Bitcoin is 14 years old.
Isn’t it amazing that a string of digits generated on a computer cam be worth US$35,000 today!?
Who would have thought that within a decade, Bitcoin grew from a nine-page whitepaper to over half-a-trillion dollars.
Who would have thought that Governments, banks and corporations who have been laughing at the idea of Bitcoin are now trying to imitate it via CBDCs?
Perhaps you may even have thought of getting some bitcoins for yourself.
If you’re looking to invest in Bitcoin, it’s equally, if not more, important to understand “Why Bitcoin” before searching for “How to buy bitcoins”.
We are still incredibly early. Bitcoin when compared to currencies like The Dollar or commodities like Gold is a child-like infant. Its price swings are certainly not for the faint of heart.
Without understanding “why”, its easy to lose sight of what you’re buying into, thereby making it easy to fall victim to scams or other fraudulent investment products (for example Tokens, Jpegs, NFTs, FTX, S.B.F, the list goes on….)
If you know your why and see the potential of Bitcoin, chances are, you’ll commit to the self-sovereign act of holding onto on your stash of bitcoin in your own wallet, no matter the volatility.
So, what’s so special about Bitcoin? What determines the value of Bitcoin? And more importantly, why should you bother with Bitcoin?
In this article, I’ll pull back the curtain on exactly what you need to know about Bitcoin, what makes Bitcoin different and the reason why now may be the time to invest.
Should I Buy Bitcoin? 6 Reasons Why Now Is The Best Time to Invest in Bitcoin
1. Decentralization
Bitcoin is the first and ONLY truly decentralizedpeer-to-peer digital currency in the world. Not your fiat money, USD, Bitcoin Cash, Libra or any new coins you’ve ever heard of.
Bitcoin is different. Unlike a traditional currency like USD, GBP, AUD, SGD, Bitcoin is not regulated or issued by any government.
No central bank, government, miners, coders or users can control the currency supply.
Anyone can buy, send, and receive it 365/24/7 without any limit, restrictions and boundaries.
Guess what? One of the best things that Satoshi Nakamoto, the creator of Bitcoin, did was disappear.
By disappearing in 2011, Bitcoin is no longer controlled by a single person. There’s no single point of failure. Anyone can have some say in how the network is run. And thus, Bitcoin can never be banned.
In Bitcoin, you are sovereign over your own money.
OK, I know what you’re thinking… why does Bitcoin have value? This brings me to my next point…
2. Controlled Supply vs. Demand
So what gives Bitcoin value in the first place?
The answer, is often yet another question – “Why does paper money have value?”
Money has value simply because we all believe it’s valuable.
It’s our belief in money that gives it value.
And the value of anything, whether it’s an apartment, laptop, ounce of gold is determined by its supply and demand.
The same goes for traditional currencies as well as for cryptocurrencies like Bitcoin.
Look: Digital currency is nothing new. Of the current U.S. money supply (~15 trillion), less than 10% of the total amount consists of physical cash and coins. The rest of the USD money supply is electronic. It exists merely as serial of numbers in digital bank databases.
Dollars, Pounds, Euros, Japanese Yen, China Yuan, Ringgits- you name it, all are basically digital currencies, except that they’re a mere digital promise by banks.
Bitcoin: a mathematically scarce digital currency produced w/ pure energy that’s teleported instantaneously anywhere in the world.
US Dollar: a currency printed by the politician/cartel currently in power, restricted by borders drawn from war.
Which ones the future of money?
— Rhythm (@Rhythmtrader) November 2, 2019
The central bank can increase the money supply, swoops in and snaps the finger, print (of course digitally) $2,800,000,000 in a single week – which is pretty much what happened during the 2008 financial crisis.
Citizens in countries such as India, Venezuela, Argentina and Zimbabwe have lost faith in their local currencies and have sought refuge in Bitcoin.
On the other hand, Bitcoin has a finite, limited supply of 21,000,000 coins.
No central bank of Bitcoin can conjure more coins out of thin air.
There’ll be only 21 million bitcoins- ever. Right now there are 18.0 million bitcoins in circulation, with another 3millions coin left to mine. The last bitcoin will be mined somewhere in the year 2140.
Think about this… There are roughly 47million millionairesin the world. That would mean if every millionaire wanted to own an entire Bitcoin, they wouldn’t be able to.Sadly there’s just not enough to go around.
Now: 56% of the world’s population has access to the internet, 42% have smartphones, but only 1% hold Bitcoin. There’s still huge potential for a 40x increase in Bitcoin’s userbase as it stands today.
You didn’t miss the ship, we’re still building it.
3. Bitcoin isn’t a get rich quick scheme, it’s a get free quick scheme.
Now we have mass public unrest (on and off) in: Hong Kong, Chile, Venezuela, Argentina, Lebanon, Iraq, Egypt, France, Russia, Ecuador, Zimbabwe, Indonesia.
Every day millions of people all over the world are fighting for better lives.
During the recent protests, four of the largest bank in Lebanon stopped transfers outside of the country, regardless of the amount and destination.
While Argentina’s Central Bank restricted the payment abroad to a maximum of $50.
In China, banks are offering higher interest and supermarket gift cards to stop people from withdrawing their savings, but alas, it failed. People continued to show up, adamant about withdrawing their funds.
I live in Finland and Im ok with the current banking system here.
My parents in Lebanon havent had access to their bank for 10 days. e.g. They cant send money abroad.
Not until today Ive realized the power of bitcoin. Let bitcoin spread like virus and unemploy the legal crooks.
— Elie Kopaly (@ElieKopaly) October 27, 2019
The simple truth is – It’s not your money if you need permission to use it.
We don’t need cheaper or faster payments, we need censorship resistant money. Money that’s free of any intervening hand of governments.
Bitcoin can solve this.
Beautifully designed in such a way to eliminate intermediary control, to destroy the state’s monopoly on monetary policy, no one including governments or banks can stop you from owning, sending or receiving bitcoins with anyone, anytime, anywhere in the world.
Imagine this, you’re holding your own bank in your own wallet; you own your private keys and you can choose to access your funds whenever you like. You don’t have to trust a central bank or any agency to keep your money.
The idea of carrying your own bank in your pocket and securing your money by remembering 12 or 24-passphrase in your mind is really mind blowing!
Managing your own finances wherever, whenever, however you like with a small hardware wallet. I think it’s the future!
4. One more way for Diversification
About 30% of millennials say they’d rather invest in Bitcoin than traditional investment options such as stocks and bonds.
When it comes to investment, whether it’s gold, stocks, bonds, real estate, having a well-diversified portfolio is very important. It helps to minimize the risk of loss of your entire portfolio and maximize your exposure to more opportunities for return.
Most of us just have shares as well as mutual funds and REITs in our portfolio. In such cases, adding cryptocurrencies like Bitcoin, an entirely new asset class, can provide a hedge against an economic downturn.
How about playing it safe by keep money in a bank?
Saving is no longer a way for people to accumulate wealth. Due to its inflationary nature, you’ll soon lose the purchasing power of your savings over time.
To give you a clear picture, let’s see what’s $100 worth in 1913 over time …
1913: $100
1923: $57.89
1933: $76.15
1943: $57.23
1953: $37.08
1963: $32.35
1973: $22.30
1983: $9.94
1993: $6.85
2003: $5.38
2013: $4.25
2019: $3.87
With that said, Bitcoin is a high risk, high reward investment. Spend some time understand it, allocate 10% of your portfolio. So you can hold on to your Bitcoin investment, avoid panic selling when the prices plummet and reap the maximum yield over long periods of time.
5. The Network Effects
Of all cryptocurrencies, Bitcoin has the largest network, strongest fundamentals and gains from the network effect.
