Bitcoin as the store of value and digital gold
At this point probably most of you already heard about Bitcoin, the first and original cryptocurrency. It turned out that the concept of decentralized money is one of the most significant inventions of recent years and a great investment option. If you would invest $100 in BTC back in 2010 you would be a millionaire today. Return of Investment (ROI) of Bitcoin is historically amazing and BTC is gradually outperforming every Fiat-based investment option out there, hands down.
Below we can see how ROI of Bitcoin and other cryptocurrencies looks like:
Source: (c)Datalight
When we take a deeper look at this graph we may assume that the price of Bitcoin and other cryptocurrencies will continue to grow. It’s unwise to think price grow pattern potential will suddenly halt or the price will revert drastically, after all price of most cryptocurrencies is finite, there won’t be any more Bitcoin ever mined other than 21 million planned since the beginning.
However, we need to remember that some experts might argue that there is no ‘real’ value behind a cryptocurrency, i.e. no machines, factories (other than ASICS and other mining equipment), patents and land as with a stock corporation. But that case is also affecting all traditional Fiat currencies. If people lose confidence in the dollar, a $100 bill will eventually be nothing but paper, and we experienced situations where paper money value was reduced to zero in the past. Some critics might say that Bitcoin is already too expensive to buy. It’s true that BTC price is high – at least compared to altcoins. But people who are they don’t take into account the fact that we can purchase not only 1 full Bitcoin but a tiny fracture of it. Basically Bitcoin (or any altcoin) can be purchased with $1 (or less!) if you desire to do so.
Altcoin investments still viable?
As you can see Bitcoin has definitely the best ROI out of all cryptocurrencies but this does not mean it’s not profitable to buy altcoins. If you are thinking about investing in digital currencies diversification is advisable and needed. Also buying altcoins is profitable when choosing the right and solid coin to buy! Often we can observe situation when during short period of time, when specific altcoin gain more value against both the dollar and Bitcoin itself. With altcoins we also have access to some advanced model of money earning – for example the staking from Proof of Stake type of coins. Cryptocurrency using Proof of Stake consensus allows you to generate more coins while staking coins, without the need of mining or purchasing expensive mining rig.
Everyone should own a portfolio of cryptocurrencies
While we cannot tell be absolutely how future price of Bitcoin or altcoins will be, as cryptocurrency is still in its early phase and remains an experiment. I am more than 50% sure that the cryptocurrency will succeed beyond our wildest dreams. We can see that Bitcoin has existed for 10 years with no interruption nor immutability concerns. BTC has a rapidly growing user and transactional base. I am also sure that some serious altcoins will follow BTC and real use cases and network effect will impact their price. Last but no least, in times of economic recession which sooner or later will appear, owning asset not corelated with standard financial avenues could be a the best triumph card anyone can obtain.
Happy staking!
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