What Is Bitcoin and What Are Its Benefits?
Bitcoin is Michael Myers. It‘s been coming for years. It never gives up
Bitcoin is a digital currency created by Satoshi Nakamoto — an unknown person or team — who outlined the technology in a 2008 white paper.
Bitcoin’s appeal is simple:
- It’s Decentralized: Any two people, anywhere in the world can send each other money without the involvement of a bank, government, or any other financial institution. This transaction can be completed in minutes.
- It’s Deflationary: Only 21 million Bitcoins will only be produced. That means that by 2140, all the Bitcoins ever created will be out on the market. This is starkly compared to the US dollar, which has no end to how many can be printed out of thin air.
- It’s Transparent: Bitcoin is traded on a public network. Every transaction involving Bitcoin is tracked on a technology called the Blockchain. In simple terms, Bitcoin’s Blockchain is like a bank’s ledger and records every transaction back to the first-ever completed. Although users can access details about transactions, they cannot access identifying information about the users making those transactions.
- It’s Backed By Code: Arguably Bitcoin’s strongest appeal is that it’s backed by unchanging laws. Bitcoin’s inflation rate was set in stone by code, not humans. This code is only changeable through a vote where the entire network has to agree to change it. This has failed several times.
This is why Satoshi created Bitcoin:
“What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party,” wrote Nakamoto in a white paper introducing the open-source technology.
Where Can I Buy Bitcoin Safely?
After Elon Musk and Tesla bought $1.5 billion in Bitcoin last week, I’d say cryptocurrency is on the verge of going mainstream. Additionally, you can buy fractional shares of Bitcoin. At the time of this article, the current price of one Bitcoin is $47,865.00 (An increase of 224% in 2020).
You can buy Bitcoin in many different ways in 2021, but here are a few popular ones:
- Bitcoin Exchanges like Coinbase, Gemini, or Binance
- Commission-free brokerages like Webull or Robinhood
- Fintech apps like PayPal or the Cash App
- Or earn interest on your cryptocurrency at BlockFi
Where Do I Keep My Bitcoins?
If you buy Bitcoin through a brokerage or any of the aforementioned fintech apps, you do not own a physical [or virtual] coin. You are investing in the value of Bitcoin the same way you’d invest in a stock.
However, if you buy Bitcoin through a cryptocurrency exchange then you will be issued a digital wallet. Your wallet will be given a key [imagine an email address for simplicity] so you can send or request money to any other wallet across the world.
You can also buy a physical-digital wallet which is an even more secure way to store your Bitcoin. Unlike bank accounts, stored Bitcoin isn’t insured by the FDIC.
Will Bitcoin Be Deregulated?
Regulators could simply ban all institutions and intermediaries from transacting with cryptocurrencies. It just happened in Nigeria last week.
What’s more likely, in America at least, is that the government will start tracking customer information and increases security requirements for cryptocurrency exchanges. Think a new age IRS, but for cryptocurrency.
I think Bitcoin will be regulated in some shape or form. There will be a lot of kicking in screaming at first.
However, if the regulations aren’t harsh, and ultimately protect Bitcoin as a legitimate asset, as well as make it easier for average people to invest in it (e.g. a Bitcoin ETF) then regulation will strengthen Bitcoin.
US Secretary of Treasury Janet even acknowledged the benefits of cryptocurrency. In addition, Wyoming senator Cynthia Lumis owns Bitcoin and wants to further explain it to congress.
Still, if we look at the regulation of social media, for example, then we know that the government will always be behind technology. I don’t see that changing anytime soon.
Will Bitcoin Make You Rich?
Yes, I do believe so.
Within the next few decades, Millennials will become the wealthiest generation in history. Baby Boomers are set to pass on a massive $68 trillion to their children, the largest generational wealth transfer ever.
Generation X may be next in line to inherit the wealth shift, but it doesn’t matter. Millennials are leading the charge on Bitcoin, and that’s likely going to leave them the wealthiest generation ever.
Bitcoin is the strongest asset ever created. It’s gold 2.0. It has all the benefits of gold without the scare that one day we will find a huge deposit of gold and the asset will be devalued entirely.
Bitcoin is Michael Myers. It‘s been coming for years. It never gives up. Even when you think it’s dead.
“If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.” — Satoshi Nakamoto, creator of Bitcoin
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions. The author owns Bitcoin and Ethereum. It’s important to note that cryptocurrency is an extremely volatile asset.
