Bitcoin has been in the news since 2009. However, no one imagined that bitcoin would surge so quickly. In fact, as per the market on 17th June 2019, Bitcoin has crossed the USD$9000 mark. This is great news since there was a slump to as low as $6000. Analysts are now estimating it to cross further and break the USD$13000 mark. But there are so many questions in the mind of a new investor, and we are going to address those in this article.
Will Bitcoin Sustain this High Level? Is it Safe to Invest?
To answer these questions, your first need to understand a bit of history with respect to currencies. About 6000 years ago, The Barter system was very successful among people, but soon they felt the need to have a common denomination to exchange goods and services since there were inequalities. Sometime around 3000 years ago, gold and silver were perfect common denominations to do transactions. When the Governments were in place, they started issuing “promissory notes” which people could exchange with real gold. This was the birth of money. Post that, there have been many revolutionary changes in the economy, but the most significant was the discovery of the internet.
Nobel Prize-winning economist Sir Milton Friedman had stated in an interview in 1999, that there would be a need of reliable e-cash, a method of transferring money from A to B, in an encrypted form. This is the fundamental theory behind Bitcoin.
The adoption rate of any new payment methods has been historically slow. It is similar to the time when we were issuing checks and paying in cash, and VISA cards were introduced as alternative modes of payment. The then population found it harder to adopt a cashless economy since the majority of transactions were done through cash. But today, as we can see that almost every country in the world has adopted cards as their major payment method. Similarly, the adoption of Bitcoin too will take time.
The most important thing would be recognition from the government and more knowledge with respect to trading with Bitcoin. Firms like BitcoinProfit, are assisting new investors to invest in Bitcoins, and simultaneously get rid of the fear of unknown investments. They do this by investing in Bitcoins themselves and keeping the investor informed about the risks involved by providing expert guidance through experienced investors.
Bitcoin started its journey as a digital currency but is now slowly shifting to become a payment system, like PayPal. The only difference being that PayPal uses Dollar as its currency, whereas Bitcoin itself is a currency, with an exception being that it just cannot be created in thin air, and not without anyone else knowing about it as it relies solely on the block-chain technology. The problem with other digital currencies is that government authorities like a Central Bank can create them, but Bitcoins rely on cryptography and mathematics. Moreover, the block-chain technology decentralizes the bitcoin ledger of accounts and hence they become safe to transact.