This is not financial advice, Please do your own research***
Intro
If you’re reading this, congratulations! You’ve taken the first step towards understanding one of the most revolutionary inventions in history: Bitcoin. This article will help you learn everything else you need to know about bitcoin and its future.
The first thing to do is understand what money is. A history of money.
Money is a medium of exchange that allows us to buy goods and services, store value, and measure the value of goods and services. That’s it! In order for something to be money, it must satisfy all four functions:
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Medium of Exchange – A good or service that people are willing to accept in trade for other goods or services
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Store of Value – The ability to hold its purchasing power over time
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Unit of Account – A way to quantify goods and services in terms of their price (e.g., $1/gallon)
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Standard of Deferred Payment – A way to pay back debts without having them come due at the same time
The nature of money can be thought of as a science.
The nature of money can be thought of as a science. Like so many other sciences, it has its own vocabulary.
Money is an agreed upon medium of exchange that allows individuals to exchange goods and services without having to barter directly with one another (i.e., using paper currency). This makes trade much more efficient because it reduces the costs associated with finding someone who wants what you have and then trying to find someone who has something you want but isn’t willing to trade them for any reason – which can vary greatly depending on supply & demand factors!
Gold as a store of value. Paper as a store of value.
Gold has been a good store of value for thousands of years. It’s valuable, it’s useful, and it can’t be copied or destroyed like paper money. Paper money isn’t nearly as strong: it can be used to start fires and stuff down toilets, but that’s about it.
Paper money is also not really an asset at all—it’s just a note promising someone else will pay you something later. This is a big problem in today’s economy, as the U.S dollar(The world Reserve currency) is no longer backed by any real assets. It was removed off the gold standard back in 1971 by Nixon. This in turn allows for easy money printing and causes inflation. Which in turn takes away the peoples buying power
Gold may seem old-fashioned compared with the digital world we live in today, but it takes energy to create and is limited in supply. Making it a decent hedge against inflation. How ever, its not always feasible to be carrying around bags of gold. And takes a lot physical storage space making it less then ideal as a payment rail.
Bitcoin as a store of value. Why bitcoin?
There are several reasons why bitcoin will likely be the most popular cryptocurrency to store value in.
First, bitcoin is the most liquid of all cryptocurrencies. This means that it’s very easy to move around and convert into other assets (such as cash). If you want to buy or sell something with your bitcoins, there are plenty of places where you can do so quickly and easily. Bitcoin also has a very high level of security (much higher than any other cryptocurrency) and has proven itself reliable by not being hacked since its inception 13 years ago—something that cannot be said for any other major cryptocurrencies. The combination of these three qualities make bitcoin particularly useful for storing value over time—you don’t have to worry about losing your money because it’s so easy to use it wherever you want!
Fiat currencies are struggling.
While the dollar has held its value fairly well throughout its history, it’s hard to predict what will happen in the future.
There are two main problems with fiat currencies: they are not backed by anything tangible and they are not stable. In other words, there is no physical asset that backs the currency and so it can be manipulated at any time by central banks and governments. Fiat currencies also lack predictability because their value can be changed for political reasons. For example, if a government wants to “stimulate” an economy, they will print more money (inflation). Another political issue that affects fiat currencies is war — every time there has been war in recent history (the United States fought in Iraq twice) people rushed into gold and silver investments because they’re seen as safe havens from financial instability caused by geopolitics.*
Bitcoin is digital gold, and digital cash. Bitcoin has no central bank or government behind it, so its value doesn’t change with the whims of politicians or bankers
Bitcoin is digital gold, and digital cash. Bitcoin has no central bank or government behind it, so its value doesn’t change with the whims of politicians or bankers. It’s also not controlled by any one person or group of people—or any one country or government. That means there’s its hard manipulate bitcoin prices to benefit yourself at the expense of others. Because there is no central entity that can manipulate a cryptocurrency’s supply (like governments can print more money), the only way to increase its value is through supply and demand in the market—which means you’ll have better control over your investments.
