If you spent $ 27 on bitcoin when it was created by Satoshi Nakamoto in 2009, your investment would now be worth more than $ 37,000,000.
Bitcoin, widely considered the largest investment machine of all time, saw meteorite growth in 2017 from $ 777 to $ 17,000.
Creating millionaires from opportunistic investors and abandoning financial institutions, Bitcoin has responded to its critics at every possible event this year, with some believing this is just the beginning.
The launch of Bitcoin futures on December 10, which will allow investors to enter the Bitcoin market for the first time through the major US regulated stock exchange, suggests that we are just getting started.
Bitcoin is so valuable that it exists in limited quantities. When there will be a maximum of 21 million bitcoins, unlike regular fiat currencies, you can not just print more of them whenever you want. This is due to the fact that bitcoin works on a working protocol. To create it, you need to extract it using the power of computer processing to solve complex algorithms on the Bitcoin blockchain. When you get it, you are rewarded with Bitcoin as a payment for your “work”. Unfortunately, the rewards you get for mining have plummeted almost every year since Bitcoin was founded, which means that for most people, the only viable way to get Bitcoin is to buy it on the stock exchange. Is it worth the risk at current price levels?
Many people think that Bitcoin is just a bubble. I spoke with Duke Randall, a cryptocurrency expert and long-term investor who thinks the asset is overvalued. “I would compare it to the supply-demand bubbles of many times in history, such as the Dutch tulip mania, the late-90s point bubble. Prices are just speculations. based on և when you look at the functionality of bitcoin as a real currency, it’s almost embarrassing. ” For those who do not know, the dot com bubble was the period between 1997-2001, when many Internet companies were created and received terribly optimistic ratings based on net speculation, which later fell by 80-90% as the bubble began to collapse. at the beginning. 2000s Some companies, such as eBay և Amazon, have recovered և are now much higher than those estimates, but for others it was the end of the line.
Bitcoin was originally created to seize power from our financial systems, to put people in control of their own money, by cutting off the average person, by allowing them to do business with partners. However, it is now one of the slowest cryptocurrencies on the market, with transactions four times slower than the fifth largest cryptocurrency Lite Litecoin’s nearest competitor in payment solutions. Monero, the undisputed coin of secrecy, makes transactions faster, boasting that the average blocking time is just two minutes, one-fifth of the time Bitcoin can do it – without anonymity. The world’s second largest cryptocurrency, Ethereum, already has more transactions than bitcoin, although it is valued at only $ 676 per air, compared to $ 16,726 per bitcoin.
So why is Bitcoin so expensive? I asked the same question to Duke Randall. “Everything goes back to the same supply-demand economy, bitcoin is relatively unavailable, and its recent rise in prices has caught the attention of the media, coupled with the launch of bitcoin futures, which many see as the first sign. Bitcoin is gaining traction in the mass market, which has led many people to jump for financial gain. Like any asset, when there is more demand to buy than to sell, the price goes up. “This is bad because new investors are entering the market without understanding the blockchain, the principles behind these currencies, which means they are likely to burn out.”
Another reason Bitcoin is so volatile is that it is known to rise or fall by thousands of dollars in less than a minute, which, if you’re not used to it, makes less experienced investors panic about selling. which causes damage. This is one of the reasons why Bitcoin will struggle to be accepted as a payment method. The price of bitcoin can fluctuate significantly between the time sellers accept bitcoin from customers and sell it in their local currency exchanges. This irregular movement can erase all their profitability. Will this instability disappear soon? Bitcoin is a relatively new asset class, and although awareness is growing, only a very small percentage of the world’s population owns bitcoin. Until it becomes more widespread, liquidity has improved significantly, and instability will continue.
So, if Bitcoin as a real currency is quite useless, then what are its uses? Many believe that Bitcoin has moved from a viable payment hive to a store of value. Bitcoin is like “digital gold” – it will just be used as a guide for other cryptocurrencies – blockchain projects that need to be measured and sold. There have been recent reports that people in high-inflation-prone countries such as Zimbabwe have bought bitcoins to preserve their wealth rather than see it depreciate due to the recklessness of the central banking system.
Is it too late to get involved with bitcoin? If you believe in what these cryptocurrencies will do for the world, it’s never too late to get involved, but because Bitcoin’s value is so high, it’s a boat for some who have already navigated. It would be better to look at Litecoin, which has grown by 6908% per year, or Ethereum, which has grown by an incredible 7521% over the year. These newer, faster currencies are hoping to achieve what Bitcoin first undertook in its inception in 2009 – replacing the government-run Fiat currencies.
Who knows what the price of these currencies will be in ten, fifteen or even twenty years? However, one thing is for sure, we better connect with ourselves as it will be a wild walk.