BitTorrent Is a Classic Example Of Why Crypto Isn’t For Everyone

BitTorrent (CCC:BTT-USD) might be nostalgic to people who loved cryptocurrency for its original purpose: decentralization and avoiding formal procedures and rules. More specifically, BitTorrent software was used in the early 2000s to get movies and songs for free. You could bypass the “formal way” of buying movies or CDs and save plenty of money.

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This was a very interesting feature about BitTorrent. But this is now, so what’s up with BitTorrent?

That Nostalgic Factor

Torrent and BitTorrent used to be a very popular application with good reason. You could get a huge amount of movies and songs for free using a peer-to-peer network. Was it great? Yes and no. It was great to the extent that you could find your favorite movie or song for free without spending hours searching for it.

It was at the same time a very risky user experience. You had to download software to find the files you wanted, but using the software essentially made you public, as there was a chance other people searching for similar media could have your files transferred to them.

Two other major problems made it very risky. Reason number one was increased odds of getting a virus that’d destroy your computer — or at the very least install a nasty bug. Reason number two and perhaps riskier was the fact that someone could hack your computer. There was no anonymity since it required you to share your IP address, and unless you were technologically savvy enough to hide your IP address, you were exposed to hackers.

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This isn’t to mention the often poor internet download speeds. This was way before fiber-optical cables and the 100-200 Mbps high-speed internet we enjoy today.

The death-knell of course was as torrenting became more mainstream, threats of legal action against digital pirates were brought to bear, discouraging many from the practice.

With that in mind, we can now return to the present in the modern era of cryptocurrencies. We have the BTT Token. But the main idea remains the same.

What Is The Use Of BitTorrent?

What is BitTorrent about? They say themselves:

“Based in San Francisco, BitTorrent is the company behind the largest decentralized P2P communications protocol for distributing data and large files over the Internet. The protocol is responsible for moving a significant percentage of the world’s Internet traffic each day.

The company currently develops products across two brands, BitTorrent (https://www.bittorrent.com) and µTorrent (https://www.utorrent.com), which offer popular torrent download clients for Windows, Mac, and Android. With over 100 million active users each month, BitTorrent offers feature-rich, safe torrent programs for the desktop, a browser-based torrent streaming and downloading the product, and a mobile torrent downloader for Android available on Google Play Store.”

This begs the most important question: what’s the use of BTT? Is it practical, or just speculative?

BitTorrent has several products. There are torrent downloaders, for Windows, and Mac operating systems and Android devices. Then there are BTT-token-powered crypto applications such as BitTorrent Speed and BitTorrent File System that use the blockchain system.

The main idea is that you can get faster downloads and receive BTT token rewards. You can also get BTT token rewards using DLive, the largest live streaming community on the blockchain. DLive Protocol is a fast, peer-to-peer network bringing you directly to your audience.

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Monetizing your audience through token rewards on a livestream is certainly interesting. You can get rewards also by watching content. The question is how much you can earn and if it is worth the effort. How much BTT token is an hour of your time worth? Is it worth a few dollars? There’s certainly a case to be made about an opportunity cost on just about anything else when watching an hour of DLive for BTT rewards. A lack of hard numbers and unreliable audiences doesn’t exactly build a case. Unless you have thousands of viewers or subscribers, I do not think the monetary rewards would be great.

BTT Token: A Rally in 2021 and a Crash

On CoinMarketCap as of May 27, 2021 BitTorrent Token had a price of $0.004285 and is ranked number 43 in terms of market capitalization compared to other coins or tokens. It has a market capitalization of $2.8 billion and a maximum supply of 990 billion tokens, with a current circulating supply of about 660 billion BTT. That is a lot. With that number of tokens outstanding at a $2.8 billion market cap, it could flirt with bubble territory. The true value of BTT currently doesn’t fall in line with the irrational price they currently fetch.

In April 2021 BTT surged to $0.01269. It has since crashed to a recent price of $0.004283. BTT, like other cryptocurrencies, is that it’s too volatile. So is it worth buying?

BitTorrent: Disrupting the Entertainment Industry

CoinMarketCap mentions the following interesting information about what makes BitTorrent unique, “BitTorrent’s original goal was to disrupt the legacy entertainment industry and how consumers obtain content.”

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Still, BitTorrent has subscriptions for its users, with the most expensive one at a cost of about $70 per year offering features such as anonymity and security. I have my doubts though about possible future legal claims brought again BitTorrent by large media and record companies.

The question of whether BTT token is cheap or too expensive lies in its fundamentals. It has a use but ultimately supply and demand will drive its price. And it remains a highly speculative investment just like other cryptocurrencies. So before jumping in and start buying it, consider all these risks. Do not get carried away easily. No need to follow momentum without being reasonable about the true fundamentals. The FOMO effect often leads to illogical investing decisions, not logical ones. For me, this token may have a use as mentioned above but it is impossible to justify now at its $2.8 billion market valuation.

On the date of publication, Stavros Georgiadis, CFA  did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Stavros Georgiadis is a CFA charter holder, an Equity Research Analyst, and an Economist. He focuses on U.S. stocks and has his own stock market blog at thestockmarketontheinternet.com/. He has written in the past various articles for other publications and can be reached on Twitter and on LinkedIn.   

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