Don’t Miss the Train
I’m so mad at myself.
This time last year, that is, May 18, 2016, a bitcoin was worth about $455. Now, May 18, 2017, a bitcoin is worth about $1,900. Let’s do some math:
100*(1900–455)/455 ≅ 317%
Suppose I bought 5 bitcoins on May 18, 2016, for $2,275.
Today, circa May 18, 2017, I could sell the bitcoins for $9,500. A gain of $7,225. Imagine how much personal (college) debt could be wiped out with this staggering gain.
A month ago, a bitcoin was worth about $1,215. If I bought 5 bitcoins a month ago, it would have cost me about $6,075. Today, circa May 18, 2017, I could sell the bitcoins for $9,500. A gain of $3,425, which still is impressive.
Bitcoin: Too good to be true?
I’ve known about Bitcoin for a while but dismissed it as something that geeks do for fun. Lately, the subject of block chain came to my purview, and you almost can’t talk about block chain, or blockchain, without talking about Bitcoin. I attended a tech event in Cambridge, MA, on Block Chain this past April and got to talking with a fellow from Mexico—he was starting a micro-lending venture using blockchain technology. I asked if he had any bitcoins. He said, “yes.” I asked how he got his bitcoins. He talked about wallets, etc. He told me how he got comfortable with buying bitcoins once he discovered that he could sell the bitcoins and recover his fiat currency easily. I was determined to get some bitcoins when I returned home.
I subscribed to courses at Blockgeeks because I wanted to know more about blockchain and took a course titled “Blockchain and Bitcoin Fundamentals.” Once I had some idea of how Bitcoin worked, I went to find a wallet and bought some satoshi. At $1,215 per bitcoin, I was hesitant to buy a full bitcoin, little did I know that the value of the bitcoin would increase so dramatically over a short space of time.
A satoshi is one hundred millionth of a single bitcoin (0.00000001 BTC).
I actually find the concept of how value is built into bitcoin fascinating. Mind you, bitcoin is just a piece of software. So, this thing is growing by leaps and bounds in value because there is demand for it. If people start selling the bitcoins en masse, the value will probably go down. But I have a feeling people will hoard for a while. This is because there is a limit to how many bitcoins can ever be generated. That limit is 21 million. So what happens when all the bitcoins have been generated? The value of the bitcoin, when compared to fiat currency (paper money), will have to get bigger. Now, there might be a problem if all of a sudden we all started trading in bitcoins. In this case, how would we value bitcoins and would we have enough to go around?
Anyway, if you want to jump on the Bitcoin bandwagon, head to 99bitcoins.com — you’ll discover all the ways you can acquire bitcoins there. If you’re looking for the easiest way to buy some bitcoins in the US, head to coinbase.com. If you’re worried about whether Bitcoin is too good to be true or worried about someone stealing your bitcoins, sit back and watch the train go by.