What We Should Know About Bitcoin?
Bitcoin Background That We Must Know

What We Should Know About Bitcoin?


  • Bitcoin powerOn March 21, 2013, the market capitalization of Bitcoin rose to $1 Billion and in April 2013, the value went beyond $100 across MtGox as well as other exchanges.(MtGox is now defunct) From pizza to space travel? Yes, from November 22, 2013 onwards you can buy a seat on Virgin galactic using Bitcoins. This is the space travel company owned by Sir Richard Branson.  It’s clear to see the astonishing rise of Bitcoin and why it is being viewed as the currency of the future. Talking about the word rich, let’s take a sneak peek into Bitcoin’s trends of creating millionaires overnight. Yes, millionaires! You’ve read that right! Want proof? Here are 3 people who succeeded making millions through Bitcoins. Have a look! (These three are by no means the only people who struck it rich with Bitcoins and crypto currencies... there are tons of others as wellAnd they became Rich with Bitcoins ● Charlie Shrem: A the tender age of just 23 ,he is the CEO of BitInstant, which is an exchange service transferring cash to Bitcoins, Shrem came to know about Bitcoins during his Brooklyn College days in 2011. ● He did not mine for coins, but instead bought these electronic currencies over a digital currency exchange called Tradehill. Initially, he bought 500 Bitcoins at $3 to $4 per coin, and then lots more as the value soared to $20. Jered Kenna: This 30 year old happens to be the CEO of Tradehill Bitcoin exchange. Jered’s story? well by accident, while wiping his computer clean, he deleted 800 Bitcoins in 2010. For most of us wiping out close to $500,000 of wealth would see us dropping to our knees screaming at the computer gods. However Jered just took it in his stride why… Jered was one of the initial investors of Bitcoin, purchasing his first lot of 5,000 coins at 20 cents per coin. Today, he is recognized amongst the foremost global authorities across the globe. According to Jered, the investment trend in Bitcoin has shifted from people spending around $500 to people dishing out amounts as high as $1 million.● Roger Ver: Aged 34, Roger Ver, is a former politician and an investor. Soon after the launch of Bitcoin, Ver became obsessed with the new crypto currency. ● He is sort of an angel investor in a number of Bitcoin startups. He has the peculiar habit of giving away coins for free, and is therefore widely known as “Bitcoin Jesus”The benefits of crypto are not well understood or even considered beyond the possibility of a life change rising in value for coins that an investor might ride to riches. The Golden Coin This may well be the future for Bitcoin so to start a list of reasons why you should hold some Bitcoin must start with:1)  A lottery ticket to a ride that some see having a 1,000% upside.  It could happen. There are only going to be 21 million bitcoins (BTC), many of which like Roman gold coins are already lost forever. If bitcoin was to be worth just half of the gold in the world it would be  about $200,000 a coin. If all the BTC was worth $1 trillion then the price would be north of $50,000.  With BTC currently at $7,400 and the ability for people to buy tiny amounts, there is a fun dividend in actually holding.  2) Blockchain is “the next big thing.”  If you want to catch that wave when it lands, you need to know a bit about it. Buying crazes on the basis of zero knowledge is the short cut to the poorhouse. Owning bitcoin and going through all the stages to “get” crypto will position you perfectly for the day “crypto IPO” hits. That day will come and it will be big. Owning bitcoin will position you to take advantage of that boom. 3) Portfolio diversification is crucial.  Everyone should have a little gold, for example, to buffer the roller coaster of other financial instruments. Bitcoin and gold are very similar in as much as they are havens. “Physical” bitcoin however is easier to store, faster to sell and has much greater upside if you are laying in assets for what you see as being extremely volatile times in the future. If you are not in the “bullets and corn beef” legion, the gold, silver and bitcoin are must haves, with bitcoin the king if you feel you might have to jump on a plane to safety. It’s easy to travel with bitcoin; with gold bars and sacks of silver, not so much.  4) Bitcoin is currently a great hedge especially for equities.  This is because for now at least, bad news for equities is good news for bitcoin. That bad news is currently the China trade war. The trade war is bad for equities and there is a clear link to moves in BTC and emergent good/bad news on the trade negotiations. Bitcoin sends the signal then the news appears, which one would imagine is because of the insider news flow in crypto-hungry China.  5) Bitcoin is useful money.  You can buy things with bitcoin, and with bitcoin debit cards you can use it to buy things anywhere that takes Visa/Mastercard. While this can prove expensive, a bitcoin debit card is another off ramp for holders wishing to spend their profits. Bitcoin is also a useful currency for B2B and while currently niche, bitcoin use for international payments is quickly expanding when products need to be bought quickly and the vendor needs to establish transfer of funds fast to cut out delays. For large sums bitcoin beats credit cards hands down as a bitcoin transaction can’t be reversed unlike a credit card payment that is always vulnerable to charge backs. Transfers can take days to materialize, so for anything that’s a “rush job” bitcoin is the best possible way to pay if the vendor takes BTC.  Every investor should buy some bitcoin, even if it’s just $1. It is always best to be too early to a financial phenomenon than too late and it turns out the bitcoin story is still in its early chapters. The Bitcoin story is still unfolding.  Bitcoin Mining :  Chances are you hear the phrase “bitcoin mining” and your mind begins to wander to the Western fantasy of pickaxes, dirt and striking it rich. As it turns out, that analogy isn’t too far off.  Far less glamorous but equally uncertain, bitcoin mining is performed by high-powered computers that solve complex computational math problems (that is, so complex that they cannot be solved by hand, and indeed complicated enough to tax even incredibly powerful computers). The luck and work required by a computer to solve one of these problems is the equivalent of a miner striking gold in the ground — while digging in a sandbox. At the time of writing, the chance of a computer solving one of these problems is about 1 in 13 trillion, but more on that later.  The result of “bitcoin mining” is twofold. First, when computers solve these complex math problems on the Bitcoin network, they produce new bitcoin (when referring to the individual coins themselves, "bitcoin" typically appears without capitalization), not unlike when a mining operation extracts gold from the ground. And second, by solving computational math problems, bitcoin miners make the Bitcoin payment network trustworthy and secure, by verifying its transaction information.  There’s a good chance all of that only made so much sense. In order to explain how bitcoin mining works in greater detail, let’s begin with a process that’s a little bit closer to home: the regulation of printed currency. How Does Bitcoin Mining Work?  Here's the catch. In order for bitcoin miners to actually earn bitcoin from verifying transactions, two things have to occur. First, they must verify 1 megabyte (MB) worth of transactions, which can theoretically be as small as 1 transaction but are more often several thousand, depending on how much data each transaction stores. This is the easy part.  Second, in order to add a block of transactions to the blockchain, miners must solve a complex computational math problem, also called a "proof of work." Why Bitcoin is Gaining Traction The world is becoming ever more reliant on the internet.  So, really:  It is no surprise that Bitcoin, a secure, global, and digital currency has claimed the interest of investors.  Bitcoin is open to everyone and provides an exciting opportunity to delve into an entirely new asset class.  Investing in bitcoin may seem scary, but know that it takes time and effort to understand how Bitcoin works.Why Invest in Bitcoin? It seems silly to some people that one bitcoin can be worth hundreds of dollars.  What makes bitcoins valuable?  Bitcoins are scarce and useful.  Let’s look to gold as an example currency. There is a limited amount of gold on earth.  As new gold is mined, there is always less and less gold left and it becomes harder and more expensive to find and mine.  The same is true with Bitcoin. Bitcoin Sounds Bitcoin’s sound monetary policy is one of its most important features. It’s possible to see when new bitcoins are created or how many bitcoins are in circulation.  Bitcoins can be sent from anywhere in the world to anywhere else in the world. No bank can block payments or close your account. Bitcoin is censorship resistant money.  Bitcoin makes cross border payments possible, and also provides an easy way for people to escape failed government monetary policy.  The internet made information global and easy to access. A sound, global currency like Bitcoin will have the same impact on finance and the global economy.  If you understand the potential impact of Bitcoin, it won’t be hard to hard to understand why investing in bitcoin may be a good idea.  When is the right time to buy? As with any market, nothing is for sure.  Throughout its history, Bitcoin has generally increased in value at a very fast pace, followed by a slow, steady downfall until it stabilizes.Bitcoin is global and not affected by any single country’s financial situation or stability.  For example, speculation about the Chinese Yuan devaluating has, in the past, caused more demand from China, which also pulled up the exchange rate on U.S. and Europe based exchanges.  Global chaos is generally seen as beneficial to Bitcoin’s price since Bitcoin is apolitical and sits outside the control or influence of any particulate government.  When thinking about how economics and politics will affect Bitcoin’s price, it’s important to think on a global scale and not just about what’s happening in a single country.Bitcoins should only be kept in wallets that you control.  If you leave $5,000 worth of gold coins with a friend, your friend could easily run off with your coins and you might not see them again.  Because Bitcoin is on the internet, they are even easier to steal and much harder to return and trace. Bitcoin itself is secure, but bitcoins are only as secure as the wallet storing them.Final Thoughts It’s important to understand how Bitcoin works before investing any money.  Bitcoin is still new and it can take months to understand the true impact Bitcoin can have on the world.  Take some time to understand Bitcoin, how it works, how to secure bitcoins, and about how Bitcoin differs from fiat money.Bitcoin hits highest price this year, above $10,000, as Fed Chair Powell discusses cryptocurrenciesBitcoin hit its highest level this year and also in five months on Wednesday, jumping above $10,000 and continuing the recent bull run for the cryptocurrency.  In the early morning on Wednesday, bitcoin hit $10,489.78, the highest price it has logged since September, according to data from Coindesk. That’s a more than 44% increase from the start of the year. It comes after bitcoin logged its best January performance in seven years.  Industry participants have attributed a number of factors to the rise of bitcoin, including some investors viewing the cryptocurrency as a sort of safe-haven asset in times of uncertainty.“External factors contributing to the rise above $10K include global uncertainty around the Coronavirus outbreak,” Vijay Ayyar, head of business development at cryptocurrency exchange Luno, told CNBC by email.  The new coronavirus, which originated in Wuhan, China, has claimed the lives of over a thousand people with the number of cases reported in excess of 44,000. Businesses were shut for longer than usual during the recent Lunar New Year holiday with some employees only just returning to work. Economists have raised concerns about the potential negative effect on the global economy.  Ayyar also pointed to recent comments by Federal Reserve Chair Jerome Powell, that seemed to acknowledge the potential power of digital currencies, as another factor behind the surge in the last 24 hours.  In his testimony in front of Congress on Tuesday, Powell was asked about central bank digital currencies and the Fed’s view on a digital dollar. He acknowledged that Facebook’s Libra project was a “wake-up call” that a digital currency could come “fairly quickly” and in a way that is “quite widespread and systemically important.” But he said that there are still “many questions that need to be answered around digital currency for the United States.”  Libra has faced backlash from politicians and regulators around the world concerned that a private company with over 2 billion users could issue a currency. A number of Facebook’s partners have also dropped out of the project.  There have been growing calls for the U.S. to issue a digital dollar particularly as China has acknowledged that it’s working on a digital yuan.  Meanwhile, the bitcoin community is also looking forward to an event which as been dubbed the “halvening” which is taking place in May. It is a change written into bitcoin’s underlying code. This is when rewards for so-called miners, which are key parts of the bitcoin network, are halved. The effect is to essentially reduce the supply of the cryptocurrency coming onto the market. Previous “halvening” events have preceded price rises in bitcoin.

Blondgirl
Blondgirl

I am a cryptocurrency lover


The Promising Cryptocurrencies Future
The Promising Cryptocurrencies Future

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