THE CRYPTOCURRENCY INVESTOR
The cryptocurrency investor is a next-level special kind of investor who fully embodies the concept of financial freedom by supporting the global trend of financial sovereignty and decentralized finance (DeFi).
WHAT IS CRYPTOCURRENCY?
Bitcoin & Ethereum, are two of a few thousand types of cryptocurrency. Crypto is a digital asset that uses Blockchain technology, to provide absolute and unfettered end-to-end cryptographic security. Cryptocurrency (and Blockchain in general) removes the needless (and greedy) ‘middleman’ from so many processes that we’re only just seeing the tip of the iceberg in terms of possibilities. This is a very exciting space in investment terms.
Decentralization (of certain cryptocurrencies) removes the middleman, giving control back to you.
Low transaction costs.
Highly efficient and scalable (for certain cryptocurrencies).
High potential returns.
Secure network using blockchain technology.
Runs worldwide, borderless.
Ease of use continues to evolve.
High volatility – not everyone can stomach the ups & downs.
Non-reversible transactions (can be lost and unreturnable if not handled correctly).
Although adoption continues to increase, it is still a fairly new asset class.
Complicated (although user experience continues to improve).
Cryptocurrencies are digital currencies designed to work as a medium of exchange.
It uses cryptography to secure and verify transactions.
Cryptography is the use of mathematical algorithms and secret keys to encode and decode data
If you have not seen this visualization of all the worlds money and markets, it gives you a ton of perspective where things are:
What is Bitcoin?
Bitcoin is the first cryptocurrency, a new form of digital currency that allows for decentralized, trust-less payments anywhere around the world on the internet.
Created on January 2009, around the aftermath of the great financial crisis
Created by a person or group under the pseudonym Satoshi Nakamoto, whose identity remains a mystery
Bitcoin is decentralized, meaning no single institution or person controls it
The smallest unit of a bitcoin is called a satoshi (one hundred millionth of a bitcoin), making it highly divisible
Bitcoin is the world's largest digital currency by market cap
Bitcoin is pseudo-anonymous, your Bitcoin wallet address is recorded but your identity isn't
How does it work?
Bitcoin runs on a decentralized public ledger system around the world known as the blockchain
The ledger contains every transaction ever processed.
It is transparent and cannot be reversed, thus cannot be tampered with and making it immune to hackers.
Facilitates payments through peer-to-peer technology
"Miners" process the transaction on the blockchain
Bitcoin mining requires solving of computationally difficult puzzles by computers around the world
What problems do bitcoin solve?
Cheaper fees compared to traditional finance (like credit cards that have high fees to the merchants, which gets passed back on to you through higher prices)
Bank the unbanked - there are many countries with people that have very limited access to traditional financial institutions.
Why do people invest in bitcoin?
Bitcoin has absolute scarcity. Only 21 million Bitcoin can ever exist, a very finite supply, making it the world's hardest asset. You can't beat math!
Bitcoin is a store of value, the internet's digital gold.
With Bitcoin's protocol, roughly every 4 years, the amount of Bitcoin miners can earn is cut in half - making the asset deflationary compared to fiat currency, which continues to be printed.
Hedge against inflation
It is a pure free market
It is the "people's currency".
Bitcoin Fun Facts:
There are roughly 35 million millionaires in the world and there are only be 21 million total Bitcoins possible to be in existence. This means that not every millionaire will be able to own 1 Bitcoin.
The first Bitcoin purchase was for 2 pizzas for 10,000 BTC. That's $95 million worth of pizzas. (based on today's price of $9,500 per BTC).
Out of the 21 million total Bitcoins possible, 4 million bitcoins are lost (lost private keys, deaths, Satoshi's locked coins). If you lose your private key, you lose your Bitcoins.
The last bitcoin that will be mined will be around year 2140.
Myth: "Bitcoin consumes too much energy.
Myth: "Bitcoin is mostly used for nefarious activities and money laundering"
Myth: "I will lose my Bitcoins if the world loses its power."
Myth: "Bitcoin is backed by nothing."
Facts: Compared to traditional financial institutions? Bitcoin consumes significantly much less. Also as of 2019, approximately 74% of BTC's electricity comes from renewable resources.
Facts: Less than 1% of bitcoin transactions are "illicit activity". Again, compared to fiat currencies? How much illicit activity takes place using fiat currencies?
Facts: Your Bitcoin will still be there. You will simply lose the ability to move them (well, you can still move them with radio transmission). But when the power does go back, so does the ability to move them once again.
Plus, you'll have more important things to worry about if the entire world's power grid goes down...
Facts: Bitcoin is the only form of free-market money. It is backed by math. It is backed by the highly secure network of immutable data and computational power by computers around the globe. It is decentralized and deflationary, unlike fiat money who's printing is controlled by central banks. Bitcoin is limited to only 21 million, making it very scarce. It is arguably the hardest asset in the world, making it an excellent store of value.
Bitcoin is not controlled by anyone or any company. It does not discriminate. It is the people's currency. Compare this to fiat money, backed only by the promise of governments and banks - who don't exactly have a perfect track record in history.