Bitcoin — three things that make it special.

Why Bitcoin could continue long-term growth for the foreseeable future

There is a lot of mis-understandings about bitcoin, and what it is. I thought I would address a couple of things you find out as you delve deeper into the subject.

Bitcoin isn’t just a digital currency — Bitcoin is a digital currency it’s true, but it’s a lot more than that.

What is known as the “blockchain” is a revolutionary new technology which means that transactions are stored as a public record on many different computers, and as there is no one central record, it is basically un-hackable.

Bitcoin is decentralized

Bitcoin isn’t made by the government when they feel like, a complex algorithm needs to be solved to create a new one, so you can’t just create 5 million bitcoin and fix the price. This means the price will grow at an incredible rate, with huge swings, but eventually will become more stable as the blockchain becomes a part of everyone’s life, whether they know it or not.

Bitcoin is more versatile than bank s— Here are three examples

Lets imagine: You live in Brazil, or another country where it’s difficult to move your money out of the country. In Brazil the government now charges you tax on money that you move out of the country that isn’t sent to an account with your own social security number.

Enter Bitcoin: You can simply buy bitcoin in Brazil and then swap it for another currency and within an hour you have your funds.

Lets imagine again: You want to buy a house in Japan. You have to use the bank transfer system, spend massive fees, and it will take days.

Enter Bitcoin; you buy Bitcoin and buy the house, the funds are transferred in 30 minutes and the house is yours at next to no additional costs.

Lets imagine again: You don’t trust the government and want to keep money out of the bank system, but don’t want to hoard large amounts of cash around the house (besides, notes become obsolete and people are going to notice a pallet of cash when they come to visit your house and may think it’s weird right?).

Enter Bitcoin; You buy a USB drive and keep your Bitcoin on it, drill a hole in the roof and store it away. As long as you only keep it on that harddrive, they are safe, you can even print out Bitcoin in what is called a “paper wallet”.

Bitcoin is only PART of this technological revolution. Big businesses are starting to adopt the technology behind this, and creating new coins and businesses around the idea.

I will talk a little more about why the value of bitcoin is going up so much at the moment later. In this article I just wanted people to understand why Bitcoin is more than just a passing fad. It’s not something for nerds and nut-jobs, it will make life easier for a lot of people. While the price may come down further before it goes back up past $5000, imagine the price rise as it, and other cryptocurrencies, become more widespread.

Andrew “Davies” Nifield

Head of Education at GSI Markets.

www.gsimarkets.com