Bitcoin is the first major application of a revolutionary technology called “blockchain.” Blockchain is the real magic behind Bitcoin. It’s why Bitcoin has exploded in price (under $1 in 2009 to $8000 in 2017).
Blockchain tech has the potential to change the way our economy works. I’m talking about the very fundamental parts of our economy. It will change the banking system, it will change health care, it will change law and accounting, and it will change the way we transact value across the world.
Bitcoin represents the value of the Blockchain in terms of dollars. From an investment perspective, it’s the perfect way to invest in this new technology.
Many people have likened this revolutionary shift to the dot-com boom in the 1990s. And in the same way the internet changed how we trade information, the blockchain will change the way we see and trade value.
Here is a video that explains Bitcoin/Blockchain in depth.
Is it risky?
Bitcoin is a cryptocurrency. Cryptocurrencies are very volatile. Since Bitcoin has been around the longest, it is actually the least volatile of all of the cryptocurrencies. So, yes it’s risky, but it’s the least risky of its class.
Usually, when you accept more risk, you also accept a greater potential for reward. That’s how investing works. If you had invested $100 in Bitcoin in 2011, you would now have $482,666.67. I’d say that would have been worth the risk.
Another great thing about Bitcoin is that its supply is limited. This means that less and less coins are available each time a new one is created (through the process of mining). Bitcoin’s adoption is not slowing down; its demand keeps rising. Simply economics tells us that as demand increases, price increases. There’s no reason that Bitcoin can’t keep increasing.
Is it used for criminal activity?
Because of the anonymous nature of Bitcoin (it doesn’t require an identity to be attached to it like bank accounts) criminals found it to be very useful for illegal transactions. The “darknet” website “Silk Road” used bitcoin in all its transactions, and when the media got ahold of the story, they framed Bitcoin as a shady thing.
In reality, Bitcoin is neither dirty or clean. It’s simply a currency; it’s a way to transact value. Just like the dollar, it can be used for good or bad — it’s the person using the currency that decides its purpose.
Banks and financial institutions are now investing in Bitcoin. Not for shady dealings (well I hope not), but as an investment vehicle. Only now are people seeing Bitcoin and other cryptocurrencies for what they really are: an incredible innovation that will change our economy for the better.
What should I do?
I’d like to pass on a bit of advice I heard first from my friend Jeremy. Just take 1% of your savings (that you’d be willing to live without) and invest it into Bitcoin. Don’t touch it for 3 years. If Bitcoin continues its growth, you’ll be a very happy person when you look at your balance. If Bitcoin falls on its face then big deal, you lost 1% of your money.
Also, find other ways to be involved in this economic revolution. Go to crypto-related community events, trade Bitcoin and other cryptocurrencies, read books about it, or if you’re ambitious try setting up a Bitcoin ATM!
To conclude, cryptocurrencies are here to stay, and you should get involved. You’ll thank me later.