One that most likely never considered is the cryptocurrency bitcoin. While there is plenty of reason to be skeptical, bitcoin expert, author, and entrepreneur Edwardo Jackson believes there is potential value for the Black community to embrace bitcoin. A recent Black Enterprise article shares some of his insight.
“People liken it to digital gold,” Jackson explains, a part of the growing crowd that sees potential in African-Americans using bitcoin to help the financial statuses of their businesses and themselves. To be clear, there are no actual coins involved, as Bitcoin is purely digital. A simple definition is “electricity converted into long strings of code that have money value.” Rather than a bank, hundreds of computers across the world are set up as “bitcoin miners” processing bitcoin transactions. At this point, you can use one of the several sites as exchanges to set up purchases. The first step is getting a digital wallet to store and manage bitcoins, what Jackson calls “PayPal without the bank.”
Just like gold, Bitcoin fluctuates in value. As of the time of this writing, one bitcoin is worth $2,285.85. Years ago, one was worth $5, so there is potential to get a heavy return on investment. Jackson started accumulating bitcoins in 2013 and says the ROI has been 1226% in just four years.
“One of the best things I do for my mom, when I can, [is buy her bitcoins]. She tries to add a little more to it. She loves watching it grow. If you put X amount of dollars into Starbucks at 25, by the time you are 40, it will be worth a million—kind of the same thing, but more accelerated,” he says.
While this sounds like a golden opportunity, there are many risks associated with bitcoin. In an interview with The Verge, Bill Gates noted that heavy volatility and risks of cybertheft were big concerns he had with the currency. If something goes wrong, there is no depositor’s insurance to fall back on. In addition, if a country was to certainly ban bitcoin or people stopped accepting them, there would be no recouping your investment.
Jackson however, remains optimistic: “I believe, over time, this thing will be worth maybe even a million per bitcoin.” For now, bitcoin is best as a complement to disciplined investing rather than a complete replacement.