Just like how the internet became a rage across the world, bitcoin, too, is being embraced by people globally. An increased number of traders and investors have now started using bitcoin as the primary form of currency. According to many financial experts, bitcoin is well on becoming a real currency in the future.
The crypto recorded a meteoric rise in its value in February 2021. Bitcoin, the world's most popular and the first digital currency, rose higher than $58,000 in February. The cryptocurrency's exponential rise has earned it the attention of many new and aspiring investors.
In this article, learn more about bitcoin investment and find out why you should invest in Bitcoin.
Bitcoin, which came into existence in 2009, is the world's first digital and decentralized currency. It eliminates the requirement of traditional intermediaries such as governments and banks to conduct financial transactions. Unlike fiat money, for instance, USD, EUR, YEN, etc., which are regulated and backed by their respective governments, bitcoin is powered by software-based cryptography and P2P technology. Thus, it is based on code and not silver or gold, or any central authority and trust.
So, how does the crypto work?
Well, it is simple! Every bitcoin (BTC) serves as a computerized file and stored in the digital crypto wallet on a smartphone or computer. Bitcoin is backed by blockchain (an open-source code) that helps create a shared and publicly accessible ledger. Every transaction functions as a block and is chained to this code, resulting in a record featuring permanent transactions.
When it comes to learning how bitcoin functions, one must understand the concept of public and private keys too. In essence, a bitcoin digital wallet consists of a personal and a public key that works in tandem to permit the wallet owner to initiate and digitally sign all the transactions, providing PoA.
Now that you have understood how bitcoins work, you must comprehend the concept of a digital wallet.
In essence, a bitcoin digital wallet is based on a software program that stores bitcoins.
Technically, a bitcoin isn't stored anywhere. The wallet user gets a private key or a secret number that corresponds to the BTC address of the digital wallet. The primary use of a bitcoin wallet is to send and receive bitcoins and provide the ownership of the BTC balance to its user. There are mainly four distinct types of bitcoin wallets, including mobile, desktop, hardware, and web.
The desktop wallet is installed in the desktop computer, as well as provides a user with complete control over his/her wallet. The desktop wallet serves as the address for a user to send as well as receive BTC. They also let a user store the private key.
The mobile wallet offers functions similar to that of the desktop wallet. The mobile wallet facilitates payments in any physical store through touch and pay and NFC or near-field communication, scanning the QR code. In essence, bitcoin wallets are either Android or iOS compatible.
A web wallet provides access to BTC from anywhere, any browser, and on a mobile device. Traders must pick their web wallets carefully as it stores their private key online.
The hardware wallet is supposed to be the safest bitcoin wallet since they store BTC's on physical equipment, usually plugged into the computer through the USB port. However, they aren't available for free, and their cost ranges anywhere between $100-$200.
When it comes to trading and investing in bitcoins, you must pick a highly secure and easy-to-use wallet. Also, keep the BTC wallet safe as hackers are always on the lookout for ways to break into your digital wallets.
Typically, encrypt your wallet using a difficult-to-access password. Also, you must choose the cold storage option, which means you must store your bitcoins offline. You should again back up the mobile and desktop wallets frequently as any issues with the software wallet on your personal computer or mobile phone can result in wiped away holdings.
Why Should You Invest in Bitcoin?
So, now that you've discovered much about bitcoin investment, bitcoin wallet, and how the crypto works, you will want to find out the top reasons for investing in digital currency. As already stated above, bitcoin has witnessed a massive rise in its value since its launch in 2009. However, there are numerous other benefits of investing in bitcoin. For instance, when you invest in bitcoin, you get the advantage of lower transaction fees, hassle-free international payments, secure payments, no 3rd parties, fast transactions, etc.
Below, check out the top reasons for investing in bitcoins:
No company or government owns bitcoins. However, only after a government has approved the digital currency can one use bitcoins anywhere. In many countries, such as the UK, USA, Morocco, South Africa, Mexico, etc., bitcoins have received government approval. More and more merchants have now started accepting BTC as payment.
Although many digital currencies have been entered the market in the past decade, bitcoin has continued to dominate the world of cryptocurrencies. It is trusted by people globally and thus forms the backbone or the support system of all digital currencies. Today, bitcoins are accessed and used for buying goods & services online. This indicates that BTC's authority is increasing with every passing day.
Price Will Continue to Rise:
The advantages of BTC are attracting an increased number of people to invest in cryptocurrencies, like bitcoins. This increased demand for BTC is causing the price of the cryptocurrency to go up. This makes it quite evident that bitcoin's price will continue to rise even in the future. Since bitcoins eliminate the requirement of any physical barriers which can slow down the transaction, it is only wise that one invests in bitcoins, as its price will continue to go up, resulting in increased returns for investors.
Easy to Invest:
Unlike any other investment that can be difficult and time-consuming, bitcoin investment is quick and easy to comprehend. One does not require any unique skill to become a BTC investor. If you are new to the world of cryptocurrencies, you can invest in bitcoin by selecting a trusted and reputed platform. Several crypto trading platforms offer simple and easy-to-follow crypto investment procedures, thereby helping traders/investors to grow their investments.
No 3rd Parties as well as Easy Payments:
Still wondering why you should invest in bitcoin? Well, then you will be glad to know that there are no 3rd parties involved in bitcoin transactions. There are only one sender and one receiver involved in BTC transactions. This implies that your transactional data is always safe. Also, it is difficult to remove or alter transaction records. BTC payments are secure and easy, and it is just the user who can access his/her bitcoins.
Secure, Private Transactions:
Once you have bought and owned bitcoins, you have the power to transfer them anywhere, anytime, thereby minimizing the time as well as the potential expenses of the transactions. No bitcoin transaction consists of personal information, such as credit card details or a name. This means that your personal information is never stolen or hacked for fraudulent purposes or even identity theft.
To sum up, there is no denying that bitcoin has fast gained the attention of traders/investors across the world. Globally, bitcoin's adoption is accelerating. According to the company's data, bitcoin wallet adoption has increased from 45 million to more than 67 million in the past year. Given the scenario, even PayPal is looking to initiate BTC transactions on the Venmo digital wallet soon. Starting anytime in the first quarter of 2021, PayPal's over 26 million merchants shall be accepting cryptocurrency as a form of payment.
While fiat money brings along with it many issues such as taxes and other worries, bitcoin's rise will only alleviate these problems in the long-run. Bitcoin brings along with it many solutions that people require. Additionally, it has immense potential for growth in the future. Many investors who are buying and holding the digital currency believe that it will gain more trust and following, resulting in increased growth in bitcoin's value once the crypto matures.
Today, companies and individuals are aware of BTC's value proposition and know where the crypto is positioned in the macro-environment. Also, given that only 21 million bitcoins will ever be created, it leads to a unique type of digital scarcity. This implies that with the rise in demand for bitcoins, there won't be any way to increase bitcoin's supply. It can only come via existing bitcoin holders who agree to sell the cryptocurrency. This and the reasons listed above are enough to understand why you should invest in bitcoin.
Bitcoin has managed to surpass its previously recorded all-time highs, despite crashing. The coin has witnessed several peaks as well as troughs in the past decade. But it has always managed to bounce back. If you are wondering whether you should invest in bitcoins or not, the answer is that there is no point in staying on the sidelines. If you want to earn substantial profits, then you should invest in digital currency.