From Digital Gold to Everyday Use: Understanding What Bitcoin is All About
Did Satoshi Nakamoto, the mysterious entity who created Bitcoin, ever dream of the success that his creation enjoys today? Probably not. After all, BTC’s creator had one primary goal in mind: to drive extensive reforms, especially in financial systems. But there’s one thing we can all agree on: Bitcoin is an incredibly successful digital currency, and its success is yet to reach its zenith.
But before even going further, what is Bitcoin? If you can’t answer this, then learning the basics of BTC and how it works is only sensible. But if you’re already familiar with these concepts, continue reading. Below, you’ll know more about this exceptional digital currency and why it’s infamous today.
Enjoy.
The Story Behind the Digital Gold Moniker
Most investors and crypto enthusiasts refer to Bitcoin as digital gold. That is because, first, this cryptocurrency is scarce, just like actual gold. Gold is scarce and incredibly difficult to extract. That is why it’s scarce today. Presently, only approximately 201,296 tons of this precious metal exist above ground.
The other reason why BTC is called digital gold today relates to volatility. Gold is significantly volatile, and its prices often shift without warning. The same applies to the harbinger of the crypto era, Bitcoin.
Investment and Speculation
Between 2010 and 2012, Bitcoin was worth a few dollars. Investors were buying 1 BTC from $0.40 in 2010. This crypto started attracting widespread attention in mid-2013, and its price surged significantly. By 2017, 1 Bitcoin was worth thousands of dollars. Since then, BTC prices have risen and fallen countless times.
This price fluctuation has affected many investors. Savvy individuals have profited handsomely from them through active speculation and trading. But this volatility has also made many knowledgeable investors not to consider BTC a safe long-term investment.
Everyday Use and Payments
Millions of people own Bitcoin today and consider it a part of everyday life. Many use it to pay online merchants who accept this crypto, from big box retailers and subscription service providers to gaming companies and real estate brokers. Additionally, some Bitcoin investors use their crypto to pay for different commodities in brick-and-mortar stores, including luxury watches, fast cars, collectibles, and trendy clothing.
Many savvy well-wishers now prefer making BTC donations because they benefit the recipients and are tax-efficient. At the same time, some platforms allow users to purchase gift cards or vouchers using bitcoin and use them to purchase items at specific outlets.
Bitcoin also allows users to handle peer-to-peer transactions without any middlemen like banks. These transactions are fast, further enhancing cross-border remittances at extremely low fees.
Recap
Bitcoin is one of the most valuable digital assets today. Presently, 1 BTC is worth tens of thousands of dollars. And according to predictions, the value of this crypto will increase in the years to come. However, despite being invaluable, BTC is highly volatile, which is why some people call it digital gold. That aside, many savvy individuals are investing in this digital currency and using it to make payments in everyday life.