50 Cent accidentally made $8 million in bitcoin
This is just one example of why Bitcoin is not a real currency to purchase goods, but rather it is only a currency trading platform.
Why would a person that understands the way that Bitcoin works use the currency to buy anything? For that matter, why would you sell anything in exchange for Bitcoin?
If you are acquiring a real product, using Bitcoin rather than a government backed security such as US dollars could mean that you are vastly overpaying for the product. According to the article, 50 Cent’s customers paid approximately 20X what they would have paid if they had used US dollars. At the time of the purchase, the combined value of his music was approximately $400K for those users that used Bitcoin. At the time of the publishing of the news, it had appreciated to approximately $8M.
I am perfectly confident that none of those purchasers would have paid 20X the list price for the flexibility to purchase the music using Bitcoin.
Selling a product is also riddled with risk! The volatility of Bitcoin means that if you sell a product today it is very likely that the Bitcoins that you receive could drop in value by 10-20% in a very short time – potentially before you can exchange the Bitcoins for a more stable currency or use the Bitcoins to buy a different product. This means that it could potentially destroy and profit from the sale of that original product.
Bitcoin is not a real currency. It doesn’t make sense to buy or sell products with it. Its only usefulness is to buy it in the hopes that the value increases or to short it in the hopes that the value decreases.
From The Verge:
In 2014, rapper 50 Cent let people buy his album Animal Ambition using bitcoin. He then let his account lie unused for years, and only just recently discovered that he’s now a bitcoin millionaire, as first reported by TMZ.
At the time, a single bitcoin was worth only $662, and the rapper’s fans could pick up the album for a fraction of that. In total, he pulled in over $400,000. Since then, the value of bitcoin has soared: the price of the cryptocurrency rose as high as $17,000 earlier this month, only to drop under $10,000 in recent weeks. (At the time of writing, bitcoin is now worth a little more than $11,000.) After sitting untouched in his account for years, 50 Cent’s earnings are now worth $7 million to $8.5 million, based on the current fluctuating bitcoin valuation.
50 Cent confirmed his new windfall on Instagram and Twitter, saying, “Not bad for a kid from South Side, I’m so proud of me.” He later commented on his post: “Ima keep it real, I forgot I did that shit lol.”
