On October 31, 2008, an anonymous entity under the alias Satoshi Nakamoto published the white paper that sent shockwaves across the financia...
It was the dawn of Bitcoin revolution
The thing about Bitcoin that scares banks, lawyers, and the public notary is the global monetary decentralization. In other words, with cryptocurrencies, there is no more need for the classic middleman. Central banks and banks, in general, are losing their influence. We don’t need them anymore. The fee they are usually taking from every single transaction now goes to the people. To you and me.
How?
The
paradigm of Bitcoin and every other digital currency is simple: he who
confirms the transaction earns a fee.
So far, that was the role of the bank. Now,
that can be anyone willing to spare some computing power for blockchain
process. In simple terms, through the process known as the “mining,” you earn a
small compensation.
Should you start mining for Bitcoin, like
right now?
The problem with mining is that it demands some expensive equipment and the process itself burns a lot of electric energy. In other words, your electricity bill may easily exceed the value of the number of Bitcoins in your BTC wallet.
The problem with mining is that it demands some expensive equipment and the process itself burns a lot of electric energy. In other words, your electricity bill may easily exceed the value of the number of Bitcoins in your BTC wallet.
However, if you observe the process as an
investment, then the story changes. You burn money on mining now to cash in big
later. Still, it’s a gamble. Because the exchange value of the cryptocurrency
may or may not rise with time.
For example, the exchange rate for 1 BTC was
$10 in 2012. Today, it’s $5,716.
That’s a massive capital gain for those who
acquired 10 BTC’s five years ago. Their $500 investment turned into $50,000
with zero efforts.
To predict the trend of any currency, you
have to dive into some heavy analyses. And that requires certain knowledge, not
many possess.
But that doesn’t mean that you can’t buy computing equipment and run it on green power.
It may appear as a heavy investment at first, but once you solve the energy problem, your only job is to keep up with the mining difficulty demands.
...
In other words, you need to keep upgrading
your computing potentials. Because, as time goes on and more people join the
ride, the difficulty increases. Which demands certain upgrades.
What if you join the online Bitcoin mining pool?
The
problem with this option is avoiding potential Ponzi schemes. Crooks are joining the ride
trying to take advantage of the rising popularity of the cloud mining. With the
exception of Genesis Mining, the large number of others are paying the old
customers with the money of the new ones. And since the difficulty is
increasing, they are enticing users to reinvest just to keep up with the trend.
There’s no way of knowing for how long a
specific Ponzi may run. Because, as long as it’s alive, you can, in fact, make
money. However, sooner or later, the entire scheme will collapse.
So your job is to do a thorough
investigation of a specific service by using specialized forums and subreddits.
If it’s a Ponzi, the pros will know. Put your money in a clean business.
Always!
Again, this should be observed as a medium-
to long-term investment. You keep paying the monthly fee, seemingly losing the
money, to cash in later. It’s like acquiring a property. When you need some
fast capital, you put it on the market. On the other hand, if you are slick who
spotted the new rising star, and the mining pool has it on the list, you may be
on a fast lane up!
Either way, it does require some hard
analyses and thinking. Don’t rush in, that’s all I’m saying.
What are the other means for acquiring Bitcoin or some other cryptocurrency?
·
Take your credit card and buy it.
·
Or, make something and sell it for the Cryptocurrency.
With Coindesk taking a leading place in
analyses and exchange, there are numerous other “brokerage” services that
provide you with the option to buy Bitcoins and other cryptocurrencies with
traditional money.
Now, here’s the trick.
While you will be buying the two most
prominent Cryptocurrencies in small amounts (Bitcoin and Ether), you should
keep up with the news and developments to recognize the next big deal.
You see, everyone can develop the own Cryptocurrency. So far there are over 200 of them. Because the blockchain
technology is a transaction process that may not have to include monetary
transactions. It could be a simple contract between two parties. The digital
currency is here to pay the fiddler. In other words, to entice people to mine a
specific type of the data blocks.
For example. While Bitcoin is namely the
money-type digital currency, Ethereum is more focused on contracts. Ether,
their currency, is here to entice mining.
In this very moment, large corporations are
investing time and manpower to apply blockchain technology into their
operations. Bank of America is doing the same. Some countries, like India and
China, are working on their own digital currencies.
The future is clear. Cryptocurrencies, with
Bitcoin on the leading position, will take over. It’s not the question of if,
but when.
What makes this claim a sure thing?
What gives value to money? Or gold, for that
matter?
Faith. People’s faith. In other words, if
enough people believe that something has the value, it can, therefore, be in
use for the exchange.
You can’t eat money. You can’t cover your
ass with it during cold nights. Yet, you will kill for it. In fact, you can’t
survive without maintaining the large-enough number on your bank account. Add
the fact that just a quantum of all the money we have in the system is in a
paper form, and there you have it.
When you think about it, it was the banks
and governments that enabled the birth and rise of Cryptocurrencies. Their
tendency to control the money by moving it in a digital sphere created a
fertile ground for the next step in the evolution of the market system.
In reality, there is no real difference
between dollar and Bitcoin, other than a fact that Bitcoin comes in a maximum
allowed number of units. Both predominantly reside in a digital form and
people believe that both can buy something.
The only major difference is that Cryptocurrencies are rendering banks obsolete.
And not just the banks. Bitcoin, Ether,
Ripple, and any other Cryptocurrency will kill every traditional “middleman” in
a transaction process. Lawyers and the public notary offices will be removed
from the transaction confirmation process altogether. It’s gonna be the miner
who validates a transaction.
So stay tuned and on a constant lookout. And
don’t wait up. Get yourself a crypto wallet and start buying Bitcoins and other
promising Cryptocurrencies. You’re gonna need it in the near future.
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