What is Bitcoin? Should You Invest in Bitcoin?

Should you invest in bitcoin

Bitcoin is currently one of the hottest and trending topic all over the world. With all the information being published and shared about Bitcoin all over the Internet, people are flocking everywhere to buy this digital asset hoping for its value to increase.

But, what is Bitcoin specifically? Should you invest in Bitcoin?

First, let’s talk about cryptocurrency.

What is cryptocurrency?

Cryptocurrency

Cryptocurrency is a digital currency that is secured and protected by what we call cryptography, which makes it difficult for highly-skilled hackers to hack the system. Most cryptocurrencies are decentralized and most importantly, cryptocurrencies are not issued by central authorities but instead they are controlled by people who own them.

Bitcoin is the first-ever cryptocurrency created by an anonymous person. It all started in the year 2019 with almost zero value but as time goes by, its value started to skyrocket until now. So, what is bitcoin in the first place?

What is Bitcoin?

Bitcoin

 

Bitcoin is the most popular, most valuable, and world’s largest cryptocurrency by market capitalization.

Bitcoin is a type of currency where the balances of bitcoin tokens are kept in a public and private keys, which are long strings of numbers and letters linked through the mathematical encryption algorithm that was used to create them.

Think of the public key as a bank account number and ATM PIN for private key. Your public key serves as the address where you will be receiving or sending bitcoins while the private key is used to avoid any fraudulent bitcoin transactions.

Additionally, Bitcoin is a revolutionary technology that enables a new way to send payment over the Internet. You can think of it as an open accounting system where thousands of computers all over the world work together to track ownership of digital tokens called bitcoins.

When you send someone bitcoins, the transaction is broadcast to the entire network. After its’s verified, it is recorded in a public ledger called the blockchain.

Blockchain

The blockchain contains a record of every bitcoin transaction that has occurred since the system began and it’s shared and maintained on the network so everyone keeps the books.

Most currencies are issued by a central authority that controls the money supply. On the other hand, bitcoin is a peer-to-peer system so there is no central authority. Instead, bitcoins are issued to users who help process transactions in the network. This is known as bitcoin mining.

Bitcoin miners are specialized computers that do the work required to verify and record transactions in the blockchain. As a reward for their work, the miners earn bitcoins and this is how bitcoins are released into circulation.

 

The system is programmed so that only 21 million bitcoins will ever exist and as time goes by, the mining reward decreases. The result is a predictable supply that is governed by scarcity making bitcoin somewhat like a digital gold.

It’s the first currency of the Internet and everyone is free to use it. With bitcoin, you can send any amount of money to anyone anywhere in the world as easily as sending an email.

How Many Bitcoins are there?

As of January 10, 2021 at 3:11 PM, there are 18,595,375 bitcoins. This number changes about every 10 minutes when new blocks are mined.

Brief History of Bitcoin

 

On October 31, 2008, there was a Japanese person named Satoshi Nakamoto, who made a huge announcement on The Cryptography Mailing list at metzdowd.com. This is what the email contain: “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.”

On January 3, 2009, the first ever bitcoin block is mined and is known as “genesis block” and contains a text: “The times 03/Jan/2009 Chancellor on brink of second bailout for banks.”

On January 8, 2009, the first version of Bitcoin software is announced on The Cryptography Mailing List.

On January 9, 2009, Block 1 is mined and then Bitcoin mining started.

How to acquire Bitcoins?

If you’re very interested in owning a bitcoin, there are three basic easy ways you can do to get a bitcoin.

1. Buy Bitcoin using an exchange platform

You can easily and instantly buy bitcoin on marketplaces or bitcoin exchanges such as Coinbase, one of the leading cryptocurrency exchange. You can use your debit or credit card or other methods to instantly buy bitcoin.

2. Mine bitcoins using a computer

Bitcoin mining

Another way of owning bitcoins is by mining them on your computer. However, mining bitcoin on a computer is not as easy as you think. Other bitcoin miners reported that mining bitcoin can damage the entire computer due to overheating and other technical-related issues.

