Key Things to Know Before Using Bitcoin

Everyone knows Bitcoins is the king of all cryptocurrencies, and the reason is simple. It is the first digital coin that gave birth to the crypto ecosystem and to the thousands of cryptocurrencies now referred to as Altcoins. Bitcoin wasn’t as popular in the early days as it is today. Its introduction was followed by resistance and controversy. It was nothing more than a technology for geeks at first.

The general belief was that a large scale Bitcoin ecosystem wasn’t conceivable. Today, the story is different. We cannot even begin to fathom the ramifications Bitcoin will bring to the world. The price of Bitcoin at this time of writing this article is $9213 reported by Blockchain.com. Amazing right? Although the coin has faced numerous price crashes in recent years, the prognosis is very bright.

Bitcoin and fiat currency

Bitcoin is better than fiat currency for a number of reasons including its limited supply, divisibility, and portability. Unlike fiat, Bitcoin can be divided by an infinite amount of times, which means you can pay with as low amount as you want. Bitcoin has limited supply as well, It’s inflation is cut in half every 4 years with the halving. Bitcoin is also portable, you can send 1 or 20 million coins in a single transaction. Due to these properties, Bitcoin will not only succeed as a store of value but as money as well.

Things to know before using Bitcoin

The price of Bitcoin fluctuates every day, it can crash and pump in a matter of minutes. For example, there has been a continual crash in the price of Bitcoin recently. Bitcoin was rounding down to $7000, but in the wake of Saturday 26th of October, the price suddenly changed and started a sudden, explosive increase to the current price of $9213. This means the price rose over 2000 USD within just one day. If your intention is to “Hold” Bitcoin, you will need to have a strong stomach because the price can dump as fast as it can rise.

Bitcoin reaches its max Supply

If Bitcoin eventually reaches the next halving in 2020 May, the first effect is that the price should pump through the roof all the way to $50k. This $50k projection is possible because of the supply shock effect. If the supply of Bitcoin gets cut in half but demand stays the same, naturally the price will rise. The price of the coin has already tested the $20,000 mark on the 17th of December 2017. So it’s not far as a possibility that the price will put in a 2-3X due to the supply shock effect.

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