BITCOIN PRICE AND THE GLOBAL FINANCIAL CRISIS : EVERYBODY'S LOOKING AT THE WRONG MARKETS
Bitcoin, or BTC as it is commonly called, is currently one of the most talked about topics in the economic as well as the technological world. It was developed in 2008 by Satoshi Nakamoto, in a paper that took the whole world by storm, and shed light on one of the fastest developing sectors in the fintech world, cryptocurrency. As a part of the system, Satoshi also devised the world's first blockchain database.
Why is proper knowledge of Bitcoin important for an investor?
Since Bitcoin operates only through virtual platforms, it does not need a trust based system or a third party, other than sender and receiver. This automatically gives the users more control over their own money, and also does not levy restrictions such as minimal deposit amount or extra charges, which are some of the drawbacks of financial institutes like banks. It is also a highly secure, efficient and fast method of money transaction, since it only requires an Internet connection and a digital device. The anonymity and protection of identities in the system makes it a safer method of dealing with larger sums of money. Investors can add to their portfolio, since it is also one of the swiftest changing, and ever growing sectors, and will continue to develop more, both in the recent and long term future.
Bitcoin mining and where you might go wrong
In very basic terms, mining is a mix of verifying transactions made by previous Bitcoin users, and getting lucky, since you have to be the foremost identity to arrive at the correct answer. Bitcoin can also be bought, or earned by other means, but mining still remains one of the top ways to earn Bitcoin.
Suppose you already have some Bitcoins, but you do not have a proper knowledge of the current markets or do not know the proper worth of your currency. This might lead you to overestimating or underestimating the value, and subsequently, to you not getting the actual valuation.
In countries where Bitcoin is legalised, the government has regulated the worth and valuation of cryptocurrency. Even then, the market value fluctuates, and it is a risk to dabble in this without full research.
Just getting a basic gist of the transaction rates and current valuation graphs is not enough, since transaction rates vary from platform to platform, and the valuation is solely dependent upon supply and demand. The world Bitcoin valuation peaked some years back, and though predictions pointed at a larger boom, it never came, and people who stood to become multi-billionaires in their own rights were instead left mourning a huge loss. A duo in the U.S. who stood to make 2.34 billion dollars were instead left with 720 million, and a journalist in Australia lost his life savings when he refused to cash in his 7 million dollars, and was stranded when the market valuation went downhill, making him bankrupt.
Getting a proper idea and grasp of how Bitcoin works, the different platforms and which one you should prefer, when to cash out or hold on, and what real life goods you can buy with your cryptocurrencies in countries like Russia, Vietnam, South Korea, etc should be a complete guide for beginners looking to invest or explore Bitcoin.
How can this be resolved?
Having a fully globalised platform is one of the ways to go about levelling the playing field for everyone. It will eliminate the issues of differing transaction rates of various platforms as well as make it simpler for people from underprivileged backgrounds, since they only need to know about one platform. It will also reduce the exponential market fluctuations, since the supply and demand chain can be regulated much more simply. Governmental sanctions should be uplifted, and instead of being banned, resulting in people trying to illegally trade, regulations can be imposed, which will ultimately make the entire wealth system a fairer functionality. In the meantime, gaining a more in-depth knowledge of the details and workings of Bitcoin will allow users to get an upper hand for the future, when cryptocurrency is the mode of enterprise.