- March 28, 2018
- Posted by: iweb solutions
- Category: Uncategorized
One of the concepts most people don’t get is WHY does Bitcoin — which is basically a line of computer code — have value.
The answer is a simple economic principle called:
Supply and demand.
Everything in the world is based on this principle.
For example, if there’s a painting on your wall that you paid $50,000 for.
Logically it shouldn’t be worth this much. The cost of the canvas and oil was probably less than $200.
But since it was a rare piece from a well-known artist (i.e., low supply, high demand), the painting has value.
This principle applies to the money in your bank account right now, too. Which, by the way, is already mostly digital.
The only difference between fiat money (dollars, pounds, etc.) and crypto is who controls it.
Fiat money is controlled by banks and governments
Crypto Assests is controlled by the people (i.e. peer-to-peer)
For this reason, the supply and demand fluctuates based on ACTUAL supply and demand — and not manufactured demand from banks and government.
Right now, there’s nothing stopping the government from conjuring trillions of dollars and adding them to our economy.
Which is exactly what happened in 2008 with the financial crisis.
It’s actually funny that people question the value of crypto because the real joke is how an infinite supply of paper have value.
Unlike fiat currency, the supply of Bitcoin is FIXED.
No one can create more than it’s limited supply of 21 million.
As the demand for Bitcoin goes up, so will its value.
The governments and banks, obviously, aren’t too happy about this. This is why top Wall Street guys like Jamie Dimon of JP Morgan says people who buy Bitcoin are, in his words, “stupid.”
Jamie’s company, JP Morgan, is getting into Bitcoin futures trading.
With all this going on it may feel like you’re missing out by NOT buying Bitcoin. If that’s how you’re feeling, I have some advice.
There’s a lot of hype around Bitcoin right now. The demand is increasing and, as a result, so is the cost to invest.
But letting your emotions get the best of you isn’t a smart investing strategy. When buying Bitcoin (or any other crypto), it’s wiser to think about the long term.
Sure, you can day trade crypto assests too, if you want. But even if you’re buying and selling every day, you STILL want to be logical about your decisions.
The bottom line, is this:
Bitcoin and crypto isn’t going anywhere
The data shows it’ll continue going up in value
It’s NOT too late to take advantage
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