Because it is not such a long story, the cryptocurrency market "survived" a large number of events. To date, cryptocurrency is the most dynamic industry, whose development is often compared to a roller coaster. His great successes are followed by many basses. In this article we will talk about the history of digital coins, the people who paid attention to them at the beginning and became rich (and those who have taken a step back), we will give you the answer to the main question: " worth investing in crypto now or has this ship already sailed? " So, first.
Content:
(please, click on the topic to scroll to it)
- When and how did the digital currencies appear?
- How much could you earn if you had bought cryptocurrency in past years?
- The most popular stories of highs and lows in the cryptocurrency community
- How to buy and store Bitcoin?
- When is it better to sell cryptocurrency?
- Where can you pay with cryptocurrency today?
- How profitable are investments in cryptocurrency today?
- Conclusion
1. When and how did the digital currencies appear?
The day, which is believed to be a point of reference, is October 31, 2008. That was the exact moment when a person (or a group of people) under a pseudonym of Satoshi Nakamoto published an article "Bitcoin: a peer-to-peer electronic payment system". There was a detailed description of a functioning principle of a new decentralized electronic monetary system, in which there was no need for intermediaries. The Bitcoin network was launched at the beginning of January 2009, the first block was found on the same day, the award was 50 BTC.
At that time, only the geeks were interested in Bitcoin, there was no particular interest among investors, funds and especially the government. In September 2009, BTC received its first rate, which was $ 1 for a little over a thousand coins. But in several months the situation has changed, new versions of the network have been released, vulnerabilities and problems have been resolved, and then the users' interest in this innovation has begun to grow.
In 2011 the first cryptocurrency exchange MtGox appeared, which at that time became the center of the cryptocurrency industry. The currency rate rose, it was 5-6 cents for a BTC. But in mid-2011 an accident happened, which slowed the development of the sector for over a year, the MtGox exchange suffered an attack by a hacker. However, Bitcoin was unstoppable, as many users around the world realized that it was not just another financial bubble, but a fundamentally new format of money, in which there was no place for monopolies and intermediaries.
2. How much could you earn if you had bought cryptocurrency in past years?
Warning! Reading this paragraph can cause an unbridled desire to tear off your clothes, your hair and perhaps an attempt to bite your elbow. We warned you, so we are not responsible for your emotional state. 🙂
Well, actually, people who bought Bitcoin from 2010 to 2016 are now operating with a very impressive amount of currency. Let's calculate, what would have invested in the BTC $ 1000 in this time frame, starting from the end of 2018. We start from 2017 and we spend last year by year:
- At the beginning of 2017 (the rate is about $ 1000, it was possible to buy 1 BTC), now $ 3 800, the increase is 380%;
- At the beginning of 2016 (the rate is $ 430, it was possible to buy 2.32 BTC), now $ 8 816, the increase is of 881%;
- At the beginning of 2015 (the rate is $ 313, it was possible to buy 3.19 BTC), now $ 12 122, the increase is 1212%;
- At the beginning of 2014 (the rate of $ 771, it was possible to buy 1.29 BTC), now $ 4 902, the increase is 490%;
- At the beginning of 2013 (the rate of $ 14, it was possible to buy 71.42 BTC), now $ 271 396, the increase is 27 139%;
- At the beginning of 2012 (the rate of $ 6, it was possible to buy 166.66 BTC), now $ 633 308, the increase is 63.330%;
- At the beginning of 2011 (the rate of $ 0.05, it was possible to buy 20 000 BTC), now $ 76 000 000, the increase is 7 600 000%;
- the first bitcoin rate established (2009-2010) $ 1 – for 1 000 BTC, it was possible to buy 1 000 000 BTC, now this is $ 3 800 000 000, the increase is 380 000%. This is the number of coins held by the mysterious creator of Bitcoin – Satoshi Nakamoto.
We want to remind you that this growth in investments corresponds to the current Bitcoin rate ($ 3 800), and not to the December peak, when the price for a currency has risen to $ 20,000.
3. The most popular stories of highs and lows in the crypto community
Let's start with the main key and talk about the lucky ones, who have invested in time and are condemned to a better life.
- Eric Finman
He is the youngest millionaire in the world's cryptocurrency. He is 19 years old and has 403 BTC, which, according to the current rate, is 1.8 million dollars. He bought Bitcoin, when he was only 12 years old. His grandmother gave him $ 1,000, which he would have to save for college, but chose the way to become a cryptocurrency investor. While time proved to be new, he made the right choice. - Brothers Winklevoss
These are the brothers, who have sued $ 65 million from Mark Zuckerberg for stealing their idea and created Facebook without them. From the total amount of compensation, they took 11 million dollars and bought Bitcoin. At the time of purchase, the currency was exchanged for $ 120 for a currency. It means that they bought about 91 666 BTC, based on the current rate 414 million dollars. - Chris Larsen
It is officially the richest man in the world, who made a fortune with the cryptocurrency. He is a creator of the Ripple currency, which is now taking 3rd place in the global Coinmarketcap Ranking. Now Chris's fortune is estimated at around $ 8 billion.
There are many people who made a fortune with the cryptocurrency, to mention all, the whole book will not be enough. So, let's move on to those poor souls, who were a breath away from wealth, but lost it.
- James Howells
He was extracting Bitcoin in 2009 and treated it like a game, since at that time no one could even dream of it future of BTC. He stopped doing it after a couple of years (at that time there were already 7,500 Bitcoins in his wallet) and he took his old laptop apart. In 2013, he was cleaning his house and threw away the hard drive, on which the Bitcoin wallet was. Literally, a few months later, when the currency reached $ 1 000, James recalled, that he threw away $ 7.5 million. At the current rate, his hard drive would cost 33.9 million dollars. It's really hard to imagine what Howells suffered and still suffers now. - Bitcoin pizza
On May 22, 2010, two more expensive pizzas in history were sold. At that time, the cost of Bitcoin was nominal, and the first miners simply did not know what to do with their "fun money". And here, a user with the nickname "Laszlo" wrote on one of the Bitcoin forums that would have paid 10,000 coins to those who would have delivered 2 pizzas. At that time, the agreement seemed quite normal, according to that rate, Laszlo did not pay more than was due for his fatal lunch, but later in August, two pizzas cost him $ 600. To date, Laszlo bought two pizzas for 45 million dollars. Every year, on May 22nd, it is "celebrated" as the day of the Bitcoin pizza. - Anonymous from Australia
The person wanted to remain incognito, but in any case he told everyone his sad story. He started mining in 2009 and extracted, as he says, thousands of coins (the exact number was not mentioned). After the complexity of the network had grown, he stopped doing it and transferred his wallet to a USB drive. He thought that if the coins were offline, nothing would happen to them.
When, at the end of 2013, the Bitcoin rate reached $ 1,000, he remembered his millions, but had to face a terrible disappointment, the flash drive exploded.
4. How to buy and store Bitcoin?
The sad stories mentioned above about the loss of Bitcoin lead us to the next very important paragraph, which concerns the acquisition and storage of digital resources.
Bitcoin can be purchased today in many ways:
- on exchanges;
- through online heat exchangers;
- through offline exchangers (I work only in big cities for now);
- extraction (not exactly the purchase, but still the process of obtaining coins).
Cryptocurrency can be stored:
- on exchanges (the most convenient option, but not the safest);
- on warm wallets;
- on cold wallets (hardware) (the safest, suitable for long-term archiving, does not imply the daily use of resources).
5. When is it better to sell cryptocurrency?
Looking at the chart capitalization of the cryptocurrency market, you can see, consists of ups and downs with increased security in a long-term perspective.
Source: CoinMarketCap
The answer to when it is better to sell coins will be different for long-term and short-term (speculative) investors.
Long-term investors
Ideally – never. As can be seen, the upward trend in the cryptocurrency market has remained since its inception. Certainly there are moments of correction in the short term and even more prolonged, but historically, the market after them has not only recovered, but has also taken new horizons.
The main advice that will help long-term investors to get the most profit involves timely monitoring of news and maintaining calm during correction. There is no need to sell all your Bitcoins after every expert statement that cryptocurrencies are expected to cause dot-com crashes. Such as predictions on cryptocurrency they are made by incompetent people or are part of market manipulation. The information published by the mass media should be strictly verified. It is also necessary to keep track of new coins in perspective and try to invest in them a small percentage of savings in the very early stages.
But there are still some cases in which a coin should be sold:
- ordinary scam;
- do not follow the Road Map by team, which could cause the currency to collapse in the future.
Short-term investors (traders)
For those who want to manage their capital, literally every single day, trading is the ideal option to multiply investments. Here you can and must sell your assets, once there is an opportunity. Sometimes it is better to bear a small loss to put the funds in use and get a profit faster, rather than waiting for income from a deal concluded. But of course it depends on the chosen strategy.
6. Where can you pay with cryptocurrency today?
Today there is a sufficient number of goods and services in the world, which can be easily purchased for digital coins. The most important factor here is the government. For example, in Europe, Germany, the Czech Republic, Spain, Austria, Belgium, and Holland are the most developed in this regard. A slightly smaller number of places, where you can pay with Bitcoin, can be found in Bulgaria, England, Poland, Romania. Literally, there are many of these places in France and in Ukraine.
In the Russian Federation cryptocurrency is not allowed, but in private it is possible to find a sufficient number of offers for the exchange of goods or services for digital resources.
In the United States, it is also officially permitted to purchase goods for Bitcoin in some states: New York, Florida, California, Washington, and unofficially similar offers can be found across the country.
The cryptocurrency became quite widespread in Japan, the land of the rising sun. A well-developed trade for crypts is in Thailand, Malaysia, Indonesia, South Korea.
What can you buy exactly for Bitcoin?
- Real Estate. The main developer in the United Arab Emirates, Knox Group, offers the opportunity to buy luxury accommodation for Bitcoin. In New York, in Manhattan, you can buy a VIP apartment for Bitcoin from the Magnum Real Estate developer. These proposals can be found everywhere, in almost all the major cities of our planet.
- Cars. In addition to real estate, the cars you can buy using cryptocurrency are premium-class models. The most important offers belong to the most technological sedan – Tesla Model S. And the country, where there is the largest number of car dealers and where you can pay with BTC, is the Czech Republic.
- Do you travel. Airlines are willing to accept payment in digital currencies since 2014. Air Lituanica even canceled the commission if you pay with BTC.
- Education. The first was one of the universities of Cyprus. Now you can pay your education for many great universities all over the world (King College, USA, University of Cumbria, UK, etc.).
- Electronics and software. In this area the payment with cryptocurrency is as common as any other.
- Other goods and services. Huge amount of private advertising that is presented all over the world in completely different sectors. As you can see, the number of places where you can pay with Bitcoin increases year by year.
7. How profitable are investments in cryptocurrency today?
If you look at the BTC chart in 2018, you can certainly notice a correction and a return of the impressive