Reasons Why You Should Own Bitcoin and How To Use It.

In investing in any new business like Bitcoin, getting in early affords the investor opportunity for big returns. For example, Apple shares before the iPad launch, Amazon, Starbucks, Netflix shares before the share boom. Many books have been written to help investors to spot trends in the marketplace to find the next winner before it shoots up, an example of such book is Peter Lynch’s “One Up On Wall Street.”

So what’s the next big thing?

Heard about Bitcoin? A cryptocurrency everyone seems to be talking about, or have you been wondering why everyone seems to be talking about it. Wonder no more, Bitcoin emerged 2017 fastest growing asset, making big headlines in the media and generating buzz on the social media. Well, it’s for all the right reasons you can think of. Last year December 2017, the value of one bitcoin hit a record of nearly $17,749 according to Coinbase (San Francisco-based platform for holding and trading digital currencies.). Considering it was just $780 on January 1, 2017, that’s a gain of 2,175 percent.

I have met quite a number of people who are kicking themselves for not getting in earlier and couple more are wondering what the fuss is all about.

For the dilettante, Bitcoin is the first and most valuable of what are now more than 1,500 digital currencies, also referred to as cryptocurrencies. Bitcoin as well as other cryptocurrencies such as ethereum, litecoin, zcash, thebillioncoin and many others, are traded on coin-exchange and unregularized by a central bank, unlike traditional currencies like the naira, dollar, pounds, and yen.

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The Bitcoin idea was born during the 2007-2008 financial crises, which left many people embittered with the global financial system for high fees and a credit crunch that led to many people losing their homes. In 2008, a white paper outlined the design of bitcoin, published under the fictitious name of Satoshi Nakamoto, whose identity as a group or individual is yet to be ascertained. In 2009, Bitcoin was released to the public and It rapidly gained legitimacy the following year as merchants such as Expedia and Microsoft started accepting it for payments.

In order to own Bitcoin, a certain set of people mine for it using computers by solving difficult mathematical equations. An alternative is to buy or sell in coin exchanges such as  LibertyX, Xapo, Coinbase, Bitstamp, Huobi, and Kraken. These exchanges also provide digital wallets to hold the bitcoin like a savings account. You would also register for a digital wallet with specialists like Circle, Bitreserve, and Airbitz.

The easiest way to acquire bitcoin that we found is through Coinbase

Coinbase has a simple setup process for this service, create an account to register, link your credit or debit card, or your bank account to exchange money into and out of your local currency to buy and sell on the platform.

Wondering why you should get on the Bitcoin train? Below are reasons to own Bitcoin and ways you can use it.

  1. Potential high returns

If at the start of 2017 you bought 100 bitcoin for about $780 each, a total investment of 78,000 would be worth around $800,000 today, based on a bitcoin value of $8,527 on February 2, 2018.

Bitcoin forecast is looking good, they suggest it can still go up, surpassing heights of about of $16,411 it recorded in December 2017, that is a good reason to buy.

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The CEO of StormX, a money earning platform for performing small tasks, is bullish, saying that as institutional investors get into cryptocurrencies, demand will be pushed up and growth will be inevitable. “The cryptocurrencies could see trillions of dollars in institutional money flow in over the next few years.”

Some would-be investors are skeptical thinking the almost 2,000 percent surge in 2017 is its peak, and some commentators warn of collapse in the vein of the dot-com crash of 2000.

The biggest risk posed on Bitcoin is on the regulatory side. About a quarter of all bitcoin trades take place in China. In 2013 China suspended trading of the currency and also compelled exchanges such as BTCChina to stop transactions that fueling the demand for Bitcoin could spark a financial crisis. This temporarily led to a sharp drop in bitcoin.

  1. Portfolio Diversification

Often times financial advisors keep telling investors to diversify their holdings, (Don’t put all of your eggs in the same basket). If you have diversified already by owning stocks or bonds, it is a good move to invest in riskier assets that may yield higher returns as long as you don’t mind losing the money.

If you have a lot of big local companies in your portfolio, you can boost your overall returns and lower your risk by adding foreign bonds and stocks, and maybe even a few bitcoins.

  1. Using Bitcoin can get you acquainted with how to use what could be a future form of currency.

Cryptocurrencies are widely expected to be the medium of buying and selling in the future, and no matter what happens to Bitcoin now, it can help you get acquainted with how Cryptocurrencies generally works. In April 2017, Bitcoin was legalized as a method of payment in Japan, Rusia recently said it is considering regulating its use. Furthermore, in December 2017, the Chicago Mercantile Exchange launched bitcoin derivatives; this made it possible for hedge funds bet on the future value of the currency in the market.

This year, Singapore announced the testing of a technology to issue its own cryptocurrency, Estonia, Nigeria wanting not to be left behind has announced they are looking into the possibility. The advantage it has over traditional banking system is the fact that it’s cheaper to do transactions.

“That is perhaps the future,” said Kolawole Ojo, a programmer and cryptocurrency enthusiast in the United States.

  1. New business model opportunities

Cryptocurrencies run on the blockchain, this technology is perhaps more exciting than the cryptocurrencies themselves. The blockchain technology is designed for keeping records, a sort of public ledger. All bitcoin trade is entered on this ledger as a line, similar to entering a new data on a spreadsheet.

This technology also allows other transactions to be done and verified simultaneously, efficiently, faster and cheaper than the clearance and settlement of the stock markets. Stock exchanges such as the Australian Stock Exchange (ASX) are looking to leverage on the blockchain technology to track transactions and settlements.

Kolawole Ojo further believes that with blockchain technology, it would be cheaper and more efficient to process micro- or even nano-payments unfeasible at present because of high processing fees, for instance buying a single item on the internet for $0.10.

“This technology opens up a completely new system of rewarding the creator of the work, or for making payments, for example, a smart car paying for its own parking space,” he said.

So what can you do with your bitcoin?

Malls and Restaurants have started to accept bitcoin, third-party bitcoin payment platform system such as iPayYou.io, allows you shop on Amazon with your Bitcoin.

On the other hand, Bitcoin price is always on the increase (with few bears), it is becoming increasingly common for people to hold Bitcoin as an investment with the hope of good returns. This, however, is the basis of some warnings against bitcoin.

CEO of JPMorgan Chase the biggest bank in the U.S., Jamie Dimon a Bitcoin critic said in September 2017 that “Bitcoin won’t work as it was invented out of thin air”. The former chairman of the U.S. Federal Reserve in an interview with CNBC in December 2017 said: “Bitcoin is not a rational currency”. Worst of all maybe, in December 2017, Howard Davies, who is the chairman of the Royal Bank of Scotland, sounded a note of warning of impending big losses for buyers by comparing it to Dante’s Inferno saying “Abandon hope all ye who enter here.”

Who’s right?

We are not certain yet, but if the value continues to rise, there is a possibility of making some bucks at the same time learning about what could be the future of currency.