When all the Bitcoin are eventually mined, there will be 21,000,000 of them in existence. Yes, that's twenty-one million only. And that's all there will ever be. In a world of over seven and a half billion people, that is some serious built-in scarcity.
It's easy to see that if demand for Bitcoin, and access to it, continues to increase across the globe, then matching growth in the price will follow. If this scenario eventuates, then holders of even one Bitcoin will find themselves in a very select group and in a very privileged position.
While the outcome is by no means certain, these are exciting times that we live in. If the outcome was known, and positive, then the rush for Bitcoin would be unimaginable. Just as the rush to register common one-word generic domain names would have been at the start of the internet, if it was known what internet's future would be.
It was the uncertainty of the outcome that created the opportunity for those investing in domain names during the infancy of the web. There was risk involved and ridicule from those who thought that early investors were wasting their time and money. It turned out that they were acquiring scarce, sought after and highly valuable assets.
If you own Bitcoin or are considering acquiring some, then I highly recommend that you read the Bitcoin white paper, titled, Bitcoin: A Peer-to-Peer Electronic Cash System. It is the original document that introduced Bitcoin. Reading through its nine pages will sharpen your understanding of what Bitcoin is, and how it works, even if you're unfamiliar with some of the terminology in the document.
Start reading here: Bitcoin: A Peer-to-Peer Electronic Cash System
There are many people who want to get into Bitcoin but think that they've missed the boat. They look at the current price of over $4,000 and believe that it's too late for them. "If only I'd bought Bitcoin this time last year," is a familiar lament.
This is understandable, as a lot of 'would be investors' simply do not have the available resources to purchase even a single Bitcoin with the price where it is at the moment. If that's you, don't worry, there are still ways that you can get into the Bitcoin market. Take a look at the steps outlined below and see if there are any that you could take today to launch your Bitcoin journey. When considering these steps and any other investing strategies, always go by the rule, 'Only invest what you can afford to lose'.
1. Focus on entering the market by getting some Bitcoin, rather than a whole one. A Bitcoin can be divided down to eight decimal places, so you can start with a small amount.
2. Regularly add to your Bitcoin holdings, even if it is a modest amount each time. Remember that those who used this strategy when the price was $1,000, and managed to accumulate even one quarter of a Bitcoin, now have more that $1,000 worth of Bitcoin.
3. Think of Bitcoin as a long term investment and a store of value. It can be an extremely volatile asset, with huge fluctuations in price both upwards and downwards. If you have invested only what you can afford to lose, which is highly recommended, you should hold your Bitcoin through these movements in price. If you try and trade it, you will most likely lose. Even though Bitcoin has suffered some huge crashes in price, so far, it has always come back over time to reach new all time highs. Those who bought at $1,000 only to see the price drop to as low as $200, and held their Bitcoin until now are very glad that they did.
4. If money is really tight and you don't have the funds for a small investment, see if you have any salable items that you no longer want, use or need. If so, get selling and use the proceeds to get your foot in the Bitcoin door.
5. Consider sacrificing a portion of your entertainment or discretionary spending, providing you have any, and use it to begin or add to your Bitcoin nest egg. This is not a suggestion to go over the top, cutting out all the things that you enjoy to the detriment of yourself or your family. Just look for little things that you wouldn't mind reducing for a while, or every now and then. Small amounts invested in Bitcoin add up, and as we've seen, can grow exponentially.
6. If you have good writing skills and/or a decent following on one or more of the social media platforms then this step might work well for you. Join Steemit.com and post good original content there. When others like what you've posted and upvote it, you earn Steem. You can then exchange Steem for Bitcoin. This is one way that you can start investing in Bitcoin even if you have no money.
7. Whatever you do, and this bears repeating, only invest what you can afford to lose.
The image above is of a scam website, claimbtcgpu.org, which has been set up to steal Bitcoin from unsuspecting people who are new to the cryptocurrency space or unaware of the security protocols involved.
While the site claims to assist you in claiming your Bitcoin Gold, it has no association with the real Bitcoin Gold, whose legitimate and official website can be found at btcgpu.org. You can read my article about Bitcoin Gold here.
The scam site looks professional, provides detailed information, has a Bitcoin Gold logo and uses a domain name that is the same as the official site, except for having the word 'claim' at the front. What gives it away as a scam is that it asks you to enter your Bitcoin Private Key or Bitcoin Seed, as can be seen in the image below.
Never share your Bitcoin Private Key or Bitcoin Seed with anyone, because having either of these enables someone to access and steal your Bitcoin. Any website that asks you to provide them is a phishing site that is attempting to scam you. The same goes for emails, texts or phone calls. It doesn't matter what they say, or what excuse or reason they give. The only reason for wanting it is to steal from you. Never, ever do it.
Bitcoin's parabolic rise during 2013 from $13 to $1,100 caught the attention of the mainstream media and brought many new investors to the market. For those who bought in at the top, the sudden crash to below $700 and the continuing slide downwards to a low of just over $200 by mid-January 2015 hit hard. Many of these people decided to cut their losses and cash out during this period, thinking that it was the end of the road for Bitcoin.
Little did they know, or anyone else for that matter, that 2017 would see Bitcoin surge to a price that dwarfs that of 2013. There is also talk circulating, that Bitcoin will go significantly higher again before the year is out. With this in mind, and with similar stories abounding in 2013, it is worth looking back to see what we can learn from the past that will help us to invest wisely today.
1. Only invest what you can afford to lose. Many people invested at $1,100 feeling certain that the price of Bitcoin would continue to rise. It didn't. Those who needed that money for daily expenses and were hoping to make a quick buck got burned. Consider the worst case scenario and where you would be financially if the price crashed.
