Bitcoin is the New Gold
What is Bitcoin?
I am going to try to explain to you what Bitcoin is, but don’t worry if you don’t get it right away. Few people do. Bitcoin and the Bitcoin blockchain introduces a whole new way of thinking, and it can take awhile to wrap your head around it.
So, the big question. What is Bitcoin?
Bitcoin is digital money that is called a cryptocurrency. There are many types of cryptocurrency, just as there are many kinds of metals. The top two metals are gold and silver. The top two cryptocurrencies are Bitcoin and Ethereum. So think of Bitcoin as a digital gold because that exactly what it is.
You can’t make rings or necklaces out of bitcoin, because it is digital, not physical. However in several other important ways, Bitcoin function very much like gold. It is actually frequently referred to as digital gold.
Bitcoin is the new gold!!
And when attempting to determine if it will hold a significant value, or be widely used in the future, remember who the generation that is that is now entering their adult purchasing and investing years. Like digital flowers would not make sense to grandma, a young girl receiving digital flowers from her boyfriend the sentiment makes sense. The boy gave her flowers.
So too this entire generation, who grew up immersed in a digital world, will perceive more value in digital gold than the physical commodity.
So let’s look at the following ways that Bitcoin is like Gold.
- You can dig for Bitcoin online, using special computers called mining rigs. Analogous to the old mining rigs that were used to mine gold. This is called mining for Bitcoin and if you own a mining rig you would be called a Bitcoin miner. Part of the miner’s job is to verify transactions that happen on the blockchain. When your mining rig discovers Bitcoin that Bitcoin is yours and it goes directly into your account, your Bitcoin wallet. You can have many wallets and they are free and anytime you acquire Bitcoin it goes directly into your wallet.
- Just like gold, you can buy or sell Bitcoin on exchanges. There are now hundreds of cryptocurrency exchanges online with more opening everyday. This is where the price is set through supply and demand as Billions of dollars worth of Bitcoin and other cryptocurrencies are bought and sold all day on exchanges around the world. And the number of people entering this new economy is growing daily. For instance if you wanted some Bitcoin now, you would simply take out your credit card, go to an exchange and put in your purchase order. You give your wallet address at time of purchase and once your purchase is verified by the miners on the network your crypto goes into your account. Every time Bitcoin moves, whether through an exchange or peer to peer, it is recorded on the ledger which is called the Bitcoin Blockchain.
- Like Gold, Bitcoin can make a great investment, and presently holds a significant store of value. This means that people buy it and just sit on it, hoping it will go up in value. We’ve seen Gold skyrocket in value over the past 60 years for a variety of reasons. Bitcoin too, has gone from $0 value when first created, to over $11,000 today. Bitcoin is the highest yielding asset in history, even far surpassing Gold. And like Gold there is a limited supply and growing demand, creating an inherent value that is almost sure to grow as demand grows. Is there risk? Yes. Is there risk in Gold? Yes. There is risk in any financial system or product.
- The final way I’d like to compare Bitcoin to gold is as a medium of exchange, as money. For thousands of years Gold was used to buy and sell. But it is bulky and hard to move especially in bigger amount and hard to divide into smaller amounts. So eventually silver and gold coins were used which was easier to pay for smaller items but still hard to transport or carry in bigger amounts. So paper money was introduced which would represent the gold. If you had $10 bill in your hand it was equivalent of holding a $10 piece of gold. You could easily trade in your dollars at any bank for gold or visa versa. So there was an equal amount of gold and the fiat currency in circulation and every dollar in circulation was backed by $1 of gold. In this way people were able to buy and sell using printed money but it was actual gold that gave it its value. This was called the Gold Standard and when Nixon took the $USD off the Gold Standard giving the banks and federal reserve the power to print money at their discretion, it instantly started to lose its value. Now all those dollars you’re working so hard to earn are suddenly worth a lot because there was a lot more supply. With Bitcoin, like gold, you can buy anything. It is a currency. If I want to buy a coffee that cost $2 I can buy it with $2 worth of Bitcoin. There are now apps and debit cards that convert your crypto to dollars right at the point of sale. Bitcoin is literally the new currency. Since dollars are no longer backed by the Gold standard and can be printed at the whim of banks and federal reserve, devaluing it on the holder, more and more people are turning to Bitcoin as their choice of trade. We can see there will be soon no need for dollars..
On more information or to learn how you can earn 6-12% on crypto assets holding it in the most secure wallet on the planet, go to www.ThisWalletPays.com or reach out to me. I look forward to hearing from you soon.
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