But, there are computers whose expertise is to mine bitcoins just like 21 Bitcoin Computer. It has native hardware and software that supports Bitcoin protocol so you should consider purchasing a new computer if you’re serious in earning bitcoins.

3. Transfers

You can acquire bitcoins by asking someone whether a friend, cousin or loved ones to transfer bitcoin to you using your wallet address or by scanning your QR code.

Where to buy Bitcoin?

As of now, there’s a lot of platforms where you can buy bitcoins.

Here’s the list of legitimate platforms to buy bitcoin in 2021:

Coinbase

Coinbase is undeniably the biggest Bitcoin platform where you can easily buy and sell bitcoin. Aside of Bitcoin, it also supports other cryptocurrencies such as Ethereum, Litecoin and Bitcoin Cash.

Binance

Binance is also one of the best platform to buy and sell bitcoin. Just like Coinbase, it supports other cryptocurrencies such as Ethereum, Ripple, ICON, Bitcoin Cash, Litecoin and their own cryptocurrency named Binance Coin (BNB). In this single platform, you can trade cryptocurrencies at a low cost.

Coins.ph

Coins.ph is one of the largest e-wallet mobile app in the Philippines. It’s difference from other e-wallets like Gcash and Paymaya is that it allows you to buy and sell Bitcoin. It also supports other cryptocurrencies namely Ripple (XRP) and Ethereum (ETH). But, I don’t highly recommend Coins.ph to those who are planning to buy Bitcoin on the platform because of its high fees.

PDAX

PDAX is one of the best platform to buy and sell bitcoins in the Philippines. It is regulated by BSP and it also allows you to purchase other cryptocurrencies such as Ethereum, Ripple, and other digital currencies. With PDAX, you can trade cryptocurrencies at low cost and no hidden charges.

Why do people buy Bitcoins?

what is bitcoin

The main two reasons why people acquire bitcoin is for them to diversify their investment and of course, for them to grow their money and build massive wealth by just investing or trading bitcoin.

Is Bitcoin safe and secure?

Bitcoin is a 100% safe and secure but in terms of putting your money in Bitcoin as a form of investment, you’re willing to take the risk of losing your money. Take note that Bitcoin is highly volatile so invest only the amount you are willing to lose.

Bitcoin Price History

On July 2010, one Bitcoin started trading at around $0.0008 to $0.08.

On the year 2013, the price of Bitcoin started to rise. It started at around $13.50 per bitcoin and in the early April 2013, bitcoin price skyrocketed to $220 but in the middle of the month, it went down to $70. But, in the month of November, the price went up to $1,075 from $200. The rapid increase of Bitcoin price forced the people all over the world to purchase the digital currency.

October 23, 2015, there was a massive spike on Bitcoin price. Bitcoin went from around $275 to $460 on November 4. At the end of the month, Bitcoin was traded at around $360.

October 2017, the price of Bitcoin began to skyrocket again. It reached $5,000 and doubled again in November to $10,000. Then, on December 17, the price of Bitcoin reached $19,783. But, on April 2018, the price of Bitcoin went down again to below $7,000 and below $3,500 by November 2018.

January 4, 2019, Bitcoin is valued at $3,798 and in June 28, it went up to $11,865. At the end of the year 2019, December 27 respectively, Bitcoin is trading at around $7,300.42

January 1, 2021, the price of Bitcoin is around $28,994 and again climbed to $40,788.

As of January 10, 2021 at 2:04 PM, Bitcoin is valued at $40,571.10

How Much Will Be The Value Bitcoin in 2021?

According to Anthony Pompliano, one of the popular Bitcoin personality, founder and partner at Morgan Creek Capital, a crypto-friendly asset management firm for institutional investors, said that Bitcoin price can reach $100,000 by the end of December 2021.

How Much Will Be The Value of Bitcoin in 2030?

According to Jeremy Liew, a partner at Lightspeed Venture Partners and the first investor in the social media app Snapchat, Bitcoin price can realistically reach the price of $500,000 by 2030. His prediction of the Bitcoin price is also backed by Peter Smith, the CEO and co-founder of the world’s most popular Bitcoin wallet, Blockchain.

