So we hear about bitcoin and cryptocurrencies a lot in the media these days (or from your colleague probably named Dave who thinks he is a cryto-guru and sends you tons of info which you rather throw away). Or maybe you have seen the adverts online for Billionaire investments from kids who made their 1st billion from bitcoin which of which might be believable. Though what is the low-down on bitcoin? Is it a market craze should you follow it as some have FOMO (fear of losing out). Or is it a “bitcoin bubble” as Warren Buffet says which will eventually pop anyway. Should you invest? Read here to make an informed decision!
What is Bitcoin
It is a decentralized cryptocurrency that is currently being widely used almost everywhere in the world. Decentralized meaning it is not controlled by any bank or institution which generally controls money on the world. It touted as a P2P (payer to payer) payment system which allows you and me to pay for stuff without a middleman. These transactions are then recorded in visible ledger and encrypted records that are verified by network nodes in packages called a blockchain.
People are rewarded by receiving Bitcoins for creating records using computer processing power in a process called bitcoin mining. Miners have special programs and GPU/CPU installed in order to mine bitcoins or other cyrptocurrencies.
Bitcoin was created an anonymous developer/ developers in 2009 under the pseudonym Satoshi Nakamoto (in which the smaller fraction of bitcoin is called the Satoshi or 1/100,000,000 or a bitcoin).
There has been lot of people who have high hopes for bitcoin but there has also been a lot of people who are skeptical about bitcoin due to its volatility.
To Hodl or not to Hodl That is the Question
A lot of attention has been drawn to bitcoin lately as it has almost increased by 1400x in price or 300% within a span of few years. Though now it is currently dropping form it’s high of US$ 10,000 to current price of US$ 8,400/ per bitcoin. Again, this shows just how volatile bitcoin can be and a huge question: to Hodl or not to Hodl?
Hodl being a brand new word internet users made up if they wanted to “hold” onto their bitcoins or to sell it. Seems they were typing so fast that like Trump forget the spell-checker hence the word “hodl”.
To people are looking to buy or sell, it seems that blockchain technology still holds a lot of potential. Due to its secure system and ability to package quite an amount of information some have already looked its potential of blockchain for other technology. Some companies instead of selling stocks sell coins as part of their company which is called ICO (initial coin offering) which is sort of like a cryptocurrency. So bitcoin and its technology is still being explored even as we speak especially on how to make it useful for all. So it is a good idea to invest in.
On the other hand staunch opposers 1 famous dude named Warren Buffet for example feels it is an imaginary currency something that can not be held and could magically disappear. And governments have started cracking down on bitcoin especially as a lot of fraud and hackers use bitcoin to in order to convert money. This is also 1 reason why the price of bitcoin is currently tanking. Though some argue that similar to money or real estate leases, people only see it as valuable as is its value written on paper. No different to computerized records.
Currently cryptocurrencies are so easy to make that there is some many stupid ones as it literally takes minutes that some have come up with something called “Jesus Coin”. Seriously no joke. No wonder people are worried,
Hodl verdict: Hodl, but just enough. Never invest all of your money in it.
Being a FOMO
Some might have a fear of missing out (FOMO). Personally never let FOMO be the reason that you want to invest in bitcoin. As FOMO promotes fear and fear triggers you to make hasty decisions and you will do something you regret, especially due to bitcoin madness a lot of money-making schemes are based on bitcoin.
Some schemes guarantee you returns of 300% within 1 month. And some use ICO for people to throw money in their ideas. Some use programs that secretly hack into your bitcoin wallet to take a little of your bitcoin you bought or mined for their use.
Never invest in bitcoin or other cryptocurrencies due to FOMO! Always throw caution to the wind.
Word of Caution on Bitcoin and Crytocurrencies
The best thing to do is do some research on the cryptocurrency you want to invest in. Put a part of your investment within the crytocurrency you are most comfortable with (even if it is bitcoin) and leaving it. Never lose sleep due to the price of bitcoin. Because it is so volatile, if you kept on looking at the price of bitcoin it will definitely make you lose some part of your sanity.
Crytocurrencies and blockchain technology is great to put something in if you are a believer in future technology though it should always be something you will be comfortable with and not because someone pushed you to it. Always work your way around cryptocurrencies carefully.
Actually John Oliver makes a good intro on cryptocurrency you should take a look at:
As our world gets more and more computerized some cool and strange ideas will come up and it is completely up to you if you trust that technology or you prefer the tried and tested.
Bitcoin is not for everyone even though bitcoin and its fellow cryptocurrencies have potential they will always be computerized records. Again like money it is the value you see it holds.
So what do you think of the Bitcoin trend? Do you prefer to Hodl? Any cool ICO that you know are trending? I would love to know. Please leave a note to share.