If to go by the predictions of Lou Kerner, the co-founder at Crypto Oracle, Bitcoin will ultimately overshadow gold as it is claimingly the most potent store of value invented up to this day. Mr Kerner also points out that the day it will happen will not be tomorrow or next week, but instead, this significant day is to come years from now. To pinpoint his convictions, the venture capitalist refers to the so-called Amara’s Law as well as to Amazon’s dramatic lows in the times of the dot-com crash.
Let’s look closer to decide whether Lou Kerner’s arguments carry any weight in the times dubbed by many as 21-century blockchain revolution.
Amara’s Law
Looking back at the ages of people’s existence, It becomes quite evident that whenever a groundbreaking technological invention is introduced, people are crazily fascinated about the next day’s opportunities it so rapidly seems to unlock. Then, about a decade passes and the effect of the novel discovery seems to be quite insignificant and thus utterly disappointing. As a result, scoffers begin to gush disapprovingly that the whole concept was just a scam and people were shamelessly fooled. Which just happens to be the momentum for the technology to take off and become unstoppable.
The above-mentioned stage, each huge discovery in technologies appears to be bound to come through, is known among the tech-initiated as Amara’s Law.
Back in the day in the 70s, Roy Amara, a gifted computer scientist at Standford and a president of the Institute of the Future, articulated:
‘We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.’
The law in question suggests that there is a right time when the technology settles down, and it happens between the period of early disillusionment and the later realization of underrating it.
The thing is that we demand too much from the technology in its infant stage, and tend to write it off after 10 years of its existence, whereas 5 (sometimes 10) more years prove to immensely benefit those who were forward-looking and patiently faithful.
And as we get back to Mr Kerner, he connects the dots between Amara’s Law and Internet Bubble burst with its legendary survivor Amazon.
Amazon’s survival
He further explains that when the bubble of the Internet burst, Amazon – currently the world’s third largest brand – saw its value sink over a staggering 95% in just 2 years.
To elaborate on this, at the start of 1999, the cost per share at Amazon amounted to over $300. In contrast, in the middle of 2001, the number plunged to a meager $6.
Furthermore, the biggest ever value that Amazon traded per share was $2 050 in September 2018. This was when it became the second most valuable company in the USA following hot on the trail of Apple. However, in a month’s time, its market value dropped by 27%.
Mr Kerner argues that as volatile as Amazon is, it is absolutely incomparable with what long-term Bitcoin investment will make its holders sustain. He refers to the point in 2013 when BTC plummeted by 70% in a single day and continues by saying that although we do not fancy this happening, it comes with the territory when you make crypto investments.
“Crypto has been so weak because for most of it there’s no really underlying value outside of confidence,” Kerner said. “[But] bitcoin, itself, we think is going to replace gold eventually. Gold is an $8 trillion thing.”
Conclusion
One of the greatest discoveries in the world known to everyone as the Internet strikingly turned the life of humankind on its head. It revolutionized every bit of our existence: the way we communicate, do business, buy things, the way we learn, and even the way we fall in love and get married. In the retrospect, however, its early years of overexcitement, people’s overestimatione and unrealistic expectations prompted the burst of the dot-com bubble. Which was soon followed by a sharp twist – late Internet bubble investors who didn’t fail to see a long-term opportunity and tapped into the dot-com potential made it to the riches, being sure they were presented with the second chance.
Kerner believes in Amara’s law in the dot-com bubble, Amazon’s survival and thus maintain that the huge wave of Bitcoin will descend on the world community down the longer road. Therefore, he advises adopting a long-term optimistic sentiment.
Is the dot-com crash really akin to Bitcoin’s current resting in the bloodbath?
Many investors, analysts and crypto aficionados would say so. Yet there is a group of skeptics who would make a strong case against the idea of the new gold in the face of Bitcoin. This is why WildTornado casino doesn’t recommend you to jump to conclusions, but to adopt an organized approach with regard to any kind of crypto investments by analyzing all the trends and data thoroughly.
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