The price of a Bitcoin is now at almost $12 000 (almost R170 000), which is well above the $3800 mark of January this year. I believe this is significant, as it proves that Bitcoin and the whole cryptocurrency concept has something to it.
Before we go on: I am not an expert in Bitcoin or cryptocurrencies. I don’t have the faintest clue what a blockchain is or how it actually works. The same can be said for my computer. I know it’s got a hard drive and a CPU, but exactly how that works is way beyond me. I do know that I am typing this on a computer right now. Even if I don’t know exactly how it works, I know what it can do for me. That is what this article is all about. What does the average Joe need to know, and what can Bitcoin do for you?
What is a cryptocurrency?
It is simply a currency like Rands, Dollars, Pounds and so forth. Except that instead of having a single institution controlling it, it is controlled by everyone. The ‘crypto’ part is just the security aspect of it, as we still want our transactions to be private. So let’s ignore the ‘crypto’ aspect to make it easier to understand. It is just a currency. We get many of them which all offers something different. Bitcoin, Ethereum, Iota, Ripple and many many more. Bitcoin is important, not because it is the best, but because it is the biggest. Currently about 65% of all cryptocurrency worth is in Bitcoin.
Cryptocurrency changing the world
Cryptocurrencies have the potential to change the world and how we transact with other people or businesses. It won’t happen overnight, or not even in the next 10 years, but it is challenging the way we are doing things, such as storing our money, making transactions and saving for our retirement.
Today we entrust our hard earned money into bank accounts which are controlled by people, institutions and a database. Many conspiracy theories exist about a number of people controlling us with these instruments. But let’s not even go there…
Many people think that cryptocurrencies are just a way to transact without paying taxes or leaving a paper trail, and yes it can be. But have you ever received many spam calls just after taking out a loan or getting a new cellphone contract? Hmmmm… Clearly proving that the transactions we are doing are putting us on some database somewhere… It might not be the actual rand and cent information in our bank accounts, but more the behaviour and type of transactions we are doing. Where will this end, and what kind of privacy do we really have?
Practical uses
…ummm… Let me think….No I can’t yet buy a coffee with it…. At least not here in George… So what then…. And exactly this problem is where we are today. We can’t actually do much with a Bitcoin. Think of this as the beginning of the internet. Nobody could envision all the things we are doing today or the implications it is having on our lives. But imagine you could’ve invested money into Apple, Microsoft or IBM in the early 90’s. The tech industry just started and there were many huge successes and failures. Nobody knew the end result (are we there yet?)
Why it is the future
In December 2018 it reached a high of $20 000 and then it took a massive plunge to a lowest of about $3400. Many people lost a lot of money and many said that it was just a bubble and that’s it for cryptocurrency. But it has bounced back, which indicates that it is something to take notice of.
Here is a number that will show how significant it is: The total value of Cryptocurrency is roughly 350 billion dollars. That is roughly equal to the GDP of South Africa. So is South Africa significant? It is the same size…
To show that with zeroes. Here it is in Rands: R 4 900 000 000 000
Understand the dangers
The whole cryptocurrency market is the Wild West at this stage. There are many contradictory messaging and there are definitely people that will try to mislead and extort people. There have already been scams and pyramid schemes and there will be many more. The market is unregulated. But that is exactly the point. It must stay unregulated. The moment someone controls it, it will just become another bank/institution/database.
There are many more aspects to cryptocurrency that cannot all be listed here, and I definitely encourage you to further investigate and make up your own mind.
Why you shouldn’t buy Bitcoin
Because you will probably lose a lot of the money you invested. The price of Bitcoin is very volatile. Increasing or decreasing by 10% in a day is not uncommon. Most people would like to get 10% increase per year on their savings. That is the scale of how things can change.
However: If you have money that you can lose (yes all of it), and you have made up your own mind, then go for it. At this stage the real value in Bitcoin (and most other coins) is not in the actual transactional aspect. The value just fluctuates too much. Imagine buying a pizza today for R100 worth in bitcoin, but tomorrow it is worth R150. That pizza will give me heartburn! Or getting paid for a job, after which it decreases in value…
Is Bitcoin Good or Bad? I don’t know.
What will it be in 10 years? I don’t know.
Is this a good time to buy? I don’t know.
Is it significant? Yes.
Will it change our lives? Yes.

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