10 excellent incentives to own the cryptocurrency.
Bitcoin, the most talked about cyber currency of our time, was the first of its sort to pave the way to what has now become to be an entirely new but completely self-sufficient financial market. The invention of the blockchain technology enabled a whole new range of possibilities for financial transactions around the world that were faster, more accessible, and mostly anonymous. All this made it so appealing for many users in the cyber community. However, seven years later, after the official release of the bitcoin code, the cryptocurrency has reached new highs with more and more people getting interested in bitcoins.
Even though almost everyone has heard or come across the bitcoin concept, how many actually understand the reasoning behind cryptocurrency and its growing popularity over the past few years? The answer is – not many.
So here’s ten simple-to-understand reasons why people should consider becoming proud bitcoin owners!
The bitcoin market has been extremely volatile since the creation of the cryptocurrency, where changes of a few percent up and down on a daily basis did not signify any particular market turbulence. However, over the past year or so, the digital currency has been relatively stable. This, in turn, guided by the financial market rules, increased investors’ incentives to put money in the currency quite drastically. Historically, relatively stable trend followed after a significant increase in bitcoin price. Therefore, deriving from the previously observed patterns, it is reasonable to assume that the new increase in price that happened in the second week of June is now most likely contributing towards a greater stability of the currency. Considering the above, it could be said that all this makes it a rather appealing investment. Especially in the times of great economic uncertainty that has been prevailing in the recent period, when even investments in safe havens such as gold and currency have seen a significant decline.
- Global economy
This brings us to our second point- global economy. To be fair, world economy has seen better days than in the past few weeks or even the last few months. It looks like the slowdown in economic expansion as well as the surprise, caused by an unexpected Brexit referendum outcome, have impacted our geopolitical and economic environment to a great extent. However, the direct correlation between bitcoin and financial markets is not easily found. In fact, the only link that is visibly observed is that when the economy is not doing so great, the bitcoin value seems to increase. Therefore, a negative correlation between the two can be assumed in some cases, especially when stock and currency markets are experiencing a certain amount of turmoil.
As mentioned above, bitcoin is often compared to gold because of their similarity in attributes. Just like the yellow metal, bitcoin doesn’t derive from anything, which means it can be created from nothing. And it’s also scarce since its quantity is limited, as written down in the original bitcoin protocol, known as the Bitcoin Whitepaper.
It is also important to note that another trend has been observed when it comes to bitcoin demand. According to various reports and conducted researches, it seems that cryptocurrency is increasingly popular in countries with relatively weak national currency. China, India, South Africa and a number of countries in Latin America have been reportedly exchanging their paper money for bitcoins.
- July 9 halving
According to the previously mentioned Whitepaper, the inventor of bitcoin, controversial and still unknown “Satoshi Nakamoto” made sure that the halving event, which controls the creation rate of new bitcoins, takes place every four years. During the halving the number of new bitcoins cuts down to half, so from 3,600 bitcoins it will come down to 1,800. The reduction of new coins released causes the effect of a classic supply and demand so well-known in simple economics. If the supply shortens and the demand stays the same, the price of goods will increase. Since the bitcoin currency is unlike any other national currency, especially since it has a maximum limit of 21 million bitcoins, the value of the currency is likely increasing due to an upcoming halving. The current amount of digital currency in the market is 15,5 million.
- Cash-free trend
The overall transition towards cash-free payments has been actively adopted in most developed countries. Therefore, an increasing tendency to switch to wireless payments has seemingly contributed towards a rise of buying tendencies for bitcoin. The main reason why people opt to trade in bitcoin rather in wireless cash is that digital currency provides the level of privacy that is unattainable with regular cash-free payments.
- The price patterns
If somebody decides to carefully study the price graph of bitcoin values over, let’s say, past 5 years, a pattern of price movements can easily be spotted. The repeating trend doesn’t guarantee the same situation will occur in the future, but it sure does indicate the possibility of similar outcomes.
- Increasing popularity
The rates with which people chose to trade in bitcoin grow every single day. From Latin America to Finland users opt to conduct transaction through bitcoin network to purchase goods and services online. The reason for this is the fact that bitcoin provides a much sounder blockchain technology system than other frameworks functioning on the same basis. The numbers of an increasing daily bitcoin usage speak for themselves…
- New usage purposes
And there comes another point. Just like with everything, human curiosity finds new ways to utilize numerous possibilities to exploit the given goods or services in multiple ways. The popularity of digital currency and an ever-growing number of customers created a number of cyber platforms and markets that allow bitcoin users to open their own internet shop that trades in coins, such as OpenBazaar. Further, API marketplace enables an automated payment between computers. Another invention is known as Opendime, which is the first physical object in a form of a USB that allows users to contain bitcoins on it.
- Bitcoin smarter than Ethereum
Apart from being the first and the most secure blockchain, bitcoin currently has its limitations. Since the invention of bitcoin technology, main IT megaminds have worked hard to come up with other blockchains to rival the original bitcoin currency. This is how ethereum came into existance. The ethereum model is based on smart contracts that attempt to conduct more than just monetary payments. While the most of the world is focused on the game-changing ethereum contracts, bitcoin is quietly inventing ways to beat even the smartest of the smart contracts. The new sidechain project is called Rootstock and it is anticipated to become huge. Thus, it might be wise to get your hands on a few bitcoins before Rootstock is released to the world.
- Program solutions in existence
Just like any other program, Bitcoin is not perfect. The technical limitations include the bitcoin technology’s inability to process more than a couple of transactions at once. Obviously, the problem grows even bigger as the number of bitcoin users increases every day. But not to worry, it seems that bitcoin masterminds have counted this in as well! Segregated Witness, the new bitcoin update is supposed to increase the processing capacity of bitcoin technology by 80%. Meanwhile, tech experts remain hard at work to come up with even greater and more permanent solutions to an existing problem.
- Positive market sentiment
To wrap it all up, it is very important to discuss the so-called market sentiment of the bitcoin cryptocurrency. The market sentiment cycle represents a cycle of events and digital currency prices that could be recorded back from 2010 when bitcoin began its official trade. Just like with any other cycle, market watchers tend to make decision to invest when cycle is either rising from the bottom or is currently at the bottom. Good news for bitcoin enthusiasts is that it seems that after a long period (about a year) of price stability, the cryptocurrency has reached the levels of over $500. Positive media endorsement and continuous upward trend is contributing towards an even greater incentive for the values to rise further.
This might not be all, but it’s definitely enough to get people thinking about bitcoins. Changes are never easy, but in order to stay relevant, it might be time to look around and understand that the world is changing, and it’s changing fast. So why wait and stay obsolete? The more you know, the better you are informed. The better you are informed, the smarter you act. Now everything else is up to you. But simply ignoring the existence and presence of bitcoin becomes harder and harder every day.