Bitcoin is the first crypto currency and nothing short of a financial revolution.
- It is global, like the Internet,
- it’s an alternative store of value, and
- it’s a highly reliable ledger.
What makes Bitcoin tick?
In Bitcoin there are people who buy specialised machines called “Miners” or “ASICs” Application Specific Integrated Circuits. “Miners” can refer both to the machines or to the people who run the machines.
The machines do many computations and spend a considerable amount of electricity which makes attacks very expensive.
The price of Bitcoin relative to traditional money is volatile and compared with other crypto currencies can be even more volatile. Alternative crypto currencies may represent an opportunity for Bitcoin holders to increase their bitcoins or for the general populace to increase their wealth by investing in technically sound crypto currency projects.
Benefits of having some Bitcoin
Aside from the speculative upside, having some Bitcoin has some benefits:
- It can be stored on your phone or computer
- It can be used in any country that has Internet
- It can give you financial privacy
- It can give you access to investment opportunities
- If you make a mistake like forgetting your password or backup phrase, there are no second chances – your money may be gone forever
- There are limited places you can spend them
- There are usually tax implications with your transactions and accounting for these can be time consuming and expensive
Investing bitcoins – risky but rewarding
However there are other crypto currencies that do things differently to Bitcoin. Maybe one of them will usurp Bitcoin and make a lot of people fabulously wealthy. There are a lot of crypto currencies competing with Bitcoin, the main contender being Ethereum. However, Ethereum still uses the same security model as Bitcoin (Miners) and is soon going to transition to a stake-holder reward model (Ethereum 2.0).
Tezos (trading symbol: XTZ) is a crypto currency that already has a stake-holder reward model running successfully since February 2017.
Bitcoin has a limited supply of 21 million coins, although the amount in circulation is currently a little over 18 million as of this writing in November 2019. Critics of Bitcoin believe that the total amount of Bitcoin will not be enough to sustain a global population while proponents of Bitcoin believe that the existing supply can just be infinitely divided if necessary and that the transaction fees will be enough incentive to keep the miners running.