In 2016, I really got into Bitcoin or BTC. I think I heard about BTC / Bitcoin in 2012 first and I had zero interest in digital currency / internet money. I had no idea that “internet money or nerd money” , might have any price in actual $.
How stupid was I? in 2016 Bitcoin was $650 when I started paying attention. So, you can imagine, what I have lost already. After financial crisis in 2008, one person known as “Satoshi” came up with the decentralized currency, for the people, run by people and to be used by people, it is borderless but not limitless, there will be only 21 million coins, unless the community decides otherwise. Nobody owns bitcoin, the network or Bitcoin community owns bitcoin.
I cannot tell you everything here, so here is a channel in YouTube that will help you understand why and what is Bitcoin – https://www.youtube.com/channel/UCJWCJCWOxBYSi5DhCieLOLQ
So in 2016, my first reaction was “how do I get bitcoin”? And second reaction was “what is it? How does it work? Why is it so exciting?” Any technology is costly because of the intrinsic value, the usage. Hence I needed to understand the usage of Bitcoin, how does bitcoin work? Why is it better than fiat money or USD or any other such national currency?
Why do I invest in Bitcoin?
The blockchain technology that makes Bitcoin possible, or exchange of value possible is not the reason why I am interested in Bitcoin. You need to understand, what inflation is and why people actually invest in precious metals?
WE hear the the term every now and then, but most of us do not realize, how it impacts us. Say you have $10 in bank account and you can buy 5 breads today. The current inflation rate is 2%, so after one year these same 5 breads would cost you $10.20. Now, the problem is, you still have $10 in your bank account, hence you won’t be able to afford all 5 breads anymore. Same way every year your purchasing power will go down and you will end up feeling poorer.
Now, why do we invest in precious metals?
WE invest in gold and silver to preserve our wealth or to save purchasing power. Gold or Silver does not generate value but as any other commodity it preserves your wealth.
Ok, so why Bitcoin?
Precious metals are tangible, bitcoin is not, then how come both are similar? Well, to start with, bitcoin is mined, which is transaction validation using lot of computing power , hence using electricity. After solving these mathematical computation Bitcoin is found in blocks. But forget about that, here are my reasons-
- bitcoin is safe – right now almost 30 billion USD safe
- Bitcoin is not owned by anyone – no government, no single person owns bitcoin
- Bitcoin can be used as exchange of value – all you would need is a phone and internet
- You do not need a bank to exchange value with bitcoin
- Bitcoin is borderless – I can send bitcoin to India in 10 minutes 🙂
- Number of Bitcoin to be issued is 21 million, not like central bank issued currencies, so Bitcoin will see deflation , not inflation. Your purchasing power will go up, instead of going down.
These 5 reasons were good enough for me to believe in Bitcoin. But just because bitcoin is not backed by Bitcoin, you might not be convinced, so here is another video for you, Venezuela is going through hyper inflation, the example I gave you, it is just say 200% and you can imagine how fast you lose your buying power, so, Venezuelans are moving away from their national currency and using bitcoin – reason being no one can produce fake bitcoin and there is no inflation in bitcoin – now watch the video
If you have any question feel free to email me or leave a comment, I will be more than happy to explain more, if you are interested exchange some of your fiat USD for some Bitcoin then visit Coinbase.