If you spent ২ 227 on Bitcoin, when it was created by Satoshi Nakamoto in 200 Sat, your investment would be worth more than 37 37,00,000.
Widely regarded as the greatest investment vehicle of all time, Bitcoin saw a meteor rise in 2017 from 77 777 to 17 17,000.
Making millionaires from opportunistic investors and leaving financial institutions open, Bitcoin has responded to its critics with every milestone this year and some think it’s 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 a major regulated US exchange, indicates that we are barely starting.
What makes Bitcoin so valuable is a limited amount of existence. There will only be a maximum of 21 million bitcoins and you will not be able to print more whenever you want as opposed to the usual Fiat currency. This is because Bitcoin works according to the protocol: to create it, you have to mine it using computer processing power to solve the complex algorithm of Bitcoin blockchain. Once this is achieved, you are rewarded with Bitcoin as a payment for your “work”. Unfortunately the rewards you get for mining have dropped drastically almost every year since the inception of Bitcoin, which means that for most people the only effective way to get Bitcoin is to buy an exchange. Is it worth the risk at the current price level?
Many people believe that Bitcoin is just a bubble. I spoke with Duke Randall, a cryptocurrency expert and long-term investor who thinks the asset is extra valuable. When you look at the effectiveness of Bitcoin as a real currency, it’s almost embarrassing. It later declined by 80-90% as bubbles began to break in the early 2000s. Some companies like eBay and Amazon have recovered and are now far above that assessment but for others it was the end of the line.
Bitcoin was originally created to take power out of our financial system and keep people in control of their own money, cut off the middle class and make peer-to-peer transactions. However, it is now the slowest cryptocurrency on the market, its transaction speed is four times slower than the fifth largest cryptocurrency and its closest competitor for payment solution Lightcoin. Attractable Privacy Coin makes Monero transactions faster, boasting an average block time of just two minutes, Bitcoin can do this one-fifth of it and it does so without revealing the name. Ethereum, the world’s second-largest cryptocurrency, already has a higher transaction volume than Bitcoin, although Bitcoin is only $ 676 per ether, compared to, 16,726 per bitcoin.
So why is the value of Bitcoin so high? I asked Duke Randall the same question. “It’s all back to the same supply and demand economy. Bitcoin is relatively scarce there and its recent price has attracted a lot of media attention. As a result, many people have jumped into the bandwagon for financial gain. Like any asset, when the demand to buy is higher than the price, the price goes up. Is likely to go “.
Another reason is that Bitcoin is highly volatile, it is known to be able to make thousands of dollars up or down in less than a minute which if you don’t use or expect, causes panic sales to less experienced investors, resulting in losses. This is another reason why Bitcoin has to struggle to be accepted as a payment method. The price of bitcoin can move significantly when sellers receive bitcoin from customers and sell it in exchange for their local currency. This irregular movement can wipe out their entire profitability. Will this instability go away soon? Not likely: Bitcoin is a relatively new asset class and although awareness is growing, very few percent of the world’s population hold Bitcoin. As long as it is more widely distributed and its liquidity is significantly improved, instability will continue.
So if Bitcoin is quite useless as a real currency, what are its applications? Many believe that Bitcoin has become a valuable store of money to be an effective method of payment. Bitcoin is like “digital gold” and will be used as a benchmark for measuring and trading other cryptocurrencies and blockchain projects. Recently there have been stories of people buying bitcoin in high inflation countries like Zimbabwe so that they can not only hold on to their wealth but also see its value fall under the recklessness of its central banking system.
Is it too late to get involved in Bitcoin? It’s never too late to get involved if you believe what these cryptocurrencies will do for the world, but because the price of Bitcoin is so high it’s a boat for some people who have already sailed. You might be better off looking at Lightcoin, 6908% for the year or Ethereum which is incredible 7521% for the year. These new, faster currencies are expected to replace Bitcoin 200 in 2009 and replace the government-run Fiat currency.
Who knows the price of this coin will be ten, fifteen or even twenty years from now? One thing is for sure though, we embrace ourselves better because it’s going to be a wild journey.