When I first heard about bitcoin back in early 2017, I thought that it is just a scam and I haven’t done any reasonable research. Then I heard on the news that bitcoin price is going up. I started researching bitcoin afterward and my journey with bitcoin started at the point when I understood the core and fundamental values of Bitcoin.
Here, I will represent the top reasons why I invest in bitcoin and what are the key parameters that give value to bitcoin.
I will also share with you why you should NOT buy bitcoin as it is very important as well for you whether you decide to invest or not.
So what is bitcoin?
It is a decentralized digital currency There is no single entity that controls this currency. No central bank, no third party, no government. It is also peoples’ money. Communities send Bitcoin peer to peer with the help of blockchain technology and without intermediaries.
Reason 1: The fundamental rule of bitcoin
Bitcoin has a limit of 21 million which means there is no possibility to produce more. This is a rule which is public and cannot be changed in the future, ever.
Look at the world governments: they print more and more money every year and steal the purchasing power of its citizens. Is this fair? In my opinion, the answer is “no”. They print money in order to compete with other countries in having a strong currency and on the large scale preventing the upcoming recession. Moreover, the money the governments print is not backed by gold! This is another story and I think all the fiat currencies should be backed by gold. You can do your own research on this if you would like to.
Reason 2: Bitcoin is scarce and the supply is limited.
At the moment there are 18 million coins mined several millions are lost which means in reality Bitcoin is even scarce. The miners will mine all bitcoins until around the year of 2140. Approximately every 4th year since its creation bitcoin supply is cut half. This process is also called bitcoin halvening.
If we distribute bitcoin’s supply evenly across to the overall population of the earth, then each person could have only 0.023 bitcoin.
If we compare scarcity of bitcoin to the gold then we can state that we cannot define what is the final total supply of gold. For me gold is also very valuable asset, however, in this case the fact is that bitcoin is scarce and have limited supply and gold is scarce but does not have a total limited supply.
If something is scarce then the demand will increase over the time. I strongly believe that the scarcity is one of the things that create value. This is a very big reason as to why the price of bitcoin is going up and up every year.
Reason 3: Bitcoin is transparent
One thins is for sure, bitcoin is more transparent then most of the central banks around the world. Do you know how much money is your government printing? What is the current supply of circulation? How can we make sure what they say is reality? What is the monetary policy of your government in the short middle and long term? I cannot come up with answers to these questions. We cannot audit them!
Bitcoins is transparent. All transactions are visible and anyone in the world can access, check and audit those transactions. They are recorded on the blockchain which acts as a public ledger.
Reason 4: Bitcoin is uncensorable
There are many countries