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    A Quick Guide to Bitcoin

    Posted by Ammar Moiz - March, 17

    Bitcoin is a digital currency that is said to offer a lower transaction fee than the conventional online payment method. Here's what you need to know about Bitcoin and its history.

    What is Bitcoin?

    In 2008, an unknown person or a group of people known by the name of Satoshi Nakamoto invented Bitcoin. Bitcoin is a digital currency that is said to offer a lower transaction fee than the conventional online payment method

    A decentralized authority operates Bitcoin, not the government. It is governed by a design decision by the developers of the core technology to limit its production to a fixed quantity of 21 million BTC.

    At the time of writing this article, one Bitcoin is valued at $56,000

    A Quick History of Bitcoin

    Main events that took place in the history of Bitcoins:


    2008

    Introduction to Bitcoin.


    2009

    The first Bitcoin block was mined.


    2011

    Bitcoin was now used for online transactions between individuals and global e-commerce providers.


    2013

    Bitcoin’s price started to increase with more people investing in the cryptocurrency. Bitcoin reached a new high of $1,164.


    2017

    This year witnessed remarkable growth in the prices hovering around $1,000 that increased to a sky high of $20,000 in March.


    2020

    The economy completely shut down due to the ongoing COVID-19 pandemic. However, Bitcoin refueled its price to $18,353 by November.


    2021

    So far, this year has been the best year for Bitcoin. The price crossed $50,000 in February and is still on the rise.

    Bitcoin is probably the best performing investment of all time, but it might also be the most volatile investment and volatility has a way of luring people into ill-timed and costly investing choices.

    Bitcoin’s price is volatile because of speculation. While it’s possible to buy physical goods with Bitcoin in some places, the large majority of Bitcoin transactions are still investment based. As such, people buy and sell Bitcoins like they would any other investment. This buy-sell cycle is what makes Bitcoin’s price so volatile.

    Tesla x Bitcoin 

    Elon Musk is known for taking big risks that lead up to a success story. 

    It is no surprise that electric-car maker Tesla, purchased $1.5 billion of bitcoin. It also expects to begin accepting payment in the cryptocurrency for its products in the future.

    Some corporate professionals described Tesla as an ‘unnecessary addition of risk’ to the firm as bitcoin is seen as a volatile asset that is prone to sharp price volatility.

    However, Tesla made it clear in its statement filed with its regulator the Securities and Exchange Commission that it sees bitcoin as a chance to diversify its cash and cash-equivalent holdings.

    Bitcoin in the Long Run

    Bitcoin is identified as a Speculative Bubble.

    A Speculative Bubble is a situation where asset prices appear to be based on inconsistent views about the future.

    Bitcoins 

    Based on the predictions made by industry experts, it is easy to see that Bitcoin growth could be enormous considering the current prices. However, we still do not know how and when will we see Bitcoin price take a dip.

    Bitcoin’s first bubble exploded in 2011 when it inflated to a maximum of $32 in June and rock bottomed at $2 in November. 

    In 2017, it reached its all-time high but in a matter of days, it dropped down 45%.

     

    Using this bubble, experts can predict what can be the future of bitcoins. 

    The minimum and maximum price forecast of BTC:

    Year

    High

    Low

    2021

    $325,000

    $17,000

    2022

    $275,000

    $42,000

    2023

    $145,000

    $63,000

    2024-2025+

    $1,000,000

    $275,000

     

    Cryptocurrencies are extremely volatile, and this forecast is by no means an indication of what will likely occur. It is only designed on the basis of the past trends. It is advised to invest only what you are okay to lose, and not to go all in. 

     

    If you already use Bitcoin, LetsTango.com now accepts Bitcoin as payment, so you can shop as much as you can!

    1 Comment

    • Professor SAAAW

      April 13 2021, 12:28PM

      I am Sheikh Ahmed Al Jabar Al Abdul Wahab.
      I am a professor from Kuwait University, this blog is written exceptionally well! Good job, keep it up!

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