The consistent rise and fall of Bitcoin
Bitcoin has seen a recent rise in popularity due to its sudden increase in value. Bitcoin was valued, in comparison with the Canadian dollar, at roughly $24,000 in early December. Now, in mid-January, Bitcoin has almost doubled in worth by being valued at almost $50,000.
Most people’s information about the subject either come from obscure social media posts or a friend who seems to have too much time on their hands. When one tries to research the subject, terms such as “cryptocurrency” and “blockchain” are thrown around, leaving the individual with even more confusion.
Bitcoin is a cryptocurrency, meaning that it is a currency primarily existing in the online world. This is in contrast with other forms of currency that one can physically hold, such as coins or cash.
Similar to other cryptocurrencies, Bitcoin is almost entirely unregulated in comparison to the system of physical currencies. For example, the Canadian dollar is regulated by the Canadian government and is subject to government regulation and management.
Since Bitcoin has no master, it exists irrespective of any regulation. What is most fascinating about this fact is that there is no government managing its value; the value of Bitcoin is primarily dictated by people agreeing that a Bitcoin has value.
In discussing blockchain, things get a little messy, but I will focus on the most important aspects of it. Blockchain technology is the program that manages transactions of Bitcoin. When someone buys something with Bitcoin, blockchain is used.
What makes blockchain so unique is the fact that it is virtually untraceable. It is impossible to trace a Bitcoin transaction. The only way in finding out who has made a Bitcoin transaction is by being told by the person who made the transaction.
With Bitcoin’s recent sudden rise, many are asking the question about the lucrative aspects of it and if it is something that should be taken seriously. I would argue that it is.
Bitcoin is just another form of investment. Although Bitcoin it does have a strong “meme culture” surrounding it, many people have become self-made millionaires by investing in it. An investment that can reap such a fortune is defiantly worth taking seriously.
Despite this, it is hard to ignore the very lucrative aspects of Bitcoin. Bitcoin’s stock seems to rise seemingly out of nowhere and crash, also seemingly out of nowhere. The issues caused by this are something that I can personally attest to.
My adventure with Bitcoin began in 2018 when my friends and I bought some. At this time, it was valued at roughly $12,000. We mostly did so as a joke with me buying $30 worth of Bitcoin and my friends buying roughly the same.
To our dismay, Bitcoin saw a major crash in 2019 to a value of roughly $5000. This left my $30 investment to be worth $12. However, much has changed in the era of 2020 and Bitcoin has exploded in worth. My $30 investment is now worth $80. I decided to sell and have reaped a $25 profit after fee deductions.
Going through this experience made me realize many things about Bitcoin, other than realizing that had I invested $500 in 2018, I could have made over $2500; specifically, to the more sinister aspects of Bitcoin.
Bitcoin saw this major jump in price due to the pandemic. In general, Bitcoin seems to go up when crises appear.
For example, Bitcoin saw minor jumps when former President Donald Trump launched missiles into Syria in 2017. Further, Bitcoin is infamously well known for its frequent use on the dark web, including transactions for illegal drugs and even online human trafficking.
Is Bitcoin the future of investing? I think it is. It is hard to ignore all the profits that can be made. But that does not mean it is not still a very lucrative investment to partake in.
Further, the ethics of such an investment are very much open to one’s own opinion. However, one must ask themselves that if we allow legal gambling, why not allow Bitcoin, and thus why not invest in it?
As many investors say, “high risk, high reward.”