Bitcoin is a kind of digital currency which is heavily protected by encryption technology. The technology is used to regulate the generation of units of bitcoin and also to verify the transfer of funds on its network.
When bitcoin was birthed in January 2009 (that's about eight years ago), many people didn't take it seriously. Some people called it a scam, a Ponzi scheme and said it would wither out in no time.
And it was worth little; very little. People didn't value it, and there are reports of people buying thousands of bitcoin with loose change.
There's one story of someone who paid 10,000 bitcoins to buy two pizzas delivered by Papa John's. 10,000 bitcoins!
Nowadays, ten bitcoins is enough to buy you a car. A brand new beautiful car, not the Ferrari you've promised your self, but something shiny with wheels.
Early bitcoin investors arewould be counting their money by the truckload now if they didn't lose the password to their bitcoin wallets along the way. Even if you invested significantly just a year ago, your joy should know no bounds at the moment as it would've appreciated considerably.
Bitcoin was worth $585 on August 9, 2016. One year later, it has jumped to $3,432.
Imagine you had bitcoin worth a thousand dollars in 2016. Your money would've more than tripled by now.
So, because bitcoin is getting more popular, more people are putting their money in it, making it more expensive. But is it too late to invest in bitcoin?
It depends on what you have in mind. Are you thinking long term or short term?
If you're thinking of investing in the short term, you cannot be sure of anything. The market is volatile. Too volatile at times.
It can drop at any moment, and it can rise tremendously without notice. If you want to buy coins and sell it in the short term, you need to be prepared for a sudden 40% drop or an unexpected 30% rise.
Despite appreciating considerably for the most of the year, bitcoin dropped to new lows in the middle of July. The coin fell below $2,000, prompting many people to start selling their coins in a panic.
However, less than a month later it bounced back, hitting a new high of $3,500- an increase of $1,500.
In the short term, anything can happen. No one can say for sure this is how the market will look like.
So it is really risky.
However, if you're thinking long-term, it probably isn't too late to invest in bitcoin as its future looks very promising.
Bitcoin has really proven itself as a means to transfer and store money fast and efficiently. And it's safe. In addition to this, its applications are expected to expand, meaning more adoption across the globe.
One major thing that makes bitcoin attractive is its decentralization. Bitcoin is not owned by any government or group of people so it won't crash easily or be manipulated by corrupt central banking systems.
And nobody will run away with your money. In some quarters, it is believed that bitcoin will set the foundation for the future of global financial systems.
If you consider these, coupled with the fact that a solution to its scaling problem has been implemented, you'll agree that there's only one way for the currency to go.... up. Investor's confidence will increase, and this will, in turn, make it rise.
Bitcoin is worth what it's worth because people believe in it. And the more people believe and invest in it, the more it is going to appreciate.
There are talks of the currency hitting $5,000 before the year runs out and things seem to be on course towards this prediction. We only have 4 months to find out if this will come to pass.
Or not. That remains to be seen.