2. Only invest what you can afford to leave in the market long term. Those who bought Bitcoin at $1,100 in 2013 and have held until today are now in a very strong position, having made a significant profit. This, however, has only been made possible by their ability to hold. For three years they were carrying a loss, and if their circumstances determined the need to cash out during that time, they would have had to take the loss, rather than receive the upside that lay ahead.
3. If you have money invested in Bitcoin and the market crashes, hold if you can, rather than sell at a loss. There may be big rewards ahead in the future that you can't imagine right now. Just ask those who have held strong since the 2013 crash.
4. If the market crashes, and you have additional funds available that you can afford to lose, this may be a buying opportunity. Those who invested more money in Bitcoin during the lowest points after the crash, and held, are now very glad that they did. Of course, there is risk involved, as the market may not react the same way in the future. That is why, and I can't emphasize this enough, you must only invest what you can afford to lose.
5. Take some profits if you need to, but leave your seed investment there so that it can continue to produce profits for you into the future. In other words, don't kill the goose that lays the golden eggs.
I recently attended a Cryptocurrency trading seminar where I picked up a couple of coupons for $10 worth of free Bitcoin. To receive the Bitcoin you need to sign up to a particular exchange that is also a trading platform. I offered one to a friend and he came up with a great idea. He is going to use the Bitcoin and the account to help teach his two elementary school aged children about money.
Children of that age receive minimal financial education at school, and the media targets them with messages encouraging constant consumption and to always desire more. Then there are the advertisements that are supposedly aimed at adults, but that kids take in nonetheless. Things like, gambling on sport is fun and rewarding, quick loans are an easy solution if you're short on cash and credit cards are a painless way to get what you want, when you want it.
This Bitcoin account, even with minimal funds, will provide an excellent experiential teaching tool for this dad, with many possibilities. He will be able to demonstrate and have his kids participate in saving, investing and trading. Through this they will learn about risk and reward, gains and losses, price fluctuations, exchange rates, analyzing charts, trading patterns and the differences between crypto and fiat currencies.
Maybe you could try something like this with your kids too.
On August 1st 2017 the Bitcoin Cash (Bcash) unfriendly fork of Bitcoin took place. This created an altcoin with an increased block size, with the aim of replacing the original Bitcoin as the number one cryptocurrency. In reality, what it meant was that holders of Bitcoin, who controlled their own private key, received free cryptocurrency dividends, in the form of an equivalent quantity of Bcash.
During November 2017 another unfriendly fork of Bitcoin is coming, called SegWit2x. In preparation for this event, make sure that your Bitcoin is securely held on a storage device and not at an exchange. That will ensure that your Bitcoin is safe during the fork and that you don't miss out on the free cryptocurreny dividends that will come as a result. This free crypto could then be traded for more Bitcoin, so it will give you another opportunity to increase your holdings of the number one coin.
SegWit2x is not to be confused with the upcoming Bitcoin Gold (Bgold) friendly fork, which I wrote about here.
BTC.com is the highest publicly reported sale of a Bitcoin or cryptocurrency related domain name.
According to NameBio.com, the sale was brokered by Domain Guardians, who are now part of the Evergreen group, in August 2014 for $1,000,000. DNJournal.com also reported the sale at the time, and listed the buyer as GAWMiners, although the domain is currently registered under privacy protection.
When the sale was made, the price of a single Bitcoin was around $550, so it would be very interesting to see what the domain would fetch in today's market.
In May 2015, a new website was launched on the domain. Today, the BTC.com site provides details about the latest Bitcoin blocks mined, pool hashrates and the status of the network. It also features various statistics, tools, apps and a wallet for Bitcoin and Bitcoin Cash.
"I saw Bitcoin as a cool new technology, not a store of value or a way to make money." That is what a young guy told me his view of Bitcoin was when he discovered it while still in high school.
He bought in when the price of a Bitcoin was just $5 and spent most of them, just like a regular teenager would do with their pocket money or income from a part time job. Fortunately, he did save a small amount, and hopefully he's kept it, as the price at the time of our conversation was around $800.
How perspectives on the price of Bitcoin can change. It's easy with hindsight to say someone shouldn't have spent it or cashed out, or that they should have bought more. For those who bought in at pennies, the price rise to $5 must have seemed phenomenal, while for those who paid $800, the thought that others got Bitcoin for a mere $5 would be mind blowing. And now? Boy, would people who paid between $4,000 and $5,000 love to get their hands on some $800 Bitcoin!
What of the future? Will there come a time when those who paid $5,000 will be the envy of others because they got in while Bitcoin was still cheap? Time will tell.
The next Bitcoin hard fork, Bitcoin Gold, also known as Bgold, is almost upon us. It is a friendly fork, as they are promoting themselves as an altcoin, unlike the previous unfriendly fork, Bitcoin Cash (Bcash), that was set up to try and replace Bitcoin as number one in the cryptocurrency market.
As was the case with Bcash, if you hold Bitcoin (outside of an exchange) on the 25th of October 2017, you will receive the equivalent number of Bgold on the 1st of November 2017. What the price will start at is anybody's guess, however, it will give you some free crypto that you can then exchange for more Bitcoin if you're looking to increase your holdings.
You can keep up to date with the latest news on the Bgold fork at the Bitcoin Gold Twitter feed and Bitcoin Gold's Official Website
Bitcoin to the Moon is a blog dedicated to following the original cryptocurrency on a journey to its ultimate destination.
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