Should you Invest in Bitcoin?

invest in bitcoin

 

Bitcoin is a very volatile digital asset meaning you can lose your entire money or gain huge profits. No one can predict the future of bitcoin so always be knowledgeable on how bitcoin works because if you invest your whole money in Bitcoin without even knowing system, you’ll likely lose your investment. As Warren Buffett said, “Risk comes from not knowing what you’re doing.”

On my own perspective, investing in Bitcoin is one’s own decision because as mentioned above, it is very volatile. If you’re a very conservative investor, maybe you should look for other investments just like mutual funds, bonds, high interest savings accounts, and etc.

But, if you’re an aggressive investor who is willing to take risks, you should definitely try investing in Bitcoin. As they say, “Investing in an asset with the highest risk promises highest returns.”

Let me share to you my humble experience on investing in Bitcoin. Last January 5, 2021, I withdrew an amount from my savings account and invested it on Bitcoin. I know Bitcoin is highly volatile so I only invested the amount I’m willing to lose.

Just after three days, I tried to check my Bitcoin investment. After opening the app, I was so surprised on the balance reflected on my account. I thought there maybe a bug on the app so I refreshed the app almost ten times and the amount is still the same.

So, what I did next? I withdrew all my investment in Bitcoin because I felt greedy. At the end of the day, I felt very happy and never stopped smiling. Lesson learned: I wish I withdrew my entire savings and invested it on Bitcoin. I could be a millionaire now if I did that.

I learned my lesson so what I did next might surprise you. Last January 6, 2021, I withdrew my entire savings and invested the entire amount on Bitcoin. I don’t care if I lose any amount on the coming days because I planned to keep my Bitcoin investment for long term.

What I will be doing is to keep on buying Bitcoin every month so that I can increase the amount of Bitcoins I have. I’m interested to keep my Bitcoin investment for 5 years because I saw all over the news and articles that the price of Bitcoin is rising continuously. What if in the coming years it is valued at $50,000 per Bitcoin? I’m pretty sure I can be a millionaire if that happens. Hahaha

So, whoever you are reading this article, I encourage you to invest in Bitcoin now. Time is gold. Don’t waste the opportunity. Be willing to take risks and most importantly, invest your money instead of keeping it in a bank. I learned a lesson that saving is for losers so don’t be a loser. Don’t think twice. Just invest in Bitcoin and thank me later.

 

Other Popular Digital Cryptocurrencies

1.Ethereum (ETH)

Ethereum is created by a Russian-Canadian programmer named Vitaly Dmitriyevich Buterin. It was launched in the year 2014 and now, it is one of the biggest cryptocurrency by market capitalization. It is an open-source, decentralized, and blockchain-based cryptocurrency that features smart contract functionality.

2. Bitcoin Cash (BCH)

Bitcoin Cash is created by Craig Wright who claims to be the original Satoshi Nakamoto. It was created as a result of a hard fork with bitcoin in December 2017. Bitcoin Cash is fully decentralized and is considered to be the largest Bitcoin fork.

3. Ripple (XRP)

Ripple is a cryptocurrency created by Chris Larsen who is popularly known for co-founding several Silicon Valley tech startups. Unlike Bitcoin, XRP coins are not mined and it is overseen by a private company.

4. Litecoin (LTC)

Litecoin is a cryptocurrency created by Charlie Lee in the year 2011. It is a fully decentralized cryptocurrency that enables payments to anyone in the world. In addition, Litecoin is capable of handling higher transaction volume compared to Bitcoin (BTC). It supports more transactions without a need to modify the software in the future.

5. Tether (USDT)

Tether is a cryptocurrency that was created by three people named Brock Pierce, Craig Sellars, and Reeve Collins. It is blockchain-based and is known to be the world’s most popular stablecoin. It’s value is meant to mirror the value of the US Dollar.

References:

Andresen, Gavin. (2019, December 19). The Rise and Rise of Bitcoin| Documentary | Bitcoins | Blockchain | Crypto News | Digital Cash [Video]. Youtube. Retrieved January 10, 2021 from https://youtu.be/qk4gZrBR9CU see

Bitcoinprice.com

Buybitcoinworldwide.com

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