The popularity of Bitcoin continues to grow with investors large and small. Others, however, are skeptical. What should we really think about it? Should you invest in Bitcoin?
What is Bitcoin?
Bitcoin is a cryptocurrency, that is, a virtual currency. So there is no Bitcoin coin or bill.
Bitcoin was created in 2008 by Satoshi Nakamoto. It was the first cryptocurrency to be put into circulation. Today, it is undoubtedly the most famous virtual currency. These are the fundamental principles on which it is based.
Refers to the site that contains all transactions made in Bitcoin. Transactions are recorded and validated in groups (blocks). Each new block of transactions is added to the previous ones to form a chain. It offers a very high level of data protection.
The mining operation consists of validating the transaction blocks to add them to the blockchain. The miners guarantee the integrity and security of the Bitcoin blockchain and therefore their entire network.
Bitcoin works with a decentralized system. Unlike the central banks that handle traditional currencies, there is no entity that exercises authority over the Bitcoin network.
The goal of Bitcoin
The goal of Bitcoin is to facilitate transactions. It is a way to send money quickly and cheaply. In fact, since the transactions are made directly between two people, the intermediaries who charge commissions are limited. In fact, the only fees are intended to reward minors for their validation work.
But the ambition of Bitcoin is not just to be used to send large sums of money online. The idea is rather to constitute a means of payment accessible to everyone, so it is not necessary to open a bank account to be able to exchange bitcoins. All you need is a device with an Internet connection. Eventually, Bitcoin could be used for common everyday transactions like buying coffee, paying at a restaurant, etc.
How far can Bitcoin really go?
It’s clear that cryptocurrency has had a real success story. When it started and until 2013, you could invest in Bitcoin with few dollars. But things have changed a lot since then! The price of Bitcoin has gradually increased over the years. For example, last year it broke all records reaching its all-time high. Today, the price of Bitcoin is hovering around $ 46,000.
As with most cryptocurrencies, the evolution of the price of Bitcoin depends mainly on the law of the market, that is, on the balance between supply and demand. However, you should know that the offer of Bitcoin is limited. In fact, the maximum number of bitcoin tokens in circulation has been set at 21 million. To date, less than 19 million bitcoins have been created. The last bitcoin is expected to enter circulation around 2140.
Therefore, it is mostly the demand that drives the price of Bitcoin. To continue your progression, you need to increase your popularity and convince more and more users. There is no doubt that the main players in the market have an important role to play. For example, PayPal sent a very strong positive signal by deciding to accept Bitcoin payments starting in 2020. Advertising from big names like Elon Musk, the head of Tesla, is also helping more people invest in Bitcoin.
Beyond its popularity, the future of Bitcoin is primarily determined by its ability to provide a concrete solution to future problems. Bitcoin has already established itself as a safe haven often compared to gold. Its decentralized system has allowed many users to fight inflation in countries like Venezuela, for example. In the face of growing mistrust of traditional banking systems, cryptocurrency has the upper hand.
How to invest in Bitcoin?
Due to the popularity of Bitcoin, today there are many scammers who just want your money, which is why it is very important that you make sure to invest in Bitcoin on safe and regulated sites.
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