Bitcoin: Don’t Buy!
A woman recently got retired and was given her little benefits.
Being a Proverb 31 woman ( virtuous woman) she needed to keep doing what she knows best to do and this time, she invested her money into bitcoin for returns.
The first investment vehicle she put her money in was Treasury Bills when it was still double-digit, then it was reduced to a single-digit interest rate. She wasn’t comfortable with the returns and the rising inflation. She resorted to her Blockchain son to ask which credible cryptocurrency she could buy into. Bitcoin was his response and fortunately for her investment after a period of time, Bitcoin did a 600% increase after she bought a fraction of it for 100,000 Nigerian naira and later earned N600,000 return on investment. This is a story out of many that are getting financially free from a mismanaged economy like Nigeria via Cryptocurrencies investment.
I am sure you will be asking, why did I tag this article, “Bitcoin Don’t Buy” while giving a positive story at the beginning of this piece, this is because there are things you need to understand before thinking of getting involved with Bitcoin or any other Cryptocurrencies.
These include understanding how Bitcoin and alternative cryptocurrencies started.
Bitcoin is actually a digital currency that runs on a blockchain infrastructure, created with a technology called cryptography, and is not issued or controlled by the government or any third-party institutions. It was launched in 2008 by a man or a group of anonymous persons by the name Satoshi Nakamoto and was commercialized in 2009. At that time, the whole idea of cryptocurrency was still a bud to maas it were today.
Satoshi Nakamoto started the creation of Bitcoin by publishing what we call a white paper, demonstrating how the Bitcoin system will work and he titled it “Bitcoin: A Peer to Peer Electronic Cash System”, and by January 2009 the system started working with a bitcoin price value trading at about 50 naira equivalent as against the current price of one bitcoin at about 30,000,000.00 ($62,000) at the time of writing this article.
People who used their laptops to acquire bitcoin as an asset in 2009 were the Cyberpunks anarchists and those who don’t really believe in government and its regulatory policies that already have some aspects of their lifestyles affected; thereby excluding them from the global financial economy to gain access to financial inclusion.
Since then, bitcoin has been seen or proven not only as a perfect tool for financial freedom but also as an economic instrument to liberate from the government controls of money and bad management of the economy by oppressive financial institutions.
After the invention of Bitcoin, other Blockchains and Cryptocurrencies emerged i.e Mastercoin, Litecoin to Ethereum and were deployed using blockchain technology. A technology that ensures all the cryptocurrency records, financial transactions or data being sent across the network are correct and accurate and cannot be changed by any.
Bitcoin is the money/asset that is now being sent from one person to another person using blockchain technology.
Historically we know money as primarily a means of exchange and it spans economic, political, and social issues. A little addition to what money is known for is that; it is based on trust. Trust that the other person will accept it and also can trade it to some other person as well. Our forefathers used cowries as a means of payment, some used stones as money, some used commodities and so it keeps evolving from coinage, gold, fiat, and to this present age as digital currency due to technological advancement where the society now make use of bank mobile apps, debit/credit card, etc to trade with money as a medium of exchange for goods and services.
Since the technological improvement and age of the internet, innovators have tried to create a system that will make it possible to exchange value between two users and failed until now.
Why did Satoshi create Bitcoin?
Cause of the aforementioned deficiencies and government mismanagements of the economy; one of which was the Great Recession; a period of marked general decline observed in national economies globally that occurred between 2007 and 2009. The scale and timing of the recession varied from country to country. Another reason is the banks/bankers sitting as middlemen to collect charges and serving as tools by which governments control the people. Central Banks were created to manage inflation which means inflation will continue to occur. Say you saved 10million naira in the bank since 2010, and the money can get you a 4 bedroom duplex in Lekki by that time, do you think that same 10million naira will get you a 4-bedroom duplex in Lekki today? This is as a result of inflation that keeps occurring and affecting government-issued fiats currency.
So Satoshi thought of a way of moving trade and money back to their original form but in conformity with the new digital innovation or via the internet, hence a deflationary currency called Bitcoin was created whereby, people don’t need to go to the banks in order to send payment to someone else in exchange for a value, rather they can send it directly to the recipient and also prove that they sent such amount of money without a third-party or the bank’s confirmation.
A trustless system, unlike the banking system where you need to trust the bank to keep the record of your money and also send your money to a recipient after deducting their charges. Now, Countries, organizations, and individuals are buying and keeping Bitcoin and other cryptocurrencies as a way of hedging against rising inflations and as an investment vehicle, checkout El Salvadore, Grayscale, Microstrategy, Tesla, and even China and the USA govt have some Bitcoin.
The original idea of Bitcoin being just a peer-to-peer electronic cash transfer system morphed into other uses cases and this is due to the deflationary economic system built into it which amongst them are the 21million bitcoin and funneled supply of the total supply which is currently at 6.25 to those securing the network called Miners and the reward will continue to reduce every 4 years until the whole 21 million bitcoin is in circulation.
Bitcoin can either be a store of value, a medium of exchange, or a unit of account.
So why Bitcoin price keeps going up?
That is because the demand is more than the supply. The ecosystem is based on a value economy, meaning, price is determined by market forces. Maybe after reading this article, you decide to go get bitcoin or any other Cryptocurrency out there, you have added to the many numbers of people trying to get it with a limited amount of bitcoin in circulation. If a seller has 10 people that he wants to sell to, he will likely sell to the highest bidder or buyer willing to pay more. Currently, Nigeria is ranked as the 3rd active country in the world that trades bitcoin and even other cryptocurrencies, why? Cause we are trying to preserve our hard-earned money from devaluation.
Bitcoin presented an escape route for masses to silently tell those at the helm of affairs in the country, “Go sleep with yourself” cause it is borderless and has continued to defile governments attempts at killing or stopping it except Countries like China that is depriving its citizens of accessing the network.
I am sure by now you will be thinking I am a Bitcoin Maximalist, nope! I just need you to understand where we are coming from and how it started before thinking of putting your money on what you don’t understand. There are over 12,770 Cryptocurrencies with 412 Cryptocurrency Exchanges and a Market Capitalization of $2,408,942,115,623 as Bitcoin dominance is at about 46%, it is only wise we talk more about it. You can also take a look at the first 10 cryptocurrencies in the market(coinmarketcap.com) or learn how to stake Sonergy token at sonergy.io aside from the Stablecoins(topic for another day). Don’t be fooled by Meffy’s position regarding cryptocurrencies, business is going on via the peer-to-peer system and they know but can’t do nada about it. Liberate yourself.
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Writing by: Surveyor Faith Titus
Founder/CEO sonergy.io,
Cofounder: Blockchain Nigeria User Group.
Checkout website: https://www.sonergy.io
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