“Bitcoin is better than currency.” – Bill Gates
“Bitcoin” the word you will hear more often in the next few weeks and all of a sudden the experts will be coming out of the woodwork. A bunch of people are already offering the courses and training for investments.
I am going to attempt to explain what is happening from a laic’s point-of-view. I don’t know much about future but I have built my entire career on being first or early to the game.
“Bitcoin surges through $11,000 less than 24 hours after topping $10,000” this is all over the news and it certainly makes one curious to know more about it and potentially invest in it but be very careful there are networks and organisation capitalizing on people’s FOMO and greed. There are pumping and dumping operations and some coin offerings that are pure scams.
One of the key driving forces behind the increased value of Bitcoin is its widespread usage across the globe, with many now opting to make payments via Bitcoin rather than using other methods. For consumers, being able to use Bitcoin provides increased ease and convenience when it comes to online transactions with the added bonus of security and peace of mind – something that you do not always get when you use payment methods such as credit and debit cards due to the higher risk of fraud.
Another reason why usage has increased is because acceptance has also increased. There are now many places where consumers can pay by Bitcoin, as many companies now accept this as a method of payment. From eateries and coffee shops through to real estate companies and more, Bitcoin is now accepted in a wide variety of establishment.
Bitcoin is a “cryptocurrency” – a type of currency that exists only in the digital world. But the main reason of Bitcoin’s success is not because it’s a digital currency but the technology behind it known as “BLOCKCHAIN”. I will explain the blockchain from a technical point of view some other time but If we were to define “blockchain” as a technology separate from Bitcoin, it might look something like this:
“Blockchain technology offers a way for untrusted parties to reach agreement (consensus) on a common digital history. A common digital history is important because digital assets and transactions are in theory easily faked and/or duplicated. Blockchain technology solves this problem without using a trusted intermediary.”
“Bitcoin is by consensus the most secure computer network ever developed,” says Professor David L. Yermack, chairman of the finance department at New York University’s Stern School of Business
IS BITCOIN A BUBBLE?
Hard to say. It’s true that the value of one bitcoin has gone from around $300 in 2015 to above $10,000 today.
In 2010, one Bitcoin was worth a mere $0.003, meaning if you had $1, you could buy about 333 Bitcoins.
If you had invested that $1 in Bitcoin, seven years ago, you would now be sitting on about $3,196,800, which means $1000 invested in Bitcoins in 2010 would now be worth nearly $3.2bn (at a price of $10,00 per Bitcoin as on 29th November).
Let’s compare how rich you would be now (31 Oct’17) if you invested $1,000 in the biggest companies ten years ago.
$1000 invested in 2007 in Netflix is now worth $51,966, Amazon is $12,398, Apple is $6,228, Starbucks is $4,687, Nike is $3,319, Alphabet (Google’s parent) is $2,922, McDonald’s is $2,793, and Microsoft is $2,260.
$1,000-worth Bitcoins in 2010 are now worth $3.2bn.
I’m not a financial analyst or advisor, but I can clearly see that there is a revolution taking place right before our eyes. Blockchain is a revolutionary technology that is here to stay. And it is getting ready to disrupt just about every industry you can name.
Blockbuster didn’t see Netflix coming.
Nokia didn’t see Apple coming.
Sears didn’t see Amazon coming.
The world doesn’t see blockchain coming. But it’s here, and it’s not going away.
Written by: Muhammad Abid Khan