Published originally on Medium
Bitcoin is going to change the world — and if you take a second to learn about it, you’ll understand why. After an abysmal 2018 to 2019 stretch, Bitcoin is nearing an all-time high. The price is up 166% this year and big-name investors don’t think it’s going to stop.
Why is Bitcoin rallying right now? Because more people are starting to accept, and trust it as a currency.
Fintech companies PayPal and Square started letting their combined 350 million+ customers use cryptocurrency. Additionally, billionaires are starting to trust it more too.
CEO of Twitter and co-founder of Square, Jack Dorsey invested $50 million into Bitcoin, and MicroStrategy’s chief executive Michael Saylor likened investing in crypto now to investing early in companies such as Apple or Facebook.
Square, for example, isn’t just invested in crypto — they believe it will shift the ideologies of the world:
“Square believes that cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system, which aligns with the company’s purpose.”Jack Dorsey
What is cryptocurrency? And what does it all mean…
The U.S. may be the world’s largest economy, however, the Standard & Poor’s Global Financial Literacy Survey ranks it №14 (tied with Switzerland) when measuring the proportion of adults who are financially literate. To put that into perspective: the U.S. adult financial literacy level, at 57%, is only slightly higher than that of Botswana, whose economy is 1,127% smaller.
Sad but true.
So, if most Americans cannot understand their 401(k) what hope do they have in understanding or trusting Bitcoin? But let’s get back to the subject at hand…
Think of Bitcoin as online gold. It was invented by Satoshi Nakamoto, who some believe to be a team of developers, not one single person.
Bitcoin was created at the depth of the 2008 Financial Crisis, where big American Banks were bailed out by the government for their reckless financial spending. Essentially, the banks ruined our economy and were given a free pass. Too big to fail, and too big to jail some have pointed out to the bank’s bailout.
The Bitcoin weren’t having any of it. They created a decentralized, digital currency with no banks involved at all. Being decentralized means there is no single administrator but rather a public ledger of transactions that anyone can store on their computer.
And the biggest caveat for Bitcoin is that the inflation rate is set in stone by code. It cannot be changed. The US dollar is the antithesis of this, especially when the government can print money like mad and devalue our currency.
Early into its life, Bitcoin had no real monetary value. Mark Grabowski, an associate professor at Adelphi University who teaches a course on Bitcoin and author of “Cryptocurrencies: A Primer on Digital Money” said Bitcoin miners would trade Bitcoin back and forth just for fun.
It would take more than a year for the first economic transaction to take place, when a Florida man negotiated to have two Papa John’s pizzas, valued at $25, delivered for 10,000 bitcoins on May 22, 2010. “That transaction essentially established the initial real-world price or value of bitcoin at 4 bitcoins per penny,” Grabowski said.
Today, that same transaction “would have a value of $114 million,” said Peter C. Earle, economist and research fellow at the American Institute for Economic Research. In honor of this pivotal moment, cryptocurrency fans and supporters call May 22 Pizza Day.
Why you should care
In February 2011, Bitcoin’s price crossed the $1 threshold. “For its first few years as it grew, its price was under $2,” Bitcoin bull Kris Marszalek tells money.usnews.com. “In June 2011, it hit its first bubble, rocketing to around $31 before sinking back down to the single-digit range.
It’s hard to see where the value is heading for Bitcoin, as only 21 million Bitcoins will ever be produced. Today, however, some investors think it could be valued at $100,000 by the end of 2021.
Crypto investor Anthony Pompliano told CNBC that demand for the coin was rapidly outpacing supply, especially after its “halving” in May, when the number of Bitcoins awarded to miners was cut in half. This process occurs roughly every four years and serves to limit the supply of Bitcoin coming into the market.
The investor also said that Janet Yellen, President-elect Joe Biden’s pick for treasury secretary, was “notorious” for tolerating higher levels of inflation and that this could also push the coin’s price higher.
“I don’t think it’s that crazy to see a $100,000 Bitcoin price by the end of 2021,” Pompliano said. “And if we continue to get bigger and bigger buyers … if this kind of tips over and all of the sudden it becomes kind of a consensus trade, it wouldn’t surprise me to see something even higher than $100,000.”
Here’s a list of companies that accept Bitcoin as payment:
- Burger King
- The Dallas Mavericks
- Norwegian Air
- Whole Foods
- Porn Hub (Don’t ask)
Bitcoin is in that stage where most people are confused whenever you mention it. Within our lifetime that isn’t going to be the case. The question will steer from: “What is Bitcoin?” to “Where were you when you decided not to invest?” Especially with how uncertain the US dollar is, smart investors will start to put their money in more reliable places, like Bitcoin.
Another Bitcoin bull, recently told Yahoo Finance that “Everyone should put 2% to 3% of their net worth in Bitcoin.” There’s no better time to jump in than today. And if you still think it’s too complicated, or you just want to shrug your shoulders and act like you don’t need to care. Then make way for the New Rich.
“If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.” – Satoshi Nakamoto, creator of Bitcoin