Bitcoin: Whatever is over?

If you spent $ 27 on Bitcoin when it was created by Satoshi Nakamoto in 2009, your investment will now amount to over $ 37,000,000.

Being the largest investment tool ever, Bitcoin experienced a rapid rise in 2017 from $ 777 to $ 17,000.

By creating millions of opportunistic investors and leaving financial institutions open, Bitcoin has responded to its critics in every major event this year and some believe this is just the beginning.

The launch of Bitcoin futures on December 10, which will allow for the first time investors to enter the Bitcoin market through a regulated US exchange, means that we are just getting started.

What makes Bitcoins so valuable is a limited amount in existence. There will only be a maximum of $ 21 million of Bitcoins, and unlike regular banknotes, you can't print more of them whenever you want. This is because Bitcoin proves the working protocol: in order to create it, you have to extract it using computer processing power to solve the complex algorithms on the Bitcoin blockchain. Once this is done, you are rewarded by Bitcoin as a payment for your "work". Unfortunately, the reward you get for mining has dropped dramatically almost every year since Bitcoin was created, which means that for most people the only valid way to get Bitcoin is to buy it from the stock exchange. At current price levels, is this risk worth the risk?

Many believe Bitcoin is just a bubble. I talked to cryptocurrency expert and long-term investor Duke Randall who believes the value of the assets is overrated, "I will compare this to many supply and demand bubbles throughout history like Dutch Tulip Mania and dot com bubble in the late nineties. Prices are pure speculation based on that, and when you look To Bitcoin’s function as a real coin, it's almost embarrassing. ”For those who don't know, the dot com bubble was a period between 1997-2001 where many internet companies were established and given surprisingly optimistic ratings based on speculation that later fell by 80- 90% as the bubble started to crumble in early 2000. Some evil Data, such as eBay and Amazon, recovered and now stands significantly higher than those evaluations, but for other companies, the end of the line.

Bitcoin was originally created to take over the power of our financial systems and put people in control of their own money, get rid of the average man and enable peer-to-peer transactions. However, it is now one of the slowest cryptocurrencies on the market, and its transaction speed is four times slower than the fifth largest cryptocurrency and its closest competitor to Litecoin payment solutions. An untraceable privacy coin makes Monero transactions faster, having an average reservation period of just two minutes, and a fifth of the time Bitcoin can do, and this is without revealing your identity. Ethereum, the world's second largest cryptocurrency, has higher transaction volume than Bitcoin although its value is only $ 676 per ether compared to Bitcoin $ 16,726 per Bitcoin.

So why is the Bitcoin value so high? Duke Randall asked the same question. "It all goes back to the same supply and demand economics, relatively speaking, there aren't many Bitcoin currencies, and the recent price hike has attracted a lot of media attention, and this is coupled with the launch of Bitcoin futures contracts that many see as the first sign of bitcoins being accepted by the market." Mass, which has led to a lot of people jumping on the cart for financial gain, and like any other asset, when there is higher demand for purchase compared to selling, the price is going up, and this is bad because these new investors enter the market without understanding the blockchain and the basic principles of these currencies Which means it will probably happen Burn it.

Another reason is that Bitcoin currencies are very volatile, as they have been known to swing or drop thousands of dollars in less than a minute, and that if you are not used to it and don't expect it, it leads to the fear of less experienced investors selling, which leads to a loss. This is another reason why Bitcoin will have difficulty adopting it as a method of payment. Bitcoin price can move significantly between the time sellers accept bitcoins from clients and sell them on the exchanges in their local currencies. This wrong move can completely wipe out its profitability. Will this instability disappear soon? Unlikely: Bitcoin is a relatively new asset class and despite increased awareness, a very small percentage of the world's population holds Bitcoin. Until it becomes more widely distributed and its liquidity improves greatly, volatility will continue.

So if bitcoin is largely useless as an actual currency, what are its applications? Many believe that Bitcoin has gone from being a viable payment method to becoming a valuable store. Bitcoin is similar to "digital gold" and will simply be used as a benchmark for cryptocurate and other blockchain projects to be measured and traded. Lately, there have been stories of people in countries with high inflation rates like Zimbabwe buying Bitcoin in order to stick to the wealth they own instead of seeing its value drop under the weight of its central banking system.

Is it too late to get involved in Bitcoin? If you believe in what these cryptocurrencies will do for the world, it is never time to participate, but as Bitcoin's cost rises to a great extent, it becomes a boat for some who really sailed. You might be better off looking at Litecoin, up 6908% for this year or Ethereum, which has increased incredibly 7521% for this year. These newer and faster currencies hope to achieve what Bitcoin did for the first time to recreate it in 2009 and replace government banknotes.

Who knows what the price of these currencies is after ten or fifteen or even twenty years from now? One thing is certain though, we connect ourselves better because it will be a road trip.

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