Bitcoin has gained immense buzz in the last few years. It has been heralded as the currency of the future, but not all people seem to believe it. There are yet many unanswered questions related to Bitcoin, and many people are unaware of what it is and how it works. This article will shortly discuss what bitcoin is and why you should start investing in it soon.
What is Bitcoin:
Bitcoin is electronic money, a kind of cryptocurrency that is autonomous from traditional banking. It means that this digital currency operates without any control of a bank or government, unlike traditional currency. It was created in January 2009 and is considered the best digital currency around.
How does it work:
As said earlier, Bitcoin is a digital currency; the system of bitcoin operates on digital platforms. The bitcoin system comprises a public ledger that records the bitcoin transactions and stores the copies on the servers around the world called nodes or miners. Every transaction is shared from node to node as the transaction information is broadcast to the network. These nodes are responsible for determining who owns which coins, like a traditional bank. The computers run bitcoin’s code, and the transactions are collected together into a block and are stored permanently to the blockchain. The mining process releases new bitcoins into circulation by solving mathematical problems and puzzles using supercomputers to discover a new block. These blocks are added to the blockchain.
The miners who verify the transactions on a network get rewarded with bitcoins, and new bitcoins are added to circulation. And any person can become a miner and get the rewards.
In simple words, Bitcoins depend on computer networks, nodes to execute and solve mathematical problems to verify and record the details of transactions.
Why you should invest in Bitcoin today:
1. Independence and flexibility:
One anomalous but certainly the best thing about Bitcoin, or any cryptocurrency, is that a body or an institution does not control them. Therefore, no one is accountable and obliged to follow a set of standard rules for transactions and conversion processes. Bitcoin is globally distributed, and no government is in charge to regulate its process. Therefore, it is more decentralized and independent, implying that there is no central system, server, or storage. This decentralized model of the currency makes it a viable and flexible option to invest in. It indicates that anyone can make the transaction without authorization or approval.
By investing in Bitcoin, you can buy, sell, and exchange fiat currency for it and vice versa. Also, it frees you from the extra charges that you have to pay banks in traditional banking. There are absolutely no factors that can hinder or control your trade and investment. But one thing to be aware of is choosing appropriate exchange while investing in the bitcoin.
2. The prices will go high:
As of March 2021, there were 70 million wallet users. Today around 1 Million users transact Bitcoin per day. Some data show that the transaction increased from 45 million in Jan 2020 to 65 million users in Jan 2021. It means that within 12 months, it exponentially skyrocketed with a 44% increase. With this pace of popularity gain, it is expected that almost everyone will soon jump to the bandwagon. As the demand and value of bitcoins will grow, the price of bitcoin will eventually increase. It is expected that soon all small and large businesses will switch to bitcoin to trade and invest. In this perspective, the significance value of Bitcoin will expand significantly. Therefore, it is advisable to invest in bitcoin today to reap the profits it will manifest in the future.
3. It is a volatile asset:
The 44% increase and the massive turnout in one year of the pandemic have taught us that the future belongs to digital currencies. Bitcoin has successfully gotten the attention of all, especially the youngsters, who eventually define the future. The spark of interest in youngsters has helped the crypto market has grown massively. It, in turn, has helped increase the liquidity of cryptocurrencies. By the liquidity of the bitcoin, it means its ability to be converted into other currencies.
Investing in bitcoin is very easy. It requires the users to buy some coins, wait for the prices to go up, and sell them for a good profit. Sometimes, you have to wait longer to sell the currency for a good price, and you eventually end up quitting with other cryptocurrencies. But that is not a problem with bitcoin. Its prices quickly move up and down, freeing you from the tension to wait for the golden time to hop in at a good price in a split second. As a result, you do not need to wait a lot that you are disgusted to sell bitcoin for a good price.
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4. More profit:
Everyones’ motive behind investing in bitcoin is quite clear: to become a millionaire overnight. Well, that is fairly true; although one cannot become a millionaire over the night, it is sure that bitcoin can lead to more profitability. You can earn bitcoin by mining or buying it and waiting to sell it when the prices get high. In this way, you can earn more than you can invest in buying a bitcoin.
However, taking help from trading sites can help to sell bitcoins at the best prices possible. These trading sites use AI systems to help sellers earn the highest possible profit out of their bitcoins. Bitcoin is the digital gold; the more you mine, the more you get and the more profit you can make. It is inevitable to avoid the allure of bitcoin; its growing value and significance make it a luxurious asset to have. Therefore, saving a few bitcoins is just like storing wealth. In this perspective, bitcoin is one of the valuable assets one can have today and in the future.
5. Most valuable cryptocurrency:
Only valuable currencies are usable, and there are six attributes of a valuable currency:
Bitcoin has all of the above six attributes that make it valuable. In fact, it is the most valuable cryptocurrency among all others around and even the fiat currency. One of the reasons for it is that it is more stable than other cryptocurrencies. Also, it is a more volatile asset, enhancing the buying and selling processes. Most importantly, Bitcoin is the most secure cryptocurrency among others on the market as it ensures the protection of its users. And, of course, the value of bitcoin is unmatchable by other cryptocurrencies.
6. It is becoming legitimized:
One major reservation that restricted many to invest in a cryptocurrency is the lack of endorsement from authoritative institutions. As a result, it is usually considered an illegal avenue to making money. Bitcoin is a decentralized currency, and no single government of the world possesses ownership of it. However, to use it commonly in daily life will require the permission of the governing bodies of a state. In that perspective, it is essential for bitcoin or any cryptocurrency to become legitimized.
Nevertheless, the potential and value of bitcoin seem to pass this threshold. Many big companies, industries, millionaires, and billionaires are investing in bitcoin and are transitioning to make regular payments in cryptocurrency. Also, there are a number of organizations that are thinking to open new departments for mining cryptocurrencies, including bitcoin.
As numerous big companies invest in bitcoin, it is expected to become more legitimate. The involvement of powerful industries and millionaires will ultimately lead to the regulation of the currency instead of disregarding it as illegal.
Bitcoin is now widely accepted and used instead of fiat currency in some institutions. It means that it is getting recognized as a usable currency and its trade as an industry. The wider it grows and allures potential industries, the more it will become legitimate. After getting regulated by different states, it will become a legal means of trade.
7. It is here to stay:
The future of Bitcoin is bright. With speed this field is advancing, especially in the last few years, it would be foolish to underestimate its worth and capacity. It is taking new leaps as more people, industries, and companies are attracted to its value and future prospects.
Bitcoin has hit the highest of all time this year, in 2021, and its progress is expected to continue in the following years until another potential currency devalues it. But as Erik Finman, the 19-year-old millionaire, says, it is not going to happen soon. Although Bitcoin is more volatile and its prices keep going up and down, no other cryptocurrency can come closer to it when it comes to the value. So, since Bitcoin is here to stay for longer, if not forever, it is crucial to invest in today for a better and prosperous tomorrow.
Bitcoin is the currency of the future, as many advocates say it. It is largely true because it is inevitable that digital currency is almost going to take over fiat currency someday in the future. And Bitcoin is the most valuable and dependable among the cryptocurrencies. In that perspective, it would be a wiser decision to invest in it today before you are left empty-handed in the future.