Why to invest in Bitcoin – introduction
Bitcoin has become one of the most attractive forms of investment. At the moment of writing the present text, a single bitcoin unit is valued around U$ 62.300, which represents an unthinkable number for most investment assets or other usual forms of investment.
In fact, this is the exact reason why bitcoin has gained so much attention in recent years, even from people with no experience in investing.
The problem, however, is that only a small number of people understand what really is bitcoin and how this kind of investment works.
In order to understand it a little more, the first point to note is the fact that bitcoin is not a type of investment in itself. Bitcoin is just the most popular option among the cryptocurrencies.
To put it simply, a cryptocurrency is just another type of currency, but digital. In the same way that there are “physical” currencies like the dollar and the yen, there are also digital currencies (or cryptocurrencies).
However, there are crucial differences between these two types of currencies.
For instance, differently from the physical currencies, which have a centralized control of their distribution by financial institutions, the cryptocurrencies are decentralized and controlled only by their very users in an open access system.
For that reason, most people believe that cryptocurrencies are not safe, but this is not true.
In fact, all transactions between cryptocurrencies are protected by a type of cryptography that makes almost impossible any attempt of theft or forgery.
To help you understand more about all this, in this text we introduce some of the main reasons for investing in bitcoin.
Capital protected from economic inflation
The first reason for investing in bitcoin is to protect your capital from economic inflation.
In countries with unstable economies and always subject to different economic programs due to arbitrary political decisions, inflation is a common issue responsible for provoking the depreciation of the currency value.
Given its decentralized character, bitcoin is not subject to inflation or various other forms of value fluctuation caused by distinct elements, such as sudden increase of the money supply (more printed money), indexation to other economic indicators, or even problems caused by natural disasters.
One of the reasons why bitcoin is protected from inflation is the fact that bitcoin supply is controlled by a protection protocol in order to avoid the inflationary processes that are very common to physical currencies.
Universal value
The second reason for investing in bitcoin is its universality.
As we know, the value of any currency is always subject to alterations caused by political decisions which are, most of the time, made of an irresponsible manner.
In the opposite way, due to its decentralized character, bitcoin is a currency without a country, i.e., the value of bitcoin is not directly determined by monetary policies from any nation.
Bitcoin is considered an “universal” currency, to invest in bitcoin gives you the possibility to use it in any location.
Although the use of cryptocurrencies for the payment of everyday services is still not so popular, this already is a reality for many companies in various countries. In these companies, it is possible to pay their services with cryptocurrencies, among them, bitcoin is the most accepted.
High degree of security
The third reason for investing in bitcoin is its high degree of security.
The reason for this is that bitcoin information is protected by a special cryptography system called blockchain.
Blockchain is an open access cryptography method that protects each bitcoin transaction by creating a unique code for each one of them. As a result, all bitcoin transactions are easily traceable because the bitcoin system stores their record.
Another important point related to bitcoin security are some characteristics that prevent theft attempts.
All cryptocurrency investors are required to have a digital wallet, protected by password, which makes bitcoin theft much more difficult than physical currency.
Besides, blockchain technology allows public access to these records with no need of any form of government control. For many people, this represents a big step towards the decentralization of government control over the economy.
Through this form of decentralization it is possible to control monetary inflation, something that can be of great benefit for the general population. Moreover, decentralization can add even more value to the general savings of any individual.
If you are interested but do not know how to start investing in cryptocurrencies, please continue to follow our material with easy-to-follow hints for every novice investor!
