Bitcoin: Is It All Typed?

If you spent $ 27 on Bitcoin when Satoshi Nakamoto did it in 2009 your investment would have reached the amount of $ 37,000,000.

Recognized as the most popular investment vehicle of all time, Bitcoin saw a meteoric rise in 2017 from $ 777 to $ 17,000.

Making millionaires out of opportunistic investors and leaving financial institutions open, Bitcoin has responded to its critics at every milestone this year and some believe it’s just the beginning.

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

What makes Bitcoin important is that there is a final amount to be had. There are a maximum of 21 million Bitcoins and unlike normal fiat currencies you cannot print more of them whenever you want. This is because Bitcoin runs a proven protocol at work: in order to do this, you need to use it with computer processing power to solve complex Bitcoin blockchain algorithms. Once this is achieved, you will be rewarded with Bitcoin as compensation for the “work” you have done. Let’s face it the reward you get for mining has dropped dramatically almost every year since Bitcoin started, which means that for most people the only possible way to get Bitcoin is to buy it instead. At the current price level is a risk worth taking?

Many believe that Bitcoin is simply a bubble. I spoke to cryptocurrency expert and senior investor Duke Randal who thinks assets are overvalued, “I would compare it to a lot of supplies and ask for historical bubbles like Dutch Tulip Mania and the dot com bubble of late about 90. Prices are purely speculative. based, and if you look at Bitcoin’s functionality as a real currency it’s almost embarrassing. ”For those who don’t know, the dot com bubble is a time in between in 1997-2001 where many internet companies were established and given more optimistic estimates based on the pure assumption that it later fell 80-90% as the bubble started to collapse early. 2000s. Some companies like eBay and Amazon, have recovered and are now sitting high on estimates but for others it is the end of the line.

Bitcoin was originally created to take power out of our financial systems and put people in control of their own money, cut the middle man and make transactions of the same age. However, it is currently one of the slowest cryptocurrencies on the market, the transaction speed four times slower than the fifth most popular cryptocurrency and the closest competitor to payment solutions Litecoin. Undetectable privacy coin Monero makes transactions much easier, boasts an average blocking time of just two minutes, a fifth of the time it can be made with Bitcoin, and that’s nameless . The world’s second largest cryptocurrency, Ethereum, has a higher transaction volume than Bitcoin even though the cost is $ 676 dollars per Ether compared to $ 16,726 in Bitcoin per Bitcoin.

So why is the value of Bitcoin so high? I also asked Duke Randal the same question. “Everything is back to the same supply and demand economics, Bitcoin is relatively unusable and the recent price surge has attracted a lot of media attention, along with the launch of the future of Bitcoin which was seen by many as the first sign Bitcoin is being accepted in the mass market, resulting in many people jumping on the road for financial gain.Like any property, if there is a higher demand to buy than to sell, the price will go up.This is not good because for it is new investors coming into the market who do not understand the blockchain and the underlying principles of these currencies which means they will burn ”

Another reason is that Bitcoin is more volatile, known to swing or drop thousands of dollars in less than a minute which if you’re not used to or expecting it, cause of less experienced investors who panic to sell, resulting in a loss. This is another reason that Bitcoin will struggle to cope as a payment type. The price of Bitcoin can fluctuate significantly between the time vendors accept Bitcoin from customers and sell it at exchanges for their local currency. This unhealthy movement can wipe out their entire profit. Will this instability disappear immediately? Not likely: Bitcoin is a new class of assets and even as knowledge grows, only a very small percentage of the world’s population owns Bitcoin. Until it becomes more widely distributed and its fluidity is better, the persistence of the injury will continue.

So if Bitcoin is useless as a real currency, what are its applications? Many believe that Bitcoin has moved from a viable form of payment to becoming a store with value. Bitcoin is like “digital gold” and is simple to use as a benchmark for other cryptocurrencies and blockchain projects to scale against and sell. Recently there have been stories of people in high inflation countries like Zimbabwe buying Bitcoin to keep what wealth they have rather than seeing its value decline under the deprivation of the central system. bank.

Is it too late to join Bitcoin? If you believe in what these cryptocurrencies will do for the world it’s never too late to get involved, but at the cost of Bitcoin being so high it’s a boat for some who are already sailing. You might be better off looking at Litecoin, up 6908% for the year or Ethereum up 7521% for the year. These newer, fastest-growing currencies hope to achieve what Bitcoin was originally set to do back in its inception in 2009 and replace government-run fiat currencies.

Who knows what the price of these currencies will be ten, fifteen or even twenty years from now? One thing is for sure though, we better tie ourselves up because it’s going to be a wild ride.