17
TLDR or Video version: https://youtu.be/18lbumfiLw0
What is Bitcoin?
The digital gold, the future of currency, or, simply, the Federal Reserve's nightmare. Bitcoin and its satoshies (essentially, satoshis are to Bitcoin what cents are to a dollar. 1 Bitcoin = 100 Million satoshis = 100 Billion millisats) are the biggest and most established cryptocurrency with a market cap of roughly $1 Trillion. Bitcoin's main use is for peer-to-peer payments, although it's increasingly being used as a store of value (literally think of it like digital gold) and there are better payment-focused cryptocurrencies. Bitcoin is based on a blockchain which serves as a decentralised LEDGER of transactions. Whenever a new block is verified and added to the existing blockchain by miners, that specific lucky miner is rewarded with a specific amount of Bitcoin which happens roughly every ten minutes. When Bitcoin was released, the reward per block was 50 Bitcoins, but right now, it is 6.25 Bitcoins per a verified block and that amount continues to halve every four years with the next halving happening in 2024. To keep it short, I will not get into the details, but there's a lot more to it really.
Why buy it?
Limited supply unlike gold for example. You can always mine more gold, but there are only 21 Million bitcoins and that's it. Out of those, roughly 18.6-18.7 million have been mined, also known as the circulating supply, which leaves us with roughly 2.3 million Bitcoins unmined although it is projected that it will take another 100 years before they are all mined.
One of its best features is that it is unregulated and decentralised so no banks or middlemen are involved in a transaction, purely P2P which ensures anonymity to an extent. Why is that good? Again, unlike gold, the price cannot be enforced. Unlike paper money, no government can decide that they suddenly want to print $3 trillion to "boost the economy". (*Biden, Powell stay in the background*) This separation from government and other official currencies is why a lot of people are interested in Bitcoin although that applies to most, if not all, cryptos.
Diversification. I personally think it makes a lot of sense to have cryptocurrency in your portfolio to negate the effects of inflation, currency devaluation, etc. How much to hold depends on what is your risk tolerance.
Bitcoin is established so it is the cryptocurrency that is least likely to be worth nothing. If you want crypto, but are worried, this is one of the safest choices. A very important feature of Bitcoin is that it is impossible to forge and nobody has been able to hack it, compromise it or interfere with the blockchain so far.
Why does it go up?
Two main reasons.
Currency devaluation. Only last year, the Federal Reserve printed 20% of all dollars ever! This year, they want to print even more. The more dollars there are in circulation, the less valuable the currency become and the more valuable real or limited supply assets start to be.
Mainstream acceptance. While it's still got a long way to go, it is becoming very much mainstream. One of the most popular companies right now, Tesla, bought a lot of Bitcoins and started accepting them as payment. Other companies include Microsoft, AT&T, Expedia, local branches of Burger King, KFC Canada, Overstock, some Subway branches, Twitch, the Dallas Mavericks, Zynga, etc.
Honourable mention: Elon Musk's tweets. Jokes aside, I'd honestly recommend making a twitter account and following some of the influential names in Cryptocurrency like Elon Musk, Michael Saylor, Anthony Pompliano, Scott Melker, the Winklewoss twins (yes, from the Facebook Social Network movie), Brian Armstrong, etc.
How do you buy it?
A lot of ways! Binance, Coinbase, eToro, even online banks like Revolut. Whichever way you choose, make sure that you are the one who owns the cryptocurrency, not the broker or platform. BINANCE and COINBASE are two of the biggest players in the market so most people choose to use them. I personally own my cryptos through eToro, but it's up to you to decide.
Hope that covers the basics (sort of)! There's a lot more to talk about, but I think this is the bare minimum.
