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What Are Bitcoins? BWR’s Beginner Cryptocurrency Guide

The U.S banking system may as well be stuck in the 1990s. Trying to wire any major sums between banks will take days to clear, even in an age where digital bank accounts are common.

Setting money aside in your average savings account almost seems pointless when the average interest rate of these accounts is less than 1%, according to the Federal Deposit Insurance Corp.

Central bank’s major enemy on the horizon seems to be the blockchain-assisted cryptocurrency, Bitcoin ($BTC). Bitcoin has been likened to “programmable, synthetic gold that has a stored value”.

The U.S. Dollar has been on the decline since before 1913, and history has already shown how printing more dollars doesn’t make the dollar any more valuable. Unlike cryptocurrency, gold is a commodity of sorts instead of a currency that can be instantly traded with a set value.

Let’s be for real with each other for a minute. Diversifying your financial portfolio is great for building equity in your life, but holding your money in traditional bank accounts alone is thinking backwards. Volatile as it may be, the appreaciating power of Bitcoin is in a league of its own .Per CoinMarketCap.com, all crypto-related assets boasted a combined market value greater than $350B by September of 2020.

Bitcoin’s market bubble continues to grow and the intrinsic value in the cryptocurrency is being noticed by financial institutions, hedge fund managers, and even the likes of rappers like Meek Mill.

History Of The First Successful Cryptocurrency

  • 03 January 2009, the first bitcoin was minted, and the bitcoin network was launched

Bitcoin was created by the mysterious, unearthed programmer “Satoshi Nakamoto”, whose name can be translated in Japanese as “Born from the ashes of centralization”.

In his theory, bitcoin was intended to be a way for people to trade items digitally without a bank breaking in between business. Cryptocurrency is managed through the blockchain network; blockchain databases’ main function is to provide an online ledger of all crypto transactions to provide complete security to owners of $BTC.

The reason your bank transfers sit in an uncomfortable 2-3 day pending cycle is due to banks verifying that a real person is behind the transactions. The blockchain network allows two strangers to trade bitcoins and altcoins (other cryptocurrencies besides $BTC) without a middleman.

Why Is The Price Of Bitcoin Rising?

Bitcoin recently surged to a new peak high of $42,000 and shook the foundations of the finance world. There’s a good chance if you scroll social media long enough you’ll read a post talking about Bitcoin.

And that shouldn’t be a surprise to you.

The value public institutions see in Bitcoin is far from a joke. MicroStrategy ($MSTR) announced in their 10q business filing that they are holding BTC as part of their treasury program. The U.S Federal Reserve and the People’s Bank of China are discussing how to develop blockchain-enabled currencies for their countries respectively.

In the last five years, Bitcoin has proven itself as a money appreciating asset that can’t be tracked by the government and has the added benefit of being tax free, at least until you cash out. And while bitcoin became the first (and largest) crypto asset, the value inherent in bitcoin is mirrored by other cryptocurrencies which would suggest an increase in others for the future.

MAJOR NAMES INVOLVED WITH BITCOIN:

FIDELITY INVESTMENTS

CME GROUP

FACEBOOK

PAYPAL

VISA

SQUARE

STANFORD UNIVERSITY

HARVARD UNIVERSITY

Is Bitcoin A Buy, Hold, Or Sell?

This is a tricky one.

Bitcoin is a scarcity asset, meaning the less there is of it the more valuable it becomes. There are a limited 21 million Bitcoins possible to be unlocked through a process called “bitcoin mining”.

Bitcoin mining is the process of setting up a CPU to solve a complicated code to distribute one Bitcoin. Bitcoin mining isn’t the most lucrative business if you’re solo, as the cost of electricity needed to create one bitcoin would put a hole in your back pocket.

Scott Minerd, the chief investment officer at Guggenheim Investments, said on Bloomberg TV , “Bitcoin’s scarcity combined with ‘rampant money printing’ by the Federal Reserve means [$BTC] should eventually climb to about $400,000”

This piece is not about promoting the ultimate strategy to day trading Bitcoin on Robinhood. The intent is to educate people who may not have understood exactly what cryptocurrencies like $BTC are, and what they mean toward a decentralized, accessible currency.

Ultimately, your decision with your coins comes down to what your investing strategy is: Swing trading, day trading, growth investing,etc.  

Ways You Can Buy Crypto

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