If you have invested just a hundred USD into bitcoin in 2010, you could have made almost 2 million dollars. You could have become a millionaire just with a hundred dollars, maybe a billionaire with a couple of thousands of dollars. And there are people who made fortune out of it! A lot of people are wondering if they still should invest in bitcoin, is it too late or there is a still fortune to be made and Cryptocurrency investment.
So, What Is Bitcoin?
What is bitcoin in the first place and how exactly it works .for much of history we have used Gold, silver and some other metals as a form of currency but the most famous of them was gold? In fact, it was a used until 1971.And that’s pretty much the reason why we have bitcoin today and why we invest in bitcoin, we have been using paper money for centuries. But it was different then because it was backed by gold. That means that every dollar used to represent a certain amount of gold in the bank. So instead of carrying a pack of gold with you every time, you could simply carry paper sand get your gold anytime you want. In other words, you can’t simply print money like governments do today, unless you have gold to back it with. And that’s where the problem started. Right after the second world war, United States dollar became an international currency because United States had 70% of all the gold, so they could print more money than anyone else. But Unfortunately United states printed more money than the amount of gold they had, so when other countries requested US to exchange their dollars with gold.US simply replied, oops sorry, we no longer exchange dollars for gold because we have printed more than we have, and that’s what happened in 1971.And since then, our money is simple a piece of paper that doesn’t have real value and the people in power can print as much as they want and that’s why prices increase every year. But it didn’t stop there, it crushed the whole economy in 2008, they printed more money, United States alone printed almost 4 trillion dollars. And that’s the basic problem with paper money we use right now. Its centralized, controlled by a small group of people and it can be easily created out of thin air So a guy named Satoshi Nakamoto came out with a new currency that is decentralized because its controlled by everyone who is in the network, not even the government and it cannot be created out of thin air, in fact, limited amount of them exists like gold and named it bitcoin So lets find out how exactly it works.
How Bitcoin Works / Is This Safe?
Bitcoin woks on a technology that’s called blockchain, it’s pretty complicated to understand but here is a simplified version. Everything on internet is a copy of the original. So its impossible to create a digital currency because you can simply just copy it. And that’s what blockchain is for. Everyone in the network can see how every bitcoin moves from one persons to another or someone invest in bitcoin. In fact you can see the entire history of each coin once you join the network. So if anyone tries to corrupt the system, the entire network will find that out immediately and reject it. Therefore, its almost impossible to cheat. All the new transactions are collected into a block and a new block is created every 10minutes and all of these blocks are connected to each other and that’s why its called blockchain. But no matter how advanced is this technology, it still can be hacked, Every new block beside recording new transactions, also includes all the transactions that have ever been in the history of the network and for the system to recognize a block, it must match all the other blocks that have ever been created in the network, in fact it also has to match the next block that will be created in the next 10 minutes and all the future blocks. On the top of that, every single block and every single transaction has an advanced cryptography and if a new block will be added that doesn’t match all the other blocks that has been created previously and will be created in the future, the cryptography in every single of them changes, which makes it even easier to know the corrupted block. And this makes it almost impossible to hack, not because no one knows how to do it, but rather the computer power that’s needed to do that should be bigger than the entire network which consists of millions of users. And the bigger the system grows, the more secure it gets. So if you want to send money, you don’t have to go to a bank or any third party but rather you can do it at your finger tips. Especially when it comes to sending money to another country, you don’t have to wait for days for the bank to do, but rather wait for 10 minutes once a new block is created.
Should you invest in Bitcoin?
The answer is yes and NO! Yes because, Obviously, it seems like that’s the future of our money, but Invest in bitcoin or in Cryptocurrency investment. isn’t the only cryptocurrency out there, there are also Ethereum, litecoin and others and others for Cryptocurrency investment. But bitcoin is the one that’s growing the fastest. And that is the problem, just since January of this year, it has grown from less than a thousand dollars to over 10K and anything that’s growing too fast will eventually collapse and come back to its real value. But we don’t know how far it will go, it might go to 20, 25 or 100 thousand before it collapses so you have to make your own research before you invest in bitcoin
Is bitcoin is going to be the future currency of the world or its just a hype that is going to disappear after a while. but there are others coin too for Cryptocurrency investment.
The Bitcoin Crash Explained
Bitcoin has just crashed that it’s a bubble yet they won’t tell you about the other bubbles like 20 trillion dollars worth of debt that the United States federal government has accumulated as a result of mis management and trillion dollar bailouts .if you believe the main stream media you would have never touched Bitcoin in 2013 and you never would have seen the kinds of returns that you’ve read about on the news in fact if you would have taken $100 and bet on Bitcoin 2013 or earlier you’d have over a hundred million dollars today . Bitcoin just crashed is it a bubble is it the end of the world like the main stream media says or is there something else going on here .The greatest opportunity of a lifetime and you’ve just been given a gift . it’s kind of like looking at a piece of real estate you looked at it yesterday this lovely home it’s got a great lots of great property but you just can’t afford it maybe it’s 300 thousand bucks and you can’t afford the mortgage all of a sudden it’s at a fire sale 50% off that same house that you love that you want to move in with your family and raise your kids is now hundred and fifty grand and it’s the same piece of property imagine if you would have bought tech stocks after the crash of 2001 companies like Amazon Google Facebook Tesla Microsoft these companies are some of the biggest companies on planet Earth today . Jeff Bezos spends most of his time flying off in rockets he’s now the wealthiest man on planet earth you know in 2008 . Media is saying don’t touch Bitcoin it’s a bubble it’s a fraud and now it’s crashed funny thing is if you look at the historical track record nothing’s changed fact bitcoin has had multiple retracements of 50% or greater sometimes 80% all along its long-term curve in fact if you would have just bet on Bitcoin 12 months ago even still with this 50 percent retracement you would have made nearly a thousand percent return on your money
Why Bitcoin Crashed :
Bitcoin crashing from the 19,800 down there to 6500 in a matter of weeks. The real reason is that savvy investors took profits all thy way up in order to make it down so they can enter again and make sure that all the people who lost the opportunity to invest in bitcoin can take the opportunity to buy. THE PROBLEM is that most of the people who sees this kind of volatility get scared so they do not enter so they lose the opportunity given from the top investors. Said that we have to consider that is almost touching the 10K $ back. And it will double the top price it reached this year. That means that we can see a bitcoin price touching 40.000USD in 2018.
Invest in bitcoins
Do your own research and make your own investing decisions but there are a few major concerns with Bitcoin and for Cryptocurrency investment.
Number one is the lack of regulation and the anonymity
The argument is that because Bitcoin is largely used on the deep web and as a black market currency, there’s concern that if there are enough people using it for things like buying illegal firearms, and people use Fiat currency to do this all the time. But it seems like Bitcoin they have a target on their back just because of the media. They get a hold of it and they start talking about how Bitcoin is being used for illegal activities. If enough of this is going on, what if our government steps in and forces regulation on this. At that point, what if there is not the same amount of anonymity? That could defeat the whole purpose of Bitcoin and the underlying value of these bitcoins could plummet as a result. This is just an argument people have had.
Number two, does this abrupt appreciation in Bitcoin value indicate a speculative bubble?
So for those of you who are familiar with the dotcom bubble, when everyone was buying internet stocks left and right and they were just flying sky high in value and then we reached a tipping point where the value was being propped up on stilts and speculation, and there was nothing backing that value, prices plummeted at that point. There’s a lot of people who are worried that the value of Bitcoin has appreciated so rapidly that we’ve reached the speculative bubble status to the point where this is a bubble that at some point is going to burst and people are going to lose a lot of money. This is just another argument people have or are concerned with Bitcoin is it really did appreciate in value at a staggering rate.
Number three is the fact that Bitcoin really is not a functional currency.
The value is so volatile, there’s no way to ever say okay, if you go to Starbucks, a Starbucks cup of coffee is going to cost you .0001 bitcoin and the value so if that price makes sense. But because bitcoin is so volatile you’ll see multiple percentage price swings per day, there’s no way to set a value of something, a physical good, in Bitcoin, because it fluctuates so frequently. So you would have to consider what that good costs in a Fiat currency and then what the Bitcoin is valued at based on that Fiat currency, and then basically use that method to be able to buy something.The Bitcoin value fluctuates so frequently and it’s very volatile compared to looking at the value of other Fiat currencies. It has drastic price swings. So unless it ever balances out, it can never really be used as a functional currency as we use Fiat currency today.
How to invest in Bitcoin and Cryptocurrency investment
It’s very simple. All you have to do is physically buy the coins for Cryptocurrency investment. lot of people have seen like Bitcoin exchanges. There is a exchange traded fund on the stock exchange where you can actually invest in a fund that owns Bitcoins, You would have to spend or pay $4,000 worth of shares of this ETF in order to get exposure to $2,000 worth of bitcoin. So that’s just insane especially because it’s so easy to actually buy physical bitcoins. So if you are someone who wants to invest in Bitcoin or Cryptocurrency investment, two ways to do it.
Number one is a Bitcoin buy/sell marketplace. And the one people use is Coinbase. This is, the only problem with this is the fact that they don’t actually hold the coins themselves. They basically source the coins when you go to buy them so if you wanna buy bitcoins you have to go on Coinbase and basically order those coins and they’re going to source them from a seller or do cryptocurrency investment. So the issue with that is during drastic price moves, there’s low liquidity. So let’s say the bitcoin was way up in value ,I know most people would say buy, so if you were looking to sell when it was way up in value you probably wouldn’t have an issue. If you were looking to buy when it’s way up in value, which is a bad strategy, if you were looking to do that, you might have issues with Coinbase because they have to source those coins and if there are thousands of people trying to buy them at once, they may not be able to source those coins. Or, if Bitcoins fall drastically in value and people are still doing the wrong thing, selling while they’re down in value, there may be so many people trying to sell them at once that there is a bottleneck and there is poor liquidity. If you’re somebody that’s trying to buy bitcoins, But if you’re looking to trade in and out of Bitcoins and trade the price swings .Bitcoin exchange where basically you’re buying and selling to other bitcoin buyers and sellers or invest in bitcoin ,cryptocurrency investment and the exchange, essentially, just facilitates those transactions for a fee. So that way you’ll have much higher liquidity, and you can pretty much buy and sell as you need to without worrying about having issues with order fulfillment.
Bitcoin investment strategies
1) Invest for the long-term when the price is still cheap.
2) Trade the big volatility if you have any experience. (If not we will son share good strategies in Cryptocynews.com)
3) Hold – where traders buy and hold coins for the long term, riding out the volatile movements
4) Day trading – where traders analyze the market, the charts and news to trade in and out of coins
5) Take small punts on small and interesting coins which have significant growth opportunity.
7) Take money off the table, 5% for each 25% up, back in to FIAT money.