In 2008 someone under the pseudonym Satoshi Nakamoto invented a digital currency that will be earned as a reward for a process called mining. After that, they offered open-source software for payment implementation. The inventor released a new option for online payments, and no one had the minimal idea of what was about to happen.
Meet the Bitcoin. A digital currency that in 2011 had a value between $0.30 and $31.50. No one could imagine the fast development, implementation, and huge interest. Fast forward today in March 2021, the price of a single Bitcoin is $59,066.60.
What happened in the meanwhile? The Bitcoin that started as a black market payment currency was now widely popular that even serious investors were throwing big bucks on it.
It became the leading cryptocurrency; more regular people became intrigued and willing to dive into the new. While it wasn’t promising at the beginning, there are more than 20 well-known companies that accept Bitcoins as payment today!
If you didn’t buy a Bitcoin initially, is it too late to jump on the cryptocurrency train?
Not at all. Bitcoin rose from $13,000 in June 2019 to $59,066 today. The current spike is expected to last for at least two more years. There are serious companies as Tesla investing billions in buying Bitcoins, and it’s expected to hit the six-figure mark by 2022.
What Is Bitcoin?
Bitcoin is a digital currency, a peer-to-peer electronic cash system. It’s an independent payment system not connected to any bank, government, or state.
In 2008 an individual or group under the pseudonym Satoshi Nakamoto invented this cryptocurrency and drafted a whitepaper on Bitcoin. The main idea was for an online transaction to go from person to person without a financial institution‘s assistance. This was intended to benefit both online commerce and users.
Bitcoin comes with low transaction fees and a high privacy level. That’s the main reason why it was good soil for illegal transactions and black market use in the beginning.
Each user stores their Bitcoins in a digital wallet that can be hardware-based or online-based.
How Can You Obtain A Bitcoin?
There are two ways to gain a Bitcoin; buy it or mine it. Since we’re talking about a digital currency, there is no physical mining involved. You don’t have to get your hands dirty and full of blisters, but you’re required to make another type of investment.
Mining is the process of solving complex computational math problems with high-powered computers. These problems are so complex and can’t be solved by hand or even by a regular computer. There is a Chinese hardware company that specializes in producing computers with the best performances for mining Bitcoins.
Bitcoin is a reward for solving the problem. When finishing the process, the miners make the payment network secure and trustworthy. So, basically, it is like mining gold!
In the beginning, mining took a lot of time, but nowadays, miners have perfected and sped up the process by combining mighty machines.
How Many Bitcoins Are There Left?
Bitcoin is finite, meaning there is a limited number of Bitcoins in the world. There are 21 million Bitcoins. After all of them are mined, the currency will then be circulating and become even more valuable.
In the past 10 years since this cryptocurrency was established, people have mined 18.6 million Bitcoins. There are 2.3 million left to be mined, but no worries! It’s estimated to take another 120 years to mine the rest of the Bitcoins.
During the bull market in the last two years, there is a limited supply of Bitcoins since high demand exists. During the bear market, coins were abundant, so it’s hard to clarify how many bitcoins are in circulation today.
Many people have lost access to their online wallets by forgetting their passwords or have thrown out hard drives with Bitcoins on them.
Why Invest In Bitcoins Now
The inventor(s) of this digital currency have mined 1 million Bitcoins. They were never moved or sold from the digital wallet. The creators never made any money from their invention. This leads us to think the Bitcoin wasn’t invented to make one person very rich. The sole purpose was to change the economy and money as we know it.
With the recent downfall of the stock market and Bitcoin’s ascend, people are majorly turning to cryptocurrencies.
Part of them are aggressive investors and are excited about how Bitcoins will move in the future. The other part is looking to cover some losses or add up to their portfolio of conventional investments.
Advisors are still against heavily investing in cryptocurrency. While we’ve witnessed a constant rise in the value of Bitcoin in recent years, there is no guarantee it won’t burst like a bubble.
There is an unlimited amount of information about investing in bitcoins on the internet if your financial advisor is not keen on cryptocurrencies. But remember, cryptocurrency investing is highly risky and speculative.
In January 2018, the price of Bitcoin was $13,412, just to fall over 80% to $3,747 in January 2019. Of course, if you’ve kept your Bitcoins through the storm, you’ll be highly rewarded today.
There’s a limited chance of this repeating partially due to the involvement of many large companies such as Tesla, MicroStrategy, PayPal, Visa, Microsoft, Wikipedia, airline companies, fast food chains, etc. Elon Musk has even announced that Tesla is working on accepting Bitcoin payments in exchange for their cars.
Can You Cashout Bitcoins?
What makes investing in Bitcoins so attractive is the absence of limitations. There is no set mark when you can or can’t cash out or sell your coins.
You can use them to buy something at more than 20 big companies and small businesses. You can exchange Bitcoins for cash at a Bitcoin ATM.
As with conventional investing, you’re obligated not to touch your assets for a limited amount of time to avoid losing any interest.
Bitcoin 2021 Predictions
Bitcoins are not getting rich quick scheme. If you have limited knowledge of the subject, it’s good to look at the Bitcoin values throughout the last several years. No one can promise you for sure what’s about to happen, so if you plan on dumping a lump sum, be prepared for the worst.
If you’re still on the verge, let’s go through the significant 2021 predictions for the value of Bitcoin.
Bitcoin is set up to outperform in 2021 by all major analysts. It’s expected to reach $100,000, $200,000 or even $500,000! Having the constant rise in mind, this is a very logical and trustworthy prediction.
But remember, just in March 2020, at the beginning of the global pandemic, Bitcoin reached $4,916.78. So as long as you invest what you can afford to lose, it’s a great investment opportunity.
Who Owns Most Bitcoins
Satoshi Nakamoto owns 1 million BTC locked in a wallet that hasn’t been moved for almost a decade.
The twins Tyler and Cameron Winklevoss own 1.5million BTC obtained for $11milion in 2013. Fun fact, the brothers sued Mark Zuckerberg for stealing their social media idea. They used part of the settlement money to invest in bitcoins.
Bulgaria is the first country in the world to own an amount of cryptocurrency that surpasses the country’s gold assets. The government seized 213,519 BTC by raiding more than 100 different addresses, all belonging to a group of cybercriminals, back in 2017.
Barry Silbert, the “King of Crypto,” CEO of Digital Currency Group, owns 48,000 BTC.
Tim Draper, the founder of Draper University, owns 30,000 BTC acquired at an FBI auction for $17 million back in 2014.
What To Do After Buying Bitcoins
Congrats, and welcome to the crypto world! Once you bought your first bitcoin, you have three options.
You can store it in a digital or hardware wallet and wait for the ideal time to cash out or sell. Patience is a virtue, as with any other investment, don’t rush out on selling once it hits a lower price. You can use it or parts of it to purchase goods or exchange it for fiat currency.
Bitcoins vs. Gold
While they’re incomparable in real life, gold is a physical asset while bitcoin is digital; many speculate about bitcoin becoming the new gold.
Since ancient times, elders had limited knowledge of investing, but they would purchase something of a high and stable value, like precious metals.
Many years forward, gold is still a safe-haven asset. So how is bitcoin threatening its status? There’s a good campaign surrounding bitcoin, so money is overflowing from gold to buying bitcoins.
Bitcoin is an excellent short-term investment that can bring you a high return, but it’s also high risk. Gold is a stable, conservative way of investing that doesn’t bring a high return.
In the past 11 years, $1 invested in Bitcoins brought $59,065, while $1 invested in gold generated a 2.2% gain. However, the precious metal has almost zero chance of not returning your investment. There’s no guarantee you won’t end up with a loss of over 80% of your investment with bitcoins.
FAQ
What is dirty Bitcoin mining?
The constantly growing interest in purchasing Bitcoins leads to massive unethical mining. More than 90% of Bitcoin mining is done outside the United States and with dirty energy.
In April 2020, more than 65% of the total worldwide Bitcoin mining occurred across 3 Chinese provinces. Miners use whatever power source is the lowest-cost, like coal burning.
This is the reason people consider Bitcoin mining as a dirty activity. There are calls for a crypto carbon tax since the Chinese researchers forecast bitcoin mining to produce an equivalent of 130.5 million metric tonnes of carbon emissions by 2024.
Buying sustainably mined Bitcoins is the only way to eliminate the deadly impact it has on the environment. Miners in the US and Canada, for example, use natural gas, wind, and solar power for mining.
Does Bitcoin rise every year?
While focusing on the ups and downs of Bitcoin in a year, we neglect the overall rise in the price since the beginning of time.
When we look back, the lowest price of Bitcoin is higher every year. In 2013, the lowest price of Bitcoin was $70. The lowest price in 2019 was $3,358. Even if you cashed out at the lowest price, that’s still tremendous growth!
Final Thoughts
If you weren’t among the pioneers in the crypto world, it’s not too late to join them now. Cryptocurrency is the future, a safe-haven, according to half the financial analytics, and a bubble waiting to burst according to the other half.
The mixed messages might be having you on your toes about whether you should dive in. If you have the money you won’t be devastated to lose, I would highly suggest investing in Bitcoins right now.
Keeping in mind the highly optimistic predictions for the year, you will be sure to return your investment at least.
Have you taken a look at other cryptocurrencies? Do you invest a dollar here and there in the hope of experiencing bitcoin’s success in 10 years?