Bitcoin is scarce and you can never create more than 21 million of them, making it a deflationary asset by nature
The most important thing to understand about Bitcoin is that it has a fixed supply. There are 21 million Bitcoins that can be brought into existence, and no more than 21 million will ever exist. This means that Bitcoin is deflationary by nature, because there’s only so much of it to go around and its value in theory should increase as time goes on.
Other cryptocurrencies aren’t like this—some have unlimited supplies and some have really high inflation rates—so it’s important to understand why Bitcoin was designed this way before you invest in other coins or tokens.
Bitcoin is fixed in supply and predictable, making it easy to plan for the future around
Bitcoin is deflationary, meaning that there are a finite number of bitcoins in the world. The maximum amount of bitcoin that can ever be created is 21 million. At this moment, the number of mined bitcoins stands at 19.17 million, with the last 1 million expected to be mined over the next 118 years. Yes a 118. The amount of Bitcoin will be added to the network halves every four years. This is called the Bitcoin halving. As an example a new blocked is mined every 10 min as such a miner is rewarded 6.25 BTC for the work they did to mine and secure the network, and validate the transaction. That Block reward will halve in 2024 and the new reward will be 3.125
Because bitcoin has a fixed supply, it’s easy to predict how many will be created over time . This makes it an ideal store of value for investors who want something stable in their portfolios—and for people planning for retirement!
Bitcoin can act as a hedge against inflation; but then again you’ll want to do some research before making an investment decision because there are many factors involved including market speculation which could affect Bitcoin prices negatively in short term or longer term financial scenarios. Learn about how to get Bitcoin here
Bitcoin is permission-less and is censorship resistant. You don’t need permission from anyone to own or use it
Bitcoin is permission-less and censorship resistant. You don’t need permission from anyone to own or use it, unlike your bank account(Any time you spend using your debit or credit card some one has to approve it). Bitcoin is universal and accessible to all people in the world, regardless of their location or background. Bitcoin is digital gold, but it’s much more than that as well; it’s also digital cash because transactions happen instantly and aren’t subject to third-party approvals (unlike credit cards). Its transaction fees are lower than using other payment methods such as PayPal or bank transfers—especially if you’re sending a large amount of money—and there are no geographic restrictions on where you can spend your bitcoins around the world.
This means anyone can send money anywhere very quickly with minimal cost compared to other financial services providers such as Western Union which charge high fees due to their centralized nature (they require third parties like banks).
Bitcoin is global and universally accessible
Bitcoin is a global currency, and it’s universally accessible. It doesn’t matter where you live in the world, whether you’re rich or poor, young or old — anyone can use bitcoin. Bitcoin is not controlled by any government or bank; it isn’t controlled by one country or region of the world. It works across borders and across cultures in an open-source network that anyone can join.
Store your bitcoin safely by understanding how private keys work and how to protect them with hardware wallets like CoolWallet or Trezor
The first step in protecting your bitcoin is understanding how private keys work. Private keys (or seed words) are basically the access codes to your bitcoin wallet which allows you to spend, send, and receive bitcoins. If these are lost or stolen then there’s no way of getting them back.
A great way to store your private keys securely is with a hardware wallet like CoolWallet, Trezor, SecuX, Ellipal. Hardware wallets keep your private keys offline, making it much harder for hackers and thieves to get access to them. You can also use software wallets like Mycelium but they don’t have any extra security features so make sure you follow some basic rules when setting up. Read more about choosing the right wallet here
Conclusion
Bitcoin is a new way to transact and it’s not going away anytime soon. It may take some time before it becomes fully mainstream but as more people learn about its benefits, they will start using it more frequently than ever before. There are many reasons why people are excited about bitcoin but the biggest reason – in my opinion – is because it empowers individuals around the world by giving them access to financial services which were previously only available to those with capital or connections
The bottom line: The future looks bright for bitcoin…
