Bitcoin has attracted a widespread group of investors who, among other views, do not trust central governments. Other than acceptance by millions of investors globally, there is no reason why bitcoin is special.

There is potential that blockchains popularize and generate income streams. However, we are at a very early stage, similar to the early days of the Internet. One must have an aggressive growth risk tolerance to consider investing in early stage companies, much like an angel round or a series A. (Series A round is the name typically given to a company’s first significant round of venture capital financing; an angel round of funding is part of the seed round. Angel rounds usually refer to funding below $1 million, although they can somewhat more than that.)

Are you worried about criminal activity and the notion of untraceable currency?

Any widespread criminal activity is cause for concern. However, immutable, transparent, publicly accessible data records (blockchains) are one of the most attractive features of digital currencies.

The vast majority of digital currencies leave traceable data-crumbs on the web, with some explicitly designed for traceability. The recent dark market busts (AlphaBay, Hansa and Silk Road) can be directly tied back to the traceability of digital currencies and the breadcrumbs criminals left. Shutting down dark markets is a much more difficult task in a cash-only economy.

Isn’t money supply better controlled by an established, trusted source?

Paper or “fiat” money has a long history of being devalued by governments: Weimar Germany, the United States in the 1970s, Argentina, Brazil and many other countries today. Contrarily, there is no central power that can arbitrarily decide to create more bitcoin. This transparency alone brings incredible value compared to fiat currencies.

Bitcoin is a slow and volatile form of money. How can it be a real currency?

Bitcoin is slow by design, and is not meant for transactions. Blocks (collections of transactions) need several minutes to process. Bitcoin will never be as fast as Visa or the NYSE which process thousands of transactions per second. Further, bitcoin transactions may result in embedded gains or losses, and therefore tax consequences. Like gold, digital gold is not designed for transactions.

Do you agree that investing in a blockchain makes more sense than in bitcoin?