I woke up one morning and I had hit it BIG!! My bank account had quadrupled over night. I had no clue how or why, and honestly I didn't care. The elation that I felt was vindicating; I took a chance and boom, money in my sleep . I was a mogul, I was the next Warren Buffet... I had broken free.
Being moderately cognizant in the past year news about the boom, the bust, and the lure of becoming a Bitcoin millionaire has become infectious; exponentially increasing the amount of smug pricks in fedoras with faces glued to weird charts on their mobile devices.
The mystery surrounding Bitcoin is not only its greatest lure, but also its biggest insulation from new buyers. Stories of people blinking and making 1.5 million dollars from a virtual coin couldn't be true. It couldn't be this easy or more people would do it. Pat yourselves on the back because it's not that easy, it was never that easy. But for a while money was falling from the sky and nobody could completely pinpoint why a virtual token had permanently changed finance and became the richest institution in the world.
So what exactly is Bitcoin?
Bitcoin is a decentralized digital currency. Decentralized, as it functions without a central bank or a single administrator. It allows encrypted peer to peer transactions that are verified by a node (a redistribution point that executes a transaction protocol ) and these transactions recorded in a public ledger called a block chain. So in very simple terms Bitcoin is currency what allows quick anonymous internet transactions.
What's the big deal?
The bottom line is really decentralization. It is not subject to governmental instability or hiking interest rates that create depreciation, allowing it to hedge against the risk of currency markets, as centralized currencies (USD, EURO, YUAN) are subject to. And for traders this means a BIG thing, volatility.
Volatility creates the oscillations that mean equaled profits for those who own Bitcoin and trade them vs. centralized currencies and other decentralized cryptocurrencies.
In December, the volatility of cryptocurrency markets pushed the value of a single Bitcoin to about $20,000 propelling the Bitcoin blockchain to the richest financial institution on the face of the earth. Bitcoin became more valuable than multiple ounces of gold.
So why are people rooting against cryptocurrency?
Financial advisors tell you to stay out, major corporate future markets bet against it, and the first words out of a laymen's mouth when you mention it normally speak to the tune of "don't do it; you're gonna go broke." Admittedly I've seen the beauty of crypto and I've been slapped boxed into a corner as well, but for most people the issue is the mystery of the market.
Yes, it's volatile (like any market that moves with velocity). Yes it's subject to over-speculation (like any normal commodity or housing market). No, it's not backed by any hard asset (like the USD). And yes, you will hemorrhage money if you do not study the market (like any trading position). And once we reckon this the opportunity reveals itself and fear becomes excitement.
I have lost and made thousands of dollars trading cryptocurrencies like Bitcoin and Bitcoin itself. There are people who have lost and made millions of dollars as well. I am no genius, but I have no ego when it comes to investigating opportunity, and this is what Bitcoin is. My curiosity around Bitcoin has changed the way I view money and it will continue to broaden my financial curiosity. Day-trading stocks, playing the futures market, and bond markets, are all now much more accessible to my dollar and knowledge base because of my banking on Bitcoin. I've come to understand that the wealthy conceptualize money as a tool... one that we have not been taught to use. Oftentimes our ignorance breeds fear and we fall into the trap of missing yet another opportunity. Heed my warning... educate yourself, make informed decisions, and TAKE A RISK!