It's Thanksgiving Day! If you are fortunate enough to be celebrating the holiday with family and/or friends, someone will bring up Bitcoin and since you're an extraordinarily intelligent person, they will ask for advice: "Should I buy Bitcoin?"
I will not give an indefinite answer like "It depends". The answer is "yes, AND", and the "AND" is huge. Make sure whoever you're talking to pays attention to the "AND" and to the next five minutes as you repeat the following.
Yes, you should buy Bitcoin AND treat it not as an investment but as the cost for education. You would learn the following after purchasing Bitcoin.
- Security:
Bitcoin offers next level security inspired countless academic studies and businesses. On a personal level, Bitcoin ownership requires the most average of Joes to pick up some security fundamentals.
- If a person buys Bitcoin from an exchange and keep it there, he/she has to learn to use two factor authentication and to create a strong password. The latter is an art form to just survive on the Internet. Find out whether your password has been exposed here! (https://haveibeenpwned.com/)
- If a person decides to keep his/her Bitcoin, he/she has to learn what a cryptographic key pair is. In this pair, public key is similar to an email address where others can use to send Bitcoin to you; private key is your approval to send Bitcoin to others. Simply put, never EVER reveal your private key. Others can copy it and send all your Bitcoin to themselves. Who would have thought?
- The act of storing the private key is a major learning experience in itself. You will learn to not keep it online because most data online is visible to some entities, to not keep it offline in your devices because malwares are constantly extracting information from them, and to not write them down because who uses paper in 2017?
Blockchain technology
Bitcoin popularizes blockchain technology. One of the technological trends of 2017, it is hailed as the new Internet. Bitcoin is a simple use case of blockchain technology. Owning Bitcoin would compel a person to read about the technology behind the asset.Economics
Why is Bitcoin worth how much it is? Supply and demand. This many Bitcoins exist. The price indicates how much people are willing to pay to own Bitcoin. If more people want Bitcoin, price increases.
Why does Bitcoin worth anything? Fiat currencies like the US Dollar retains value because the US Government gives it power. The government has enough power to enforce the value onto the dollar, meaning that you can use $10 to buy pancakes and the pancake cook can use that $10 to buy flour, eggs, and milk. This is not true for all fiat currencies: for example, the Venezuelan currency, the bolivar, is not accepted everywhere because its government could not enforce the pancake cook to sell you pancake with 10 bolivars.
Bitcoin's value is backed by a network of more than 10,000 machines simultaneously verifying transactions and keeping a record of every transaction existed. There's a high level of guarantee in the network: if you send Bitcoin to someone, they will most likely receive it.Risk-aversion level and investing skill
Bitcoin's price swings constantly and dramatically. It is not for the faint-hearted. By putting money in Bitcoin, you could test how comfortable you are to see your investment loses half of its value in one day and gains the same amount in the same day.
With that, you learn to watch the market and follow the news that could impact the value of your investment. When to buy, when to sell, how often to buy/sell would become familiar.
Bonus! You might even pick up high-level math and coding to make trade bots to do the trading for you! Both skills are crucial for modern jobs, so you might even be able to jump career!Navigation through politics
What is Bitcoin used for? Is it a currency or asset or complete fraud?
We don't know yet, it's too early to say. Bitcoin is still in beta, meaning that it is still in development phase and not an official release yet (really, its most recent release is 0.15.1; an official release should have the first number greater than 0). And yet, people are violent in their opinion over what Bitcoin is and is not. Bitcoin politics is on par with American politics.
Reading countless opinions on Bitcoin would strengthen your ability to discern good arguments and solid evidence.
Could Bitcoin crash to the ground tomorrow? Less likely because of a distributed network of machines that give it value, but totally possible. Should you still buy Bitcoin knowing that your money could evaporate that easily? Yes, in the amount you're willing to pay for all the education associated with owning Bitcoin and joining the bitcoin community. If it goes to zero, you still earn knowledge. If its price tripled (like in my case), congrats!
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