Is cryptocurrency a good investment or a scam? I stayed out of the market because I thought it was at the top but just how wrong can you be
Two years back I could have bought Bitcoin for about $4000 and Etherium for just a few dollars but I didn’t because I did not understand what they represented. I will not make the same mistake again.
What is Cryptocurrency really?
This is the digital stock exchange where investment opportunities are promoted on a range of virtual products.
It all started with an infrastructure called BlockChain. This basically a foolproof system of transacting documents using a ledger system for each movement. The Ledgers ensure visibility of every transaction so that proof of work is maintained and unable to be altered at any time. It is also decentralized so no controlling body holds the power over documents.
This is a game-changing technology that will rock the world for decades to come.
Importantly the inventors of this are really unknown but go under the identity of Satoshi Nakomoto a made-up individual. However, whoever Satoshi is they own about 1.4 million bitcoin.
Turning an idea into money, Bitcoin.
Bitcoin way layered onto the Blockchain to become a limited supply store of money and a payment vehicle for transacting sales.
Bitcoin is unbreakable yet highly visible and due to limited supply with high demand indicates an increase in value well into the future.
Stock to flow models predicts over $280,000 in the short term and a very bold long-term price.
You can read a lot of rubbish proper gander about Bitcoin however it is really in its infancy and misunderstood by the masses.
However major institutions, banks, and even countries have adopted Bitcoin as a store of value.
It is now considered that it is too risky to not invest in Bitcoin.
Why is the bitcoin ride so bumpy
It is part of a trading market and therefore subject to the variables of investor actions to manipulate the growth to their advantage.
However, if it just went straight up it would be priced so high it would be out of the reach of everyone. Generally, it grows at more than 200% a year so a good return.
There is really not an actual coin, a misconception by many and it is just a notation of value in a ledger at a trading platform.
Furthermore, a Bitcoin is broken into a Million pieces called Satoshi’s so you are able to buy a very small part of a coin and still be rich.
As a virtual store of value Bitcoin can be compared to Gold or even Cash ( called FIAT). Gold has remained steady for a decade with no rise in price and fiat currencies being devalued by deflation on a daily basis.
Just another disruptive technology
During the last three decades ( and a bit more) the world has been changed by technologies that alter the way we go about our daily lives.
| Mobile phones | from the basic to a computer device |
| The Internet | Use expanding and faster speeds |
| Search engines and Maps | |
| A University stunt to worldwide adaption | |
| Amazon | A simple book store to a marketer online |
| BlockChain | A new way of transacting documents |
Each of the above has many subheadings but the point is that our life was changed by the adaption of technology.
Next, we have a whole bundle of Alt-coins
Everything else trading on the blockchain is an Altcoin (Alternate to Bitcoin).
These have a myriad of uses and the total of them is around thirteen thousand
Here comes the potential for scam products because there is very little legal control over the coins.
Your Top coins with well-known names are generally well backed and hold a position of power in the market.
- Etherium
- Solana
- Cardano
- Chain link
- Binance
Then a few coins that may well disappear one day;
- Dodge coin
- Shiba Inu
- Ripple
These are just examples from a whole bundle of applications
The ultimate disruptive technology
The way we process documents is changing
If you transfer funds to another country the process takes days and comes with considerable costs. This problem is very real in the poorer areas where workers in First world employment remit money so the family can live. The process is awkward at best and predatory at worst.
Using Bitcoin takes just seconds and at a minuscule price compared to the above.
That is why Pay pal and Visa have adopted to use Bitcoin
It is not just money it is any type of document transaction. Legal, Real estate, insurance, health industry, etc
Companies have been established on Bitcoin finance.
How secure is Bitcoin or is it a haven for Drug Money
One of the features of Blockchain is that every transaction is recorded and can not be destroyed. Therefore a trail can always be found. This is a feature discovered by many trying to launder money
Bitcoin is not the bogy however some of the coin holders may be considered on the shady side.
Nothing is 100% secure, there are always risks
Absolute calamities can disrupt anything. The financial market has crashed many times, the real estate market bought to its knees and world trade was disrupted by a simple Flue type epidemic called Covid.
World wars, bombs, and poverty create change so one can never see the future.
Being scared of the BitCoin generation.
Are we at the top yet or just starting
Whilst the total coin market is valued at just over three trillion us$ it really is in its infancy. The stored Gold market as an example is over nine Trillion and no further represents a good investment activity.
Bitcoin holders number just a couple of million people so they are really the early adopters or the ones with the biggest financial gains.
Tesla, Amazon Google, etc are all now trillion-dollar companies, figures unheard of in years past.
In fact, Tesla has a holding in Bitcoin of about us$1.4 billion resting on their balance sheet as a current asset.
The bitcoin value has only just begun an upward journey to the top and is a long way forward from where we are now.
Is cryptocurrency a good investment or a scam?
Conclusion
Nothing in this is investment advice and I would always seek independent financial advice before investing in any asset. However, seek your advisers wisely because there is so much FUD in the investment circle.
Disclaimer; I hold a small percentage of a bitcoin and investment in several alt-coins as well. I also have traditional shares in my portfolio.
Yes, it is a rocky road and that is just part of the beast, tame it and you can win.