The year 2009 is when Bitcoin was created by an unknown fellow going by Satoshi Nakamoto. Though it wasn’t paid much attention for several years, this digital currency would come to be known the world over barely five years after it was ignored. In the beginning, most people thought it would fizzle out and die, but it only rose in value. When a single bitcoin hit the $10,000 mark in 2018, most people realized they could no longer just wish this digital currency away. There have been mixed reactions to its volatility, but by now half the world has heard about cryptocurrency.
Here are some things every entrepreneur needs to know about this digital currency.
Decentralization Brings Freedom
Since crypto is based on a digital ledger that the public has access to, it is not regulated by any central authority. One of the things this does is cut out the middleman, a reason banks believe its acceptance will disrupt the industry in the most significant way. Since the money is stored in electronic wallets and can be transferred through email, the cost per transaction is removed. International payments are not vetted when users go through this exchange, and governments are not involved in its production since it is a mined currency. All these things put together work perfectly for the consumer but poorly for banks and governments that completely lose control.
It’s Still Volatile
Cryptocurrency cannot store value yet because it is a speculative investment. What we know about its value so far is that one day it could be over $10,000 and then $2,000 the next. Its value is affected at the slightest provocation as it could be felled by unknown factors. Even shares of a company are now that volatile. What we know about Bitcoin is that you would not want to have all your sales as a business in this currency since it could all be gone someday. There are not enough bitcoin essays and cryptocurrency essays to research because it is still relatively new and under observation.
The fact that it is unregulated also leads to its value being on a free fall. Of course, the lack of regulation is the most attractive thing about cryptocurrency. As long as it remains this way, crypto might never really stabilize in value, though some people believe Bitcoin could once all of it is mined.
Legitimacy Could be Causing the Rise in Value
Over the last few years, and especially in 2018, the value of bitcoin rose so much yet most people could not understand how that was happening. It has become a little clearer now that its acceptance in countries and stores generally respected by people and users could have boosted its value. Japan accepted it as one of the legal payment methods accepted in the country, and we have seen that other cryptocurrencies receive a boost from the acceptance of this founding crypto. When major stores in the US accepted crypto for transactions, they seemed to legitimize it, which led to the price increase.
The other reason the value seems to go up is the creation of smaller cryptos that are valued less than Bitcoin. When they are put on the blockchain, buyers get in with the hope that these new currencies can someday reach the highs of Bitcoin.
Exercise Caution – Nothing Is Foolproof
First, we have mentioned the currency’s volatility that makes it quite difficult to predict. When transacting with it as a business, you should be prepared to lose it all in hours or days. Second, for some time now, and especially since Silkroad became a deal, crypto is associated with the dark web and unclean deals. When a business accepts it as a means of payment, there is an association with the deals that may be damaging to the business.
Most Billionaires Find it Elusive
Warren Buffet has not been addressing the issue of digital currency enough, but the one time he mentioned it he asked people to stay away from it. He said he did not believe bitcoin had any intrinsic value. As you can imagine, his words caused an uproar in the crypto world as its value dipped – slightly proving Buffet’s point. It didn’t stay down for long.
Jamie Dimon of JP Morgan Chase had similar thoughts. In fact, he said the government would crack down on it at some point since there was no way someone could just create a currency out of thin air. Mark Cuban, yet another billionaire doesn’t share the sentiments of these two. Though he said he believed Bitcoin was overvalued, he is known to have a huge investment in the crypto world. As for Richard Branson, he doesn’t have harsh things to say about it. Other extremely wealthy people haven’t been quoted saying too much about the currency, so their sentiments are unknown.
The End is Nigh… or Not
The founder of Bitcoin set things so that only 21 million of these can be mined. Once that is done, the world will have to do with what’s already here. No computing power will yield more bitcoins. That having been said, there were already 18 million bitcoins in 2020, leaving barely 3 million to be mined. It is said that it will take over 100 years to mine the rest, so maybe the value per coin is going to stabilize at some point in the next decade.
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