In the world of finance, every trader is looking for the next big investment to put their money in to earn a profit. Whether somebody is a day trader monitoring charts every day or someone building up wealth for retirement, profit is the name of the game. Cryptocurrency such as Bitcoin has revolutionized the investing world and how people think about value. When people thought about the value in the financial world they thought of physical items such as gold, bonds, shares of corporations, and commodities. Now that non-physical objects such as Bitcoin and Ether have become valuable, how will the financial world react? What used to be a tool for buying drugs and guns on the deep web has now become the hottest financial asset in the market.
Bitcoin was created in 2009 by a mysterious person named Satoshi Nakamoto (this is not his/her real name, the identity of the person who created Bitcoin is currently unknown). There are a certain number of Bitcoin blocks that can be mined by using mathematical algorithms. When the block is mined, a set amount of bitcoins are released to the miner. As time goes on, the algorithms become harder to complete, and the set amount of bitcoins released become less, allowing a limited number of bitcoins into existence. Whole new industries of mining operations and financial analysts have been created by this. Unlike fiat currency, which has an unlimited amount because governments can always print more, therefore lowering the value of that fiat currency, there are a set amount of bitcoins in existence.
In the past year, the price of one bitcoin has been skyrocketing. According to the CoinDesk Bitcoin Price Chart the price of one bitcoin on January 1st, 2017 was at $997. The price subsequently exceeded $7,000 that same year. There is much speculation over the cause of this price increase. One line of reasoning is that as the price increased, Bitcoin gained more media coverage, so more people started taking an interest in it. Another possible reason is that merchants are now embracing Bitcoin as a payment option for goods and services. Whatever the reason, big-name investment corporations are starting to ride the wave. Many exchanges are being created to allow Bitcoin amateurs a chance to hold the cryptocurrency.
Many people are starting to see the value of holding cryptocurrency in their portfolio. Investors who preferred to stay on the sidelines are now being dragged onto the field by the aurora of a quick profit. There will always be people that dismiss all cryptocurrency as a fraud or as a Ponzi scheme, but one thing is undisputed. With the recent rise in price, many people became rich. Holders of this asset have seen an amazing profit on their initial investment. One thing is for certain: Bitcoin is not going away anytime soon.