Many analysts over the last decade have called investing in Bitcoin and other cryptocurrencies the “opportunity of a generation,” but why? The truth is, there are many reasons why you may want to consider investing your hard earned money into this technology. With the technology holding high possibility of disrupting and/or reforming current structures, you would surely not want to be one of the people who didn’t hop on board the train.
Before your FOMO instincts kick in, though, it is best to take a step back and look at a few main reasons you would want to, or should want to, consider investing your money into Bitcoin and other alternative cryptocurrencies.
Bitcoin is a deflationary, autonomous currency, not owned or controlled by any government.
Essentially, what this means is that, because there will only ever be 21,000,000 Bitcoins in existence, its value should theoretically continually increase as time passes. This protocol acts as a sort of safeguard against inflation, the devaluing of a currency. This also guarantees Bitcoin to be in scarce supply, and has been dubbed “digital gold” numerous times.
If we are to define money as something to which people attach value, that can also be spent/used to compensate for goods/services/time, then Bitcoin will always retain or gain in value as long as people place value in it.
The importance of a currency not controlled by a government is such that it allows for Bitcoin to be the peoples’ money, due to Bitcoin’s decentralized nature. Unlike gold, Bitcoin cannot be confiscated by any government, much like has been done in the past.
In 2019, U.S. Congress ruled Bitcoin to be a form of Free Speech, as the Bitcoin code is open source. No world government can inflate the price of Bitcoin, as they do not have the power to devalue the price or print more fiat to stimulate the economy. A world currency that knows no boundaries and pledges no allegiance to any country except the people that use it could be considered one of the highest achievements of an evolved species.
Bitcoin is not controlled by any Central Bank.
Much like Reason #1, Central Banks are bypassed by the decentralized nature of the Bitcoin protocol. Central Banks have long held court as the financial system standard, offering customers a place to store their funds, while offering funds on loan.
One of the biggest problems with the Central Bank is that they operate on a fractional reserve system, meaning that only a fraction of the actual funds are backed by any actual cash. The banks loan the partially-backed money out, on the agreement that the borrower pay the sum back with interest. More money is created every time the banks loan money out, and opt for interest rate adjustments to adhere to desired economic inflation rates.
With Bitcoin not being controlled by the Banks, you will no longer have to adhere and abide by the bank’s open hours. The cryptocurrency market is open 24/7, but the banks all close and reopen at certain times. Being independent of both government and banks means that your Bitcoin is non-custodial, owned by you and managed by you.
This is a powerful, revolutionary change, as it means people can actually own and control their own money, and have access to their funds 24/7, without having to wait for the bank to open. The current financial structure uses a Clearing House to process and confirm financial transactions, thus requiring most transactions between a user and a bank to take 1-3 days. With cryptocurrencies, funds are sent and received without a middle-man.
Depending on the cryptocurrency, transactions can take between less than
1 second, up to an hour at most (on average, Bitcoin transactions confirm within 10 minutes). In September of 2019, a Bitcoin address sent $1 Billion USD worth of BTC (94,505 BTC) to another address, costing roughly $690 to complete the transaction, which would have confirmed in less time than it would have taken for the bank’s clearing house to process the transaction. This same amount of money in gold would have been too cumbersome to physically move, especially if across the geographical world.
Bitcoin is the best performing asset of the last decade.
Bitcoin is a form of sound money, and is proving to be a better method of storing value than traditional fiat currencies. Historically, the USD has inflated nearly 98% over the last 100 years.
Other traditional fiat currencies have seen massive inflation throughout history, such as Venezuela’s Bolivar (which has seen well over 5000% inflation in recent years), and the Weimar Republic (Germany)’s currency in 1922-23 (which saw their currency inflate at a peak of over 29,000%, with prices of items costing twice as much every two days).
The USD is currently not backed by any asset, having departed from using gold to back the USD (The Gold Standard) in 1972. This essentially means that the USD’s value is based on little more than the trust and value that people place in it.
With the threat of a pending global financial crisis, Bitcoin could be a possible safe haven to store value in times of financial upheaval and distress.
Compared with precious metals, Bitcoin has seen more growth since it’s inception than the entire history of gold. Given that only 21 million Bitcoin will ever be in circulation (minus all the coins that have been lost or burned over time), gold and other precious metals cannot begin to compete with the scarcity of Bitcoin.
More precious metals will be mined. Once the 21 millionth Bitcoin has been mined, there will be no more new Bitcoins mined into circulation.
Bitcoin and other Cryptocurrency technologies will revolutionize how humans conduct daily business, and perhaps life as we know it.
There has never been one currency that the entire world uses, without need for institutional aid or intervention. The Blockchain, a model of technology that Bitcoin and other cryptocurrencies are built upon, is beginning to revolutionize not only the finance industry, but other industries as well.
Some milk companies have begun to use the blockchain to source their milk down to the very detail of which cows produced which batch, and where the product was shipped to thereafter.
In 2019, U.S. Presidential Candidate Andrew Yang called a request for the voting process of the 2020 Presidential election to take place on the blockchain. This would allow for a non-corruptible voting process in which complete transparency is guaranteed.
Other technologies are advancing to the front, knocking on the door and asking for change. BAT, or Basic Attention Token, is a token designed to reward users for viewing ads and sharing information. The internet browser Brave has taken this technology by the horns, allowing users to opt in/out of viewing a set amount (user’s choice up to 5 per hour) of ads. In return, a fractional amount of a BAT token is rewarded per ad to the user, paid out on one set day per month.
This technology is directly opposite to that of Ad-Revenue companies that generate revenue off of your information, whether you choose to share or not. NANO is another technology that is shaking up the payment system, clocking payment speeds at less than 1 second, with no transaction fees, and a hard-drive-friendly blockchain. These are only a couple of the many projects currently in development, with many more industry breakthroughs on the horizon.
The crypto-space is still young.
The best time to invest is the earliest time possible. While Bitcoin has been around for over 10 years, it is still an early time to be getting into the space. Prices have grown 500% in 2020 alone and continue to climb in 2022 so there is more risk but long term believers understand the short term volatility and willing to buy at these higher prices.
We are not advising you to buy or giving investment advice, but we want you to be especially cautious during these peaks.
As Bitcoin’s total supply reaches closer to it’s maximum amount, the price will also become more expensive to buy what you can buy today.
Given many analyst’s conclusions, the price of Bitcoin today is a bargain and is severely under priced compared to what it should be, and what it will likely be in the future.
As technology evolves, the prices of some of these cryptocurrencies will likely follow suit.
With the right strategies in place, you can start ensuring your financial security, and start working towards possible financial freedom. Bitcoin and other alternative currencies have a very high possibility of revolutionizing the way life will be lived. Small steps taken today can help create a financial cushion for yourself, and build an empire for future generations to come.
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