Bitcoin as a cryptocurrency is fast becoming a household name in the currency world especially among merchants for international transactions. The fact that it is becoming popular these days has made many people flock towards investing in it, for high yield returns. However as a good investor, it is important you understand certain key facts about bitcoin before investing in it. We will attempt in this guide, to talk about six of those facts to consider before investing in bitcoins, under the following outlines.
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Bitcoin as a cryptocurrency was created in 28 by a pseudonymous creator called Satoshi Nakamoto. He is said to be “pseudonymous” as no one knows to this day, who he is, whether he ever existed or if he is an organization. Truly very mysterious circumstances surrounds the creation of this cryptocurrency which make it all the more exciting.
Bitcoin was designed from inception to be decentralized; meaning it is not under the control of any national federal government authorities or federal bank. Rather, it is powered by a community of individuals and group of people who are passionate about it and see it as a way to profit for themselves and others. This makes it a currency that offers a level playing field for all.
Just like traditional currency, Bitcoin can be printed in a sense, in a way similar to them and this happens through the digital process called “mining”. In Bitcoin mining, the cryptocurrency is manufactured through a complex of mathematical algorithms and complexes by highly-powered computers. This is quite difficult and takes a lot of time and effort for its processing.
The very fact that the world is becoming more reliant more than ever before on the internet makes Bitcoin a very popular currency for transactions and investments by merchant and people. It is a no surprise that Bitcoin, a more secure global, digital currency, unlike fiat currency is fast becoming the pride and delight of investors for investment purposes. So it’s no surprise that Bitcoin, a secure, global, and digital currency has claimed the interest of investors. However as a beginner investor, there are certain facts you need to know before investing In Bitcoins. We will attempt to discuss six of such facts. They include:
When it comes to ease in making international and local transactions without extra bank charges, Bitcoin is the best option to go with. This is because it operates a highly borderless system where people can use it for cross-border transactions without any extra cost, making it a valuable asset of transaction for everyone. Although, investing in bitcoin may seem scary but with tie and effort, one would be able to understand how it really works. In addition, perspectives on bitcoin may vary globally. So it is important one does his research well before investment. Also put this in mind and do your own proper research before investment.
When compared to traditional fiat currency which are state-owned and can be printed by federal governments or bank authorities to increase its circulation, Bitcoin is quite limited in supply. It in this regards compares best with gold, which is highly limited in supply as it is dug deep from the earth crust. This is because as new gold is minded, it becomes more difficult to get fresh gold supply as its supply is continuously depleted, making it harder and more expensive to mine it. In the same vein, Bitcoin is highly limited in supply so that only about 21 million Bitcoins were designed to be manufactured by the Bitcoin network structure, making it relatively scarce. This is also worthy of note.
In terms of transparency as a payment option, Bitcoin stands in as class of its own from other currency and cryptocurrency, due to its underlying distributed ledger technology, blockchain. This makes all transactions on the network to be public, traceable, immutable, and also publicly stored on the Bitcoin blockchain. This is done in such a way that every time you buy and sell Bitcoins, the information is consequently updated and broadcast for all to see.
Apart from being highly transparent, bitcoins are useful. They provide sound and highly predictable monetary policy that can be verified at any time by anyone.
Apart from being an investment, Bitcoin is also a highly accepted currency for financial transactions worldwide and can be used for purchase of goods and services, just like the dollar.
The good news about bitcoin is that it is for everyone. Unlike traditional investment in fiat currencies reserved for some elite rich, anyone who is an investor can invest in it without any form of accreditation due to its highly decentralized system.
