Disclaimer: This story is for entertainment purposes only. It is not a legal or a financial advice. Consult an expert, before making any major financial desicions.
We all have this friend, relative, or colleague, who keeps telling us the same story repeatedly. It is the story of how this person missed out on the best investment opportunity ever.
Sadly, in today’s story, I will be this person.
In 2010, I was in the last year of my post-graduate program. On one August weekend, I heard for the first time about Bitcoins. What is a cryptocurrency? And how can a non-regulated currency have any value? This is stupid — I didn’t even give the subject any thoughts; it was a weird unlikely concept.
What is Bitcoin?
It is a decentralized digital currency without a single administrator or central bank. The currency can be sent from user to user without the need for intermediaries.
The transactions are verified and recorded in a public distributed ledger called a blockchain.
Bitcoins are generated via a process called mining. Basically, by lending your computing power to support and manage the blockchain, you will receive Bitcoins as a reward. In 2010, it was still easy for single users to mine Bitcoins; now, it is almost impossible to mine from a normal PC.
In 2010 buying Bitcoins (BTC) was very tricky. There were only limited exchange platforms for BTC. People were mining the cryptocurrency.
The value of any form of money is given by three major attributes; trust, adoption, and scarcity. Gold, for example, was the main payment method in the old ages. It is scarce, and therefore people trusted that its value would remain, and they adopted gold as a payment method.
In Bitcoin's case, the value of the cryptocurrency can be measured by its growing base of users and merchants. Like all other currencies, Bitcoin’s value comes directly from people willing to accept them as payment.
In August 2010, the Bitcoin price skyrocketed 900% within 5 days. The value of one Bitcoin went from $0.008 to $0.08. I think this sudden increase in value was the reason I’ve heard about them all of a sudden.
Hypothetically speaking, If you managed to buy $1000 worth of Bitcoins In August 2010, you would have had 12.5K BTC. As I mentioned before, buying Bitcoins, back in 2010, was incredibly hard. People would mine the currency — it was possible, but buying Bitcoins wasn’t as easy as it is today.
As of writing this story, 1 BTC is $17,920.70.
12.5K BTC are currently, at this moment, equal to $224,008,750.00.
In 2010 a programmer got very excited about paying with Bitcoins. He ordered two pizzas from Papa John’s (worth about $30) and paid ca. 10,000.00 BTC for the pizzas.
Those are expensive pizzas
In 2010, no one in his right mind would have invested $500 in Bitcoins, yet $1000. It is incredible to see the development of this new concept of currency.
Bitcoins paved the way for many other cryptocurrencies to rise on the market and gain attraction. Ripples, Etherium, and Litecoin, are some of the alternative cryptocurrencies (Altcoin).
And where does it go from here? Well, we have to wait and see. However, a Citibank analyst thinks that Bitcoin may surpass $300K by the end of 2021.
Only time can tell.
Walid Al Otaibi -WAO- is a top writer in Gaming and Technology. He works at an engineering company in Germany. He comes from a multicultural background and is located in Germany since 2003. He is writing about Arab Culture, Multiculturalism, Finance, and Trending topics.