Want to buy Bitcoin? Understand these 4 points first

Summary: If you want to truly benefit from Bitcoin, understanding Bitcoin is key

With the arrival of Bitcoin's strong bull market in 2020, I see more and more people wanting to enter the world of Bitcoin. Their main goal is usually to make huge profits with Bitcoin.

At first glance, many people consider Bitcoin to be a new investment tool with higher profit potential than traditional stock and financial markets.

Those with this view miss the point about Bitcoin. Bitcoin is a real revolution that goes far beyond mere investment. Before you buy your first bitcoin, I think you must understand 4 basic elements about bitcoin.

What is a blockchain?

With the happy ending of Bitcoin in 2017, everyone has heard of Bitcoin and the blockchain at least once. In fact, blockchain is a revolutionary technology on which Bitcoin works.

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Before you buy Bitcoin, you need to understand what Bitcoin is, and this includes understanding blockchain technology.

Blockchain is a technology that does not require any control body to store and transmit information.

From a technical point of view, the blockchain is a distributed database in which the information transmitted by users is verified and grouped into blocks at certain intervals.

These blocks are connected and protected through the use of cryptography to form a block chain: the well-known blockchain.

Therefore, the latter can be regarded as a distributed security record of all transactions since the beginning of the distributed system.

For many, blockchain is the greatest revolution since the advent of the Internet. It must be pointed out that this technology makes it possible for the Internet to never do.

Although the Internet allows information to be exchanged in a decentralized manner, we cannot do this without acting as a trusted third-party platform, such as when we want to send money over the Internet.

Blockchain solves an important problem, that is, there is no need for intermediaries when making online payments.

Let's take an example of a sale where two people pay via the Internet.

Currently, one solution is to use a platform like PayPal, which will act as a trusted third party to prove to the seller that the buyer has paid. By the way, the platform, as a trusted third party, will charge a commission.

While the blockchain will authenticate the entire process based on the contribution of the network computer, the network computer will check if the two people are reliable to verify their transaction.

It is worth mentioning that Bitcoin is the successful implementation of the first cryptocurrency based on blockchain technology.

What are the shortcomings of the current monetary and financial system?

 

The economic crisis has multiplied in recent decades. These recent economic crises have been caused by the abuse of the system by a small number of people with excessive power.

The global financial crisis from 2007 to 2008 alone explains the shortcomings of the current currency and financial system.

The private bankers who caused the crisis did not even have to pay for the crisis they caused.

Countries, and therefore peoples, are paying for this crisis.

The impact of this crisis will be felt throughout 2010.

The authorities did not take actual action to clean up the current monetary and financial system, but chose to solve this problem by increasing the money supply in circulation.

To help you understand the problem that this continuous and ill-conceived injection of liquidity into the system represents, let me give you a remarkable example:

"Imagine an alcoholic going to the doctor for help. In the face of the patient's problem, the doctor advises him to continue drinking more alcohol."

The people who control the global economy use the same tools that deal with economic problems as the tools that make the current system wrong.

The result is catastrophic, because the same reason logically produces the same result.

The continued growth of the money supply has exacerbated inflation in the US dollar and most of the world's fiat currencies.

According to the US Bureau of Labor Statistics, current prices are 212% higher than the 1980 average. As a result, the dollar has risen by an average of 2.96% per year over the past 40 years.

The real value of the US dollar has been steadily declining since 1980.

Therefore, an American must have $ 312 to make his purchasing power in 2019 equal to the $ 100 purchasing power of 1980.

Some governments, central bankers, and economists have made arbitrary decisions to devalue your assets.

While people in Western countries only feel the slight effects of this hyperinflation, those in the poorest countries ruled by authoritarian regimes suffer a great deal.

The current monetary and financial system is clearly flawed, as it will only exacerbate inequality between the global rich and the poor.

Obviously, this system no longer protects the people, so another way must be found to return power to the people.

How does Bitcoin solve the currency problem?

 

Bitcoin is a p2p payment system designed by Satoshi Nakamoto at the end of 2018. Bitcoin should be seen as the answer to the problems of the current currency and financial system.

Bitcoin has no leader and belongs to everyone.

Satoshi Nakamoto decided to make Bitcoin available to all inhabitants of the planet.

By keeping anonymous, he made Bitcoin overwhelming because no one could sue him to stop Bitcoin's development.

You can choose to be a complete node of the Bitcoin network at any time. This does not require any specific permission.

Decisions regarding the development of Bitcoin are made by consensus among its users. Therefore, Bitcoin is completely democratic.

Bitcoin has a limited amount of existence to cope with the increasing supply of fiat money.

Only 21 million bitcoins can be circulated.

This bitcoin scarcity is combined with the slowdown in new bitcoin production.

For every 210,000 blocks mined, the number of Bitcoins generated after transaction block verification will be halved.

This automatic event is called halving and is written into the source code of the Bitcoin blockchain. It aims to mimic Bitcoin's commodity-like behavior.

Bitcoin is actually considered by many to be digital gold.

This basic property of Bitcoin guarantees that one Bitcoin in 2020 will always be equal to one Bitcoin in 2100.

Therefore, Bitcoin is the best solution to protect what you have in the long run.

On the other hand, Bitcoin protects you from censorship.

The pseudonymous nature of Bitcoin also gives you better protection from the massive surveillance that many countries want to implement in the future.

In short, you should keep in mind that Bitcoin addresses the problems of today's monetary and financial system by providing an alternative focused on scarcity and democracy, which is designed to protect your freedom as a citizen while also protecting wealth.

 

Difference between investing in Bitcoin and speculative Bitcoin

 

If you have read this article, you will understand, at least I hope you understand that Bitcoin is more than a financial investment tool.

Bitcoin is a multifaceted revolution: technology, industry, society, and ideology.

Therefore, you need to understand that Bitcoin will not die out.

Some people buy Bitcoin just for short-term purposes. Their goal is to profit from day trading.

This very risky strategy is clearly reserved for a very small number of speculators.

Bitcoin's least risky and successful strategy is to buy Bitcoin on a regular basis and then hold it.

You will benefit from a gradual increase in prices and you will smooth your costs.

This strategy is called the "Dollar Cost Averaging Method" (DCA) and has been adopted by many in the traditional financial sector.

Buying Bitcoin and holding it for a long time, I think it is a real investment in Bitcoin.

Holding Bitcoin for a long time shows your confidence in the Bitcoin revolution and helps support it by making Bitcoin more scarce than Bitcoin by design.

If you want a strong reason to persuade you to really invest in a long-term investment in Bitcoin, keep this in mind:

Bitcoin has been the most successful asset in the first decade after its introduction.

Bitcoin turned a $ 1 investment into $ 90,000 at the end of 2019 in early 2010.

And those who have adopted a "buy and hold" strategy for bitcoin do get a huge return.

 

in conclusion

Before you get in touch with Bitcoin, you need to make sure you understand the blockchain, which is Bitcoin's core revolutionary technology.

Next, I ask you to ask yourself the current monetary and financial system. You will quickly conclude that the current system is flawed, and even worse, it cannot be repaired.

Another solution must be found, and this is where Bitcoin comes in.

The devastation caused by Bitcoin may completely change the current paradigm and bring a fairer world for all in the future. This fairer world will make people the center of the game again.

Therefore, Bitcoin wants to build a successful system in the future, which requires long-term investment by users, not just speculation on its price.

You must make the right choice for Bitcoin with a good understanding of the facts.

 

Author: Sylvain Saurel

 

Compilation: Share Finance Neo

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