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First; Bitcoin is a cryptocurrency, a form of electronic cash. A decentralized digital currency that has no central bank or single administrator that can be sent from user to user on the peer-to-peer Bitcoin network without the need for intermediaries.
Bitcoin has become a big concern for investors over the past year for its massive spike in value and the ensuing rush to regulate it, plus its nasty crash. However, the real story is the degree to which Bitcoin democratizes global financial systems.
While most people see it as anonymous money, its blockchain is also perfectly transparent and may be overseen by anybody at will. That apparent contradiction makes it a revolutionary way for people around the world to realize greater financial freedom: Bitcoin does to money what the internet did to information by its provision to indiscriminate access to a decentralized financial system.
Do you consider investing in bitcoin?
Bitcoin is not just a cryptocurrency, but also a new financial system with many components. Bitcoin was founded in 2008 by Satoshi Nakamoto and was later released to the public after a short period. The cryptocurrency uses cryptography and relies on a peer-to-peer network. So it is not owned or controlled by any individual, corporation, or government.
Why Bitcoin is Gaining Traction
As the world is becoming ever more reliant on the internet, apparently it is no surprise that Bitcoin, a secure, global, and the digital currency has claimed the interest of investors.
Bitcoin as an entirely new asset class is open and provides an exciting opportunity to everyone around the globe.
Investing in bitcoin may seem scary, but know that it takes time and effort to understand how Bitcoin works.
Note; Bitcoin with a capital “B” refers to Bitcoin the network or Bitcoin the payment system; while bitcoin with a lowercase “b” refers to bitcoin as a currency or bitcoin the currency unit.
Why Investing in Bitcoin?
It seems silly to some people that one bitcoin can be worth hundreds of dollars.
But its scarcity and usefulness have made this cryptocurrency valuable?
Let’s take gold as an instance. There is a limited amount of gold on earth.
Each time a new gold is mined, there is always less and less gold left and makes it harder and more expensive to find and mine.
The same is applicable to bitcoin.
There is only 21 million Bitcoin, and as time goes on, they become harder and harder to mine. Take a look at Bitcoin’s inflation rate and supply rate:
Outside its nature of scarcity, bitcoins are very useful with a sound and predictable monetary policy that can be verified by anyone.
This great cryptocurrency sound monetary policy is one of its most important features making it easy for individuals to see when new bitcoins are created or how many bitcoins are in circulation.
- Bitcoin provides an easy way for people to escape failed government monetary policy.
- Bitcoins can be sent from anywhere in the world to anywhere else in the world.
- No bank can block payments or close your account. Bitcoin is censorship resistant money.
- Bitcoin makes cross border payments possible
As the internet made information global and easy to access. Is of no doubt, a global currency like Bitcoin will have the same impact on finance and the global economy.
If you understand the potential impact of Bitcoin, it will be easy for you to understand why investing in bitcoin may be a good idea.
Bitcoin’s price is generally shown as the cost of one bitcoin to everyone. However, exchanges will let you buy any amount, and you can buy less than one bitcoin.
There is no official Bitcoin price. Bitcoin’s price is set by whatever people are willing to pay. CoinDesk’s price index is a good resource.
Bitcoin price history from 2009 to 2018
Among the factors which may have contributed to this rise according to Bitcoinwiki were the European sovereign-debt crisis—particularly the 2012–2013 Cypriot financial crisis—statements by FinCEN improving the currency’s legal standing and rising media and Internet interest.
Since 2009 and till 2013, almost all market with bitcoins were in US Dollars ($).
As the market valuation of the total stock of bitcoins approached the US $1 billion, some commentators called bitcoin prices a bubble. Early April 2013, the price per bitcoin reduced to $50 and then rose to around $100. Over two weeks starting late June 2013 the price reduced again to $70. It then started recovering to $140 again on 1 October. On 2 October, The [[Silk Road]] was seized by the FBI. This Ross Ulbricht resulted in a flash crash to $110. The price fastly rebounded, taking its stand back to $200 weeks later. The latest run went from $200 on 3 November to $900 on 18 November. Bitcoin passed the US $1,000 on 28 November 2013 at Mt.Gox.
Prices fell to around $400 in April 2014, before rallying in the middle of the year. They then declined to not much more than $200 in early 2015.
Check below for Bitcoin’s price history (2017-2019 February) according to Coindesk:
When is the right time to buy?
As with any market, nothing is for sure.
Throughout its history, Bitcoin has generally increased in value at a very fast pace, followed by a slow, steady downfall until it stabilizes.
Bitcoin is global so is not influenced by any single country’s financial situation or stability.
Take, for instance, the speculation about the Chinese Yuan devaluating has, in the past, caused more demand from China, which also pulled up the exchange rate on U.S. and Europe based exchanges.
Global chaos is generally seen as beneficial to Bitcoin’s price since Bitcoin is apolitical and sits outside the control or influence of any particulate government.
When thinking about how economics and politics will affect Bitcoin’s price, always think on a global scale and not just about what’s happening in a single country.
Where to Buy Bitcoin
The difficulty with buying bitcoins depends on your country. Most developed countries have more options and more liquidity.
Coinbase is the world’s largest bitcoin broker and available in the United States, UK, Canada, Singapore, and most of Europe.
You can use Buybitcoinworldwide Exchange Finder to buy bitcoin with your country
How to Secure Bitcoins
As with anything valuable, hackers and scammers will always be after your bitcoins, so securing your bitcoins is the next thing that comes to your mind.
If you’re serious about investing in bitcoin and see yourself buying a significant amount, is recommend you use a Bitcoin wallet with high security. Luno wallet can be of good when thinking of where to save your bitcoin against lost or hackers due to its level of security, a platform that connects potential buyers with potential sellers. It allows its users to exchange Bitcoin as well. Bitcoins should only be kept in wallets that you control.
If you leave $7,709.90 worth of BTC (2btc as of the time of publication) with a friend, your friend could easily run away with your coins and ending up losing your hard earned money.
Because Bitcoin is on the internet, they are even easier to steal and much harder to return and trace. Bitcoin itself is secure, but bitcoins are only as secure as the wallet storing them. You can use or search for yourself other wallets you might consider better for you.
Investing in bitcoin is no joke, and securing your investment should be your top priority.
It’s important to understand how the cryptocurrency works before investing in bitcoin.
Bitcoin is still new and it can take months to understand the true impact Bitcoin can have on the world.
Take some time to understand Bitcoin, how it works, how to secure bitcoins, and about how Bitcoin differs from fiat money.
The above information should not be considered as investment advice. It is for general knowledge purposes only. Make sure to make your own research before buying any bitcoins or investing in bitcoin.