Almost everyone knows about Bitcoin or at least heard about it. As Bitcoin constantly hits its all-time high and dominate headlines, you might be wondering whether you should invest in Bitcoin. Here I outlined several reasons why it is worth investing in Bitcoin. Read on and find out if it is still a good time to buy Bitcoin.
Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. The opinions expressed in this article are the personal opinions of the author at the time of publication.
10 Reasons Why You Should Invest in Bitcoin
At the time of writing, Bitcoin is currently valued above $1,000. It has reached more than $20 billion in market value and the long-term gains in the last few years are dramatic as the currency has risen from $15 in 2013 to more than $1,000 at present. It is no doubt, huge!
No one expected that Bitcoins would reach $1,000 high when they first started in 2008. Look at where it is now.
So while $1,000 / BTC sound like a “magic mark”, we have question ourselves “is it really a magic mark?”. As it seems today Bitcoins will rise even more than $1,000 and it may reach $10,000 in the next five (5) years.
#1 Bitcoin Is Unstoppable
The notion of unstoppable computer systems should be familiar already. BitTorrent, the file-sharing protocol invented by Bram Cohen, has been around since 2001 and is still very much alive despite concerted, international, billion-dollar efforts to destroy it. The latest Star Wars movie can still, right now, be pulled through BitTorrent in minutes straight to your laptop.
BitTorrent was the very first Decentralized Application (DAP), or a community of actors generating value for each other across the internet. To truly stop BitTorrent, you’d have to shut down every single computer in every home in every country across the planet.
Bitcoin works in the same way as BitTorrent, it is unstoppable.
#2 Bitcoin Adoption
Bitcoin user adoption is starting to accelerate around the world. There will be more merchants using Bitcoin as a payment method, more users and more advocacy, more capital market investment coming from multiple places like India, China, South America, Africa. There also will be more digital tools empowering Bitcoin’s blockchain with added-value.
For the first three years of its life, Bitcoin was mainly used as a means of private exchange. Toward the end of 2012, WordPress, an online publishing platform, became the first major company to accept Bitcoin payments. Others, including OkCupid, Baidu, Expedia, and Overstock.com, followed in 2013 and 2014. Baidu later stopped accepting Bitcoin under pressure from the Chinese government, which clearly viewed Bitcoin as a threat to its own fiat currency.
The global economy is currently in a $152 trillion debt bubble, causing banks and governments to implement draconian monetary policies. Wealth preservation is becoming increasing difficult and it’s possible we’ll see more people looking for assets that are insulated from the traditional markets. Bitcoin’s decentralized nature makes it an appealing asset to hedge one’s portfolio. Bitcoin has proved out to be a very good portfolio asset owing to its high returns and acceptable volatility.
The statistic from Statista below depicts the number of Bitcoin ATMs worldwide from March 2015 to May 2017. There were 1,153 Bitcoin ATMs in May 2017 globally. If you look at the growth, it is increasing steadily over time.
#3 Bitcoin- Halving Protocol
Bitcoin follows a protocol by which almost every 210,000 blocks, the amount of new Bitcoin created is cut in half.
When Bitcoins was launched in 2009, the users were rewarded with 50 Bitcoins per block. This reward was halved in November 2012 to 25 Bitcoins per block. This will continue to happen and the number will be halved again. Thus, the amount of Bitcoins that can be created is strictly kept in check by the protocol it runs on.
The maximum number of Bitcoins is 21 million and not one coin more or less. Out of this 15 million has already been created. Bitcoin’s value will be difficult to drive down over time is that it’s not a resource that can be increased when demand is high. The scarcity of Bitcoins that may loom over us sooner or later is a very compelling reason to invest now as the price is simply going to hike over the coming years.
#4 Easy Trading
The trading of Bitcoin in very simple. Buying requires a credit or debit or Paypal or a bank account. It is that simple. These are facilitating platforms that allow for easily buying Bitcoins such as Bitquick, Blockchain etc. Transferring these Bitcoins to other users is also easy. But care has to be given during such transfer. This is because as highlighted in the succeeding reason the transfer is irreversible.
#5 Bitcoin Is Safe
Bitcoin cannot be hacked, manipulated or altered. Bitcoins are digital and cannot be counterfeited or reversed arbitrarily by the sender, as with credit card charge-backs. Once Bitcoins are sent, the transaction cannot be reversed. Since the ownership address of Bitcoins will be changed to the new owner, once it is changed, it is impossible to revert.
When you give your credit card to a merchant, you give him or her access to your full credit line, even if the transaction is for a small amount. Credit cards operate on a “pull” basis, where the store initiates the payment and pulls the designated amount from your account. Bitcoins use a “push” mechanism that allows the bitcoin holder to send exactly what he or she wants to the merchant or recipient with no further information. Furthermore, bitcoins do not require names – just digital wallet IDs.
Other than that, Bitcoin reduces the possibility of identity theft. When you give your credit card to a merchant, you give him or her access to your full credit line, even if the transaction is for a small amount. Credit cards operate on a “pull” basis, where the store initiates the payment and pulls the designated amount from your account. Bitcoins use a “push” mechanism that allows the bitcoin holder to send exactly what he or she wants to the merchant or recipient with no further information. Furthermore, Bitcoin does not require names – just digital wallet IDs.
However, it is worth nothing that exchanges or digital wallets are vulnerable.
With Bitcoin, it allows you to be able to send and get money anywhere in the world at any given time. You don’t have to worry about crossing borders, rescheduling for bank holidays or any other limitations one might think will occur when transferring money. You are in control of your money with Bitcoin because there is no central authority figure in the Bitcoin network.
With the blockchain, all finalized transactions are available for everyone to see. However, personal information is hidden. Your public address is what is visible. However, your personal information is not tied to this. Anyone at any time can verify transactions in the Bitcoin blockchain.
#7 Low Inflation Risk
One of the biggest problems with our current dollars and other currencies used around the world is inflation. Over time all currencies lose purchasing power at a rate of few percents per year mainly because governments keep printing more money. This process is basically a small tax on your accumulated wealth. As the central bank has nothing to do with cryptocurrency, it can’t influence it. Supply and demand are the only regulating mechanism defining its value.
With Bitcoin, you don’t have this problem because the system is designed to make Bitcoins to be finite. Only about 21 million Bitcoins will ever be released (mined). The release of new Bitcoins is slowing down and it will stop completely within a few decades. We have a slowing population growth which is projected to stop at around 10 billion by approximately 2050 which roughly coincides with the last Bitcoin to be mined. There will be roughly 1 Bitcoins for every 500 people.
#8 Appreciating Value
As you can see from the Bitcoin exchange graph that the value of Bitcoins was initially highly volatile during the first few years of it’s inception, however during the last 6 months the currency has stabilized and has been steadily increasing in value on a daily basis.
#9 Purchases Are Not Taxed
Since there is no way for third parties to identify, track or intercept transactions that are denominated in Bitcoins, one of the major advantages of Bitcoin is that sales taxes are not added onto any purchases.
#10 Ecosystem Simplification and Faster transactions
With all transactions being added to a single public ledger, it reduces the clutter and complications of multiple ledgers. Interbank transactions can potentially take days for clearing and final settlement, especially outside of working hours. Blockchain transactions can reduce transaction times to minutes and are processed 24/7.
Is It a Good Time to Buy Bitcoin?
If you are worried that you missed the Bitcoin Boat—and if you can take a long-term view—then stop worrying. The ‘right time’ to buy Bitcoin is whenever the cost is less than USD $10,000.
I think there’s always a mental barrier with people getting involved with bitcoin, hence many think about but a year down the line the same question pops into there mind.
Actually, Bitcoin appeared exactly at the time where it is needed the most. We are nearing the end of current financial world order. Countries engage in currency wars – and in this war, there are no winners, just losers. Central banks of most nations will probably print even more fiat currency and thus be transferring wealth from poor to the reach (the global elites). This is only possible because the poor are trapped – they use the fiat currency as store of value – and this will collapse.
But with Bitcoin – anyone can escape this trap! Buying Bitcoin is a lot easier than buying and holding physical gold. And it is certainly a lot more liquid.
With a small portion of your investment portfolio, a look towards the long view and open eyes that you could lose it as this is still an early adopter market, Bitcoin is now being used like gold as a hedge against devalued currencies. Its movement does not correlate with stock market movement and it has many positive properties over gold, for instance, the lack of storage fees being factored into the investment.
You may consider adding to in time. This will raise your average entry point into the market but allow you to monitor the risk as we move towards the mainstream, which I believe is where the market is heading.
If I invest $10,000 in Bitcoin today, how much money will I have by 2030?
However, what I can do is give you a simple chart on how the money scales as Bitcoin reaches new market caps. If you invested $10,000 today, here is what the value of your investment at:
Market cap of $50 Billion: $17,550
Market cap of $100 Billion: $35,103
If the market grows, so will your investment.
Where Can I Buy Bitcoin Safely and Invest?
Coinbase is one of the world’s largest Bitcoin broker, and also offers an exchange, a wallet, and developer API. In other words, it is a web-based digital wallet that allows you to send and receive Bitcoins. The company is backed by several large venture capital firms and claims to hold 617,000 consumer wallets, 16,000 merchants, as well as integration with U.S. banks.
Coinbase is often recommended to newcomers as one of the easiest ways to acquire their first bitcoins. Their extensive banking partnerships allow transactions to be made via EFT payment, ACH / SWIFT / SEPA transfer and, as a recent introduction, major credit cards and PayPal.
If you’re wary of leaving substantial sums of fiat or crypto on an exchange, Coinbase is probably one of the more secure options.