Trace Mayer, a very Early Bitcoin adopter, investor and guru explains it further on how the network effects will ultimately lead to Bitcoin’s success.
Let’s take a closer look at the Seven Network Effects of Bitcoin:
- Speculators – The astronomical rise in the price of Bitcoin attracts tons of speculators into buying, selling and trading bitcoins for quick returns. Giving rise to cryptocurrency exchanges like LocalCoinSwap to facilitate trading between Bitcoin (BTC) and dollars
- Merchants– Over 100,000 merchants worldwide, such as Rakuten, Microsoft, Hostinger, Namecheap are now accepting Bitcoin as a mode of payment simply because speculators hold Bitcoin. Plus, merchants can avoid unnecessary issues like credit card fees and chargebacks. Check out this list of companies that accept bitcoin for web hosting and domain name.
- Consumers– Consumers can save money by spending Bitcoin at vendors such asLolliandMoon. Earn free bitcoins while you shop online using Lolli chrome extension.
- Miners (security)- Merchant acceptance, consumer adoption and speculator trade will then lead to higher price and incentivize more miners to participate to secure Bitcoin payment network.
- Software developers– Bitcoin is an open-source and permissionless protocol. Anyone can build utility and application on the most secure blockchain protocol.
- Financiers – Investors can now hedge Bitcoin with financial instruments such as futures and options.
- Adoption as a World reserve currency– All the six network effects culminate in this final network effect, where all transactions will be settled on the Bitcoin blockchain such as real estate, commodities, conventional currencies.
With each passing day, Bitcoin is growing stronger. The number of active wallet addresses and activities run on Bitcoin networks continues to rise. More and more people are embracing this disruptive technology to take back control of their finances.
6. A Path to Financial Freedom
Imagine you’re trying to decide where to keep your money:
Option 1: Using Bitcoin
1. Download wallet
2. Backup your seed phrase (Remember not your keys, not your Bitcoin)
3. Send, store and receive funds
Option 2: Using Banks
1. Visit a bank branch during business hours.
2. Provide your identification card and Social Security number.
3. Show proofof currentaddress.
4. Place an initial deposit amount to open a new bank account.
5. Hidden fees. If you fail to meet certain requirements or minimum deposits, you’ll be charged a monthly maintenance fee. More extra fees such as Paper statement fee, card replacement fee, ATM operator’s fee, international withdrawal fees, inactivity fee, account closure fee.
6. Trying to understand many pages of legal documents, and sign away your rights to privacy. Hopefully, the bank will keep your funds, personal data, balance andspending recordssafe.
7. Wait for days, if not weeks, to process your wire transfer. And being charged exorbitant fees when you transfer money overseas.
8. Asking for permission to spend your money. Have a limitation on how much you can withdraw, where and how you spend your own money in the account.
Which one is better for you? And which one will the next generation choose?
What do you think?
Have you invested in Bitcoin? Why and why not?
Educate yourself and stay safe.
I’ve handpicked a few guides for you to read next:
- FAQ: Everything You Need to Know About Bitcoin Before You Buy
- 4 Best Ways to Convert Bitcoin to Cash
- How to Buy Bitcoin Instantly with PayPal
- How to Buy Bitcoin with Gift Cards
- How to Buy Bitcoin and Other Cryptocurrencies
- 7 Best Places to Buy Bitcoin Instantly in 2020
- 10 Best Cryptocurrency Exchanges to buy and trade Bitcoin Cryptocurrency
- How to Secure your Cryptocurrency? Cold Wallet vs Hot Wallet
- 10 Best Bitcoin Wallets You Should Use to Protect Your Crypto Investment
- Trading vs HODLing for Bitcoin Investors
I live and breathe making an income online.
I’ll be sharing more of ideas and guides soon. Stay tuned.
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Disclaimer
Keep in mind that I’m not a financial advisor, my recommendations shouldn’t be used as professional investment advice.
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