There are so many cryptocurrencies, each working differently with different rules and mechanisms from the others. People however prefer bitcoin to every other coin.
Could it be because of bitcoin price, or because it is the pioneer of cryptocurrency and digital currency? Whatever reason it may be, the question on most minds is ‘why do I need to invest or buy bitcoin?’
Bitcoin and other coins are sometimes referred to as virtual currency, cryptocurrency, digital currency. Also, every other coin which is not bitcoin is referred to as an alternative coin or as commonly called, Altcoins. Bitcoin is the first successful digital currency introduced to solve the problem of trust and decentralization.
Its usage has evolved as it is now used as a means of purchase, an asset, a store of value. Could that be the reason a lot of people are buying and investing in bitcoin?
Before we dive deep into the reasons why you should invest and buy bitcoin, let’s take a brief look at bitcoin itself and how it works.
What is Bitcoin?
Amid the global financial crisis of 2008, an individual or a group of persons called Satoshi Nakamoto invented bitcoin having thought of how to solve the problem of trust in the third-party system. Thus, the first decentralized digital currency was created.
This process raised so many questions – Bitcoin will have many users across the world without them knowing each other, how do you expect a person to trust someone they don’t know? How can users be sure that payment was made? and how can we rest assured that the money won’t be stolen? All these questions were thought through by the inventor and were solved with the help of blockchain technology.
Bitcoin as defined by Antony Lewis in his book, ‘The Basics of Bitcoin and Blockchain’ is “Digital asset whose ownership is recorded on an electronic ledger that is updated simultaneously on about 10,000 independent operated computers around the world that connect and gossip with each other.”
The electronic Ledger mentioned by Antony Lewis is the Bitcoin Blockchain. Records of transfer of ownership are kept on the ledger making it easy for anyone to buy, HODL (Hodling On for Dear Life, a slang for HOLD) and send bitcoin to other people with a receipt. The bitcoin transaction is kept in plain and simple text for everyone to understand.
If you’re lost in all the slangs used in the crypto community, check out this article that explains 100 common crypto terminologies as used in the crypto world.
That is the simplest explanation of Bitcoin and blockchain. Now how does bitcoin work, and what is the purpose of bitcoin?
How does Bitcoin work?
Bitcoin was proposed to be a solution to double spending using a peer-to-peer network, you can send value from A to B electronically, without physical movement of items or using third party intermediaries.
To fully understand how bitcoin works, you have to always remember its purpose, which is to send money from one party to another, without anyone monitoring your transactions, or without you taking permission from someone before they could send money, and without needing anyone to validate your payments
The blockchain is managed by software running on computers that communicate with each other forming a network. The network is in charge of carrying out the following functions:
- Connecting users with one another
- Store transactions
- Validate transactions
- It is also used in mining
- Used to manage addresses
- Create and send transactions
Transactions are created using wallet software, which is authenticated with a unique digital signature. There is no central body that controls the ledger or censor transactions.
With all these brief explanations on bitcoin and how it works, why do you need to buy or invest in bitcoin, what is the future of bitcoin?
Why Buy or Invest in Bitcoin
This is the most important part of the article, so many people have asked the question a thousand times. Lots of people have taken the opportunity and made fortunes out of it and lots of people are still being skeptical about it. But here are four simple reasons you should buy or invest in bitcoin.
Bitcoin is the future of our currency
According to analysts, the price of Bitcoin is still in its early stages as it is still less than $40,000. The adoption of bitcoin is increasing day by day, people are creating businesses around it.
Governments of nations around the world have started adopting it as a means of payment for goods and services. Policies are being put in place for it and the interesting part is, it is still less than 20 years of age.
You can still make money with Bitcoin
Though, people are having the feeling that it is quite late to buy or invest in it because of the bitcoin price. But the truth is it is never too late to invest in it. Bitcoin price is still projected to enter $100,000 in the next few years. The current price is still a fraction if we are to look at the potential fortune you can make from it.
Bitcoin is a store of wealth
Bitcoin is just like gold, which people run to when there is economic hardship. Bitcoin price may rise and fall truly but it can’t go to the extent our fiat currencies go when they lose value against the US dollars. It is universal and is used as a deflationary currency. It can be used to store and preserve your wealth over time and leave it to grow as an investment. What we have learned from BTC price in a short time is, it is an investment you can earn a high return on in a short period.
It is still in its growth and development stage
The market is still young, it is in its growth and development stage, with lots of potentials. Bitcoin is the first successful digital currency that still has little competition in the market. Although there are lots of cryptocurrencies out there, people feel more comfortable dealing with bitcoin being the father of all cryptocurrencies.
How to check Bitcoin Price
If you have a change of heart and you are willing to join the moving train and you want to buy and invest in bitcoin, you can always check out the leading p2p exchange, Remitano.