime but my worries originate from the conversations I have started hearing in India and now Australia. People doing petty jobs and small shopkeepers, barbers have started discussing cryptocurrencies. Nothing technical but worried exclamations “Bitcoin is moving up, Ripple(XRP) is down, Etherium is inert, Ohh- I lost 1000$”
Sentiments are also hurt due to daily reports of employees arrested by the enforcement agencies of various countries for mining cryptocurrencies in their office unauthorisedly using the infrastructure provided to them by the departments for carrying out official work. An advanced computer with a specific configuration is required for mining of crypto which consumes a lot of electricity causing loss to the department. The cost of mining goes astronomically high for mining on ordinary computers which forces the employees to use unfair means.
Now Google coming heavily by banning all ads pertaining to ICO and other related issues, the crypto has nosedived again and the short term investors or traders are jumping in to sell their holdings. This will again impact the valuation and a lifetime chance for long-term investors who could analyze the newly found internet product intelligently.
We know Bitcoin has already produced hundreds of Millionaires and who knows which of the more than 1400 cryptocurrencies takes a few more to this mark in near future