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Do you understand how bitcoin works?
Maybe you’ve heard of the currency, but you don’t really have a firm grasp of what it is and how it functions. Or maybe you know what bitcoin is, but you’re skeptical when it comes to understanding its value.
Either way, this Beginner’s Guide to Bitcoin infographic is for you.
Before we dive into the nuts and bolts of bitcoin, did you know one of the first purchases ever made with bitcoin was pizza?
As strange as it sounds, it’s true. In 2009, an early user sent 10,000 coins to a friend who, in exchange, ordered him two Papa John’s pizzas.
Those same coins used to order pizza are worth $32 million today.
Bitcoin has evolved significantly from a gimmicky way to buy pizza. That’s why it’s becoming more and more important to understand how the fast-growing cryptocurrency works. This guide will help you understand…
- What bitcoin is
- What makes it different from conventional currencies
- How to buy it
- Where to buy it
- Why you would use it.
While bitcoin may seem strange to some investors, it’s hard to ignore its popularity. Digital currencies are growing faster than anything else. And many believe bitcoin could be one of the most important inventions ever.
Back when those Papa John’s pizzas were purchased, the cryptocurrency community was tiny. There were no exchanges.
Today, around $2 billion worth of bitcoin is traded daily. That’s a higher volume than that of the SPDR Gold Trust (the most popular gold ETF), as recently noted by Bank of America.
You can spend bitcoin at an increasing number of places. But as I noted in the infographic, that’s not the real purpose of investing in bitcoin.
Think of bitcoin and other cryptocurrencies as digital gold. You hold it, and it appreciates in value over time as it spreads to more users.
No other asset class in the world has the potential to rise in price as much as cryptocurrencies, and bitcoin is still king of that asset class for now. I believe the price could eventually surpass $1 million per coin.
It is important to realize that you have not “missed the boat” if you don’t own any yet. The only limit on bitcoin’s potential is the number of people who believe it has value.
Today, only a few million people own any cryptocurrency at all. If it becomes widely adopted as a store of value and/or currency, today’s prices will look dirt cheap in comparison.
It has the potential to disrupt our current monetary systems like nothing seen before.
That’s why I love bitcoin.
We’re still in the early days of cryptocurrency. So if you haven’t invested yet, don’t worry. Time is on your side.
To get started, check out my top four cryptocurrency picks and a complete guide to investing in this space through our research service, First Stage Investor. See our new video about the service here.
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