Bitcoin has taken the world by storm. Better yet, bitcoin price and value are rising!
Although initially the vast majority of people, even those versed in stock marketing exchange were skeptical about it possibly being another scam, it’s become evident that’s not the case.
In fact, there is merit to Bitcoin (and other cryptocurrencies). And, there’s a TON of money on the table for anyone willing to invest in and take advantage of this newly emerged phenomenon.
If you find Bitcoin intriguing and want to learn more about cryptocurrencies, you’ll love this article. I wholeheartedly suggest you read it all the way through.
I fully understand that cryptocurrencies aren’t exactly the easiest topic to get a firm grasp on…
That’s why, in this article; I’m going to shed some light on this phenomenon.
I will cover the basics like Bitcoin price and value. I’ll talk about where it comes from and how it works. Finally, I’ll show you how YOU can start investing in with Bitcoin today.
Ready? Let’s jump right in!
What Is Bitcoin And How Does It Work?
Bitcoin is the largest and most popular cryptocurrency on the market.
It’s also the first cryptocurrency introduced, created for the purpose of transferring value using digital currency, without an intermediary.
It was created back in 2009 by a programmer using the alias Satoshi Nakamoto. To this day, we still don’t know for sure who the creator of the first cryptocurrency really is.
Bitcoin is often referred to as the first decentralized digital currency. It’s essentially is a peer-to-peer system allowing for transactions to be made directly between the two parties.
If you go through the traditional channels, banks will charge you a hefty fee for each transaction. Cryptocurrencies, on the other hand, allow for an instantaneous, tax-free exchange.
As a decentralized currency, Bitcoin is not connected to a central repository or a single administrator. This makes all transactions quick, easy, and cheap, since they aren’t tied to a governing body or subject to regulation.
Another benefit is the fact that, during these exchanges, both parties remain anonymous. Likewise, you don’t have to wait for an intermediary’s approval to access your funds.
The Blockchain Technology
Bitcoin, in its essence, represents randomly assigned sets of unique numbers on the blockchain, with each of them linked to an individual signature as proof of ownership.
A blockchain is a digital technology, initially created by the same person/group of people under the name Satoshi Nakamoto, to facilitate Bitcoin transaction, but has since then found other potential uses.
A blockchain is a digital ledger which enables and records Bitcoin transactions. Apart from recording them, the blockchain verifies all Bitcoin transactions and ensures that the money is safely transferred.
Now, the thing with blockchain is that nobody can duplicate it. It can’t be counterfeit, and can’t be double spent. Everything is accounted for and verified.
It’s also incorruptible. This means that it allows the distribution, but not copying of digital information, that data is transparent – in a sense that it is embedded within the blockchain itself and therefore public.
It also means that the blockchain cannot be controlled by a single entity and that it cannot be corrupted, because altering any information on the blockchain would mean overriding the entire network (which requires tremendous computing power).
Bitcoin transactions are made through the blockchain, where the value transfer is made from one Bitcoin wallet to another, using the sender and recipient’s Bitcoin addresses.
A wallet can be a software program or hardware (e.g. a piece of paper) where you can “store” Bitcoins. Technically, Bitcoins aren’t stored anywhere; they exist in the blockchain.
The wallet holds the private key which allows the holder to access the coins in the blockchain and transfer them to a different owner by associating them with their private key.
Now that you have a basic understanding of what Bitcoin is, you’re probably wondering: “Where does the Bitcoin get its value from?”
Bitcoin Value
Why is Bitcoin worth anything in the first place?
I understand that the sheer concept of a currency which only exists in the digital world can be a bit confusing. Not to mention that most people find it hard to believe that 1BTC is worth nearly $10,000 USD.
To answer this question, we need to take a closer look at the very basics of Economics. We need to talk about the way in which we attribute value to something.
Now, in Economy, the value of something is determined based on the following principles: scarcity, utility, and supply & demand.
I’ll use gold as an example, to illustrate how these principles ultimately determine the value we attribute to it.
Scarcity
Obviously, there’s a limited amount of gold which can be mined from the Earth and it’s quite difficult to find. You can’t just go out with a shovel and randomly start digging for gold. This significantly adds to its scarcity.
Similarly, Bitcoin is also mined (more on that in one of the following sections) and there is a finite amount of coins that will ever be created and in circulation.
This number is set at 21 million, meaning that once they’re all mined and distributed amongst various owners, you’ll only be able to get them by exchanging another currency like USD or products/services for them.
Utility
Just because something is finite and difficult to come by, doesn’t mean it’s inherently valuable. In order for something to have value, it also needs to provide utility.
Gold’s utility comes from the fact that it’s extremely durable – it doesn’t deteriorate and will maintain its original form for thousands of years. You can transfer gold between a hundred owners, and it would retain all of its original properties.
Likewise, Bitcoin is virtually indestructible since it exists in a digital environment, and can be transferred an infinite amount of times while maintaining its properties.
Apart from that, Bitcoin’s utility comes from the fact that it greatly facilitates transactions: transferring money is faster, easier, cheaper (no taxes) and anonymous.
Supply & Demand
Gold is highly desirable, and most people genuinely derive great pleasure from owning it – whether as jewelry or as an investment asset that’s less prone to inflation and volatile changes than paper money.
The supply of gold is limited, and with the increasing demand for it in recent years, due to the increased wealth of emerging market economies, its value continues to rise.
The same thing is happening with Bitcoin. The supply of Bitcoin slightly increases as more people begin mining and trading it, but it’s the enormous increase in demand that caused the value of Bitcoin to soar.
Initially, Bitcoin was borderline worthless. In June of 2009, the price of 1BTC was 0.0001 USD. So, what happened in the last 9 years?
Obviously, not very many people were aware of its existence when it was first introduced. Since then, people have realized the myriad of benefits it provides, and a huge number of merchants around the world had started using it as a valid means of payment.
As more and more people started utilizing it, the demand for this cryptocurrency rapidly grew, causing the value to increase exponentially.
Here’s how the value of Bitcoin price changed through the years:
Screenshot by: http://www.buybitcoinworldwide.com/price/
Bitcoin Price Chart Since 2009
Bitcoin reached its all-time high on December 11th, 2017, where 1BTC was priced at $17,549.67 USD.
The important thing to note is that, since June of last year, the number of Bitcoins in circulation reached 16,4 million – meaning that we’re steadily approaching that 21 million cap.
Experts speculate that, at the rate people are mining today, we’ll reach the final number of Bitcoins available will be in circulation by 2033.
Remember, since the production of Bitcoin will completely stop after we reach the 21 million mark, this means that Bitcoin will never be subject to inflation.
In other words, the only way Bitcoin’s value will start to drop is if the demand for it suddenly goes down, which is highly unlikely to happen in the foreseeable future.
With a finite supply and a steadily increasing demand for this virtual currency, the value of Bitcoin is predicted to likely continue to skyrocket, with some of the most optimistic investors, miners, and experts speculating that it might even reach 1 million per BTC in the next decade.
What’s The Current Bitcoin Price In USD?
It’s important to understand that the value of Bitcoin and its day-to-day price are not equivalent.
The daily price of Bitcoin is largely determined by the market where people buy and sell the cryptocurrency. In other words, what ultimately determines how much Bitcoin is going to be worth today, tomorrow, and the day after – are the interactions between buyers and sellers.
As I write this, today’s (May 10th, 2018) price of 1 BTC is around $9,126.60 USD, with the exact number changing every hour.
screenshot from: http://www.coindesk.com/price/
Since you’ll probably be reading this article at a later time, you can always check the price of Bitcoin yourself at Coindesk.
The chart can show the price change for the day, month, year, or since the beginning of Bitcoin.
As you can see, Bitcoin has exhibited a significant increase in price in the past couple of years. It continues to be on the rise, and you can still make serious money by investing in this cryptocurrency.
However, it’s worth noting that Bitcoin Isn’t the only cryptocurrency available. There are tons of alternative cryptocurrencies, known as altcoins, with varying technologies behind them and different levels of utility.
Among the most popular are Ether (Ethereum), Bitcoin Cash, Ripple, Monero, Neo, Litecoin, Dash, etc.
There are multiple websites like AltcoinToday, where you can quickly and easily check the price of Ether and other altcoins:
screenshot from: http://altcointoday.com/coin-market-cap/
Before investing into altcoins, do your diligence and research the ones that you find interesting. Learn what the technology is and what people are using them for.
You should even consider reading their whitepapers. These are the official documents the creators published to explain why they created the specific currency and how it works.
Why Monitor The Bitcoin Price Changes?
There are two major ways to make money with Bitcoin: by mining it or by investing in it.
Since mining requires you to invest in rather expensive gear, most people chose the second route and decide to invest in buying Bitcoin for the purpose of trading it for a profit.
Now, there are two ways you can go about Bitcoin investing.
You can buy a certain amount of Bitcoins and keep them safely stored in your wallet for a certain period of time, and then after it reaches the desired price, you can sell it back and earn a profit.
Alternatively, you can buy Bitcoin (and other altcoins) for the purpose of day trading on the exchange market.
In either case, you’ll want to closely monitor the changes in Bitcoin’s price, in order to make the most out of your investment.
If you’re planning on holding Bitcoins, it’s best to check the price every couple of days (or daily if you prefer) to ensure it continues to rise.
At some point, the price begins drastically dropping, you might consider selling your stored Bitcoins to get the highest possible profit.
On the other hand, you’re planning on trading it daily, then I’m sure you’re aware that charts providing detailed information regarding the price, market cap, and transaction volume are an indispensable resource.
You’ll have to keep them open at all times, to capitalize on the price fluctuation – buy when it’s lowest and sell when it’s highest.
There are plenty of websites which provide charts for all types of cryptocurrencies, but for Bitcoin specifically, I found that Bitcoin.com is the best.
screenshot from: http://charts.bitcoin.com/
It provides the most detailed information, and is easy and simple to navigate. You can even get a free wallet and buy Bitcoin straight from the site.
What Is Bitcoin Mining?
As I mentioned earlier, Bitcoin is a peer-to-peer network. It doesn’t have a central government that determines when and how the money will be distributed.
Instead, that role falls to Bitcoin miners. These people use specific software to run scripts that solve Bitcoin algorithms, in exchange for a certain amount of the currency.
Miners are essential to the blockchain technology. At certain intervals, the computers “mining” the currency collect several hundred pending Bitcoin transactions (“blocks”). Then, they convert them to mathematical problems – algorithms.
The miner who finds the solution receives Bitcoins as a reward. This is an intelligent and fair way to issue the currency. Simultaneously, it provides an incentive for people to mine Bitcoin, thus keeping the blockchain safe and secure.
The network itself automatically changes the difficulty of the math problem, depending on how many people are mining the currency and how fast the problems are being solved.
Initially, people used their PC’s processors to solve these problems and mine for Bitcoin. However, miners quickly discovered that graphics cards manufactured for gaming are actually much better suited for the task.
They are much faster, but they use much more electricity and generate a lot of heat. In response, manufacturers started creating specific chips that were specifically reprogrammed for mining.
Today, ASIC (Application-Specific Integrated Circuit chip) are specifically designed for faster and more effective cryptocurrency mining, while using less power.
However, new miners are joining the network every day. In turn, the difficulty of the math problems steadily increases.
Another drawback of mining is that mining-specific gear isn’t exactly cheap. Rigs – computers specifically put together for optimal mining – cost anywhere from $5,000 to $10,000+.
However, if you have the money to invest in a dozen rigs, you’ll likely have a tremendous ROI in the long-run.
Why Invest In Bitcoin Today?
Bitcoin is really hot right now. It’s also showing a strong tendency to continue to rise in popularity and value for years to come.
People sometimes even refer to Bitcoin as the “gold of the internet”. It is accepted worldwide as a currency and viable means of payment. A large group of merchants, investors, venture capital firms, and individuals.
As long as people trust that Bitcoin has value as a currency, they will continue investing in it. Consequently, this will boost Bitcoin’s value even further.
And judging by the rate at which it’s growing, and the fact that even celebrities like Ashton Kutcher, Lilly Allen, Nas, and even billionaires like Bill Gates and Richard Branson are investing in it, we can confidently say Bitcoin is here to stay.
Many established companies across the globe regularly engage in buying and selling Bitcoin. It’s become so popular that even local businesses and small shop-owners are accepting it as payment.
A good example is Germany’s largest food delivery portal, Lieferando.de
They work with over 11,000 partner restaurants and had started accepting payments in Bitcoin last year.
On top of that, there’s also the fact that world’s economies are facing difficult challenges. They are beginning to quickly lose faith in FIAT currencies like USD and EUR.
Several governments have already shown that they can seize your assets if necessary… Which begs the question how safe is the money in your bank account.
A Smarter, Safer Investment
Since Bitcoin doesn’t have a governing body, you’re completely circumventing the intermediaries (banks). This makes each transaction faster, easier, safer, more secure, and tax-free.
Some experts are willing to go as far as to say that cryptocurrencies are the currency of the future, and that in the next 10 to 20 years, we’ll no longer be relying on paper money at all.
As you’ve seen from the charts, Bitcoin’s value continues to skyrocket. That makes it a perfect opportunity for an average person to invest in this cryptocurrency and generate a substantial profit in years to come.
There has never been a better time to jump on the bandwagon and join this billion-dollar industry!
Apart from that, buying cryptocurrency today is quite simple, since there are tons of companies selling Bitcoin, with Coinbase being the best option for US-based investors.
It sports an extremely user-friendly interface, and provides ACH bank transactions. This ensures a quick, easy, and secure online Bitcoin purchase.
Just consider that the company sells BTC (and other cryptocurrencies) to customers at a markup around 1% over the current market price. So, you’ll need to take that into account when calculating your potential profit.
What Is The Future Of Bitcoin?
We can only speculate how the Bitcoin’s value is going to change in a month, year, or 10 years.
But, judging by the past trends, the advice of tech experts and seasoned investors, as well as an ever-increasing demand, the most likely outcome is that it will continue to soar for years to come.
Something similar to this: http://bitcoincharts.com
A recent example of a Chinese entrepreneur, who bought 10,000 Bitcoins. This goes to show you just how confident people are that the blockchain technology and Bitcoin are the future.
Cai Wenshang is just one figure in the sea of traders, investors, and industry professionals. These people are putting their trust in cryptocurrencies and are ready to invest HUGE amounts of money in Bitcoin.
According to them, NOW is the perfect time to invest in cryptocurrencies.
All things considered. As long as the Bitcoin community maintains this high level of trust in the system (and there’s no reason not to) the value of cryptocurrencies will continue to grow.
Final Thoughts
I hope you’ve found this article informative and valuable. Also that it helped explain the somewhat elusive phenomenon that is cryptocurrencies.
If you’re seriously considering buying or investing in cryptocurrencies, you should definitely bookmark this page. You will want to read the article a few times over.
What do you think about cryptocurrencies? Are you going to start investing in them, and if so, are you more inclined to mine or trade?
Let me know in the comments below!
P.S. If you’re interested in other investment opportunities and want to learn more about creating wealth, I invite you to join a FREE 2-Hour Online Prosperity Workshop.
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About The Author
Your Millionaire Mentor
Shaqir Hussyin
Shaqir Hussyin is the founder and CEO of WealthAcademy.com & Funnels.com. Nicknamed the “Backpack Millionaire”, he’s invested $350,000 into his own education and training. Whilst traveling to 100+ countries, Shaqir has built over 10+ million dollar brands and attracted over 500,000+ subscribers.
His signature program is now available: Max Income System; 14 Simple Steps To Making Your First $120K
Shaqir is also a highly sought-after speaker and direct response “Sales Funnels” global leader. His work has impacted over 100,000 businesses in 65 different countries. Connect with Shaqir on Instagram, YouTube, LinkedIn & FB Group.
Related Bitcoin Resources:
Must-Have Bitcoin Apps: http://news.bitcoin.com/10-bitcoin-apps-that-everyone-should-have/
Up To Date Bitcoin News: http://news.bitcoin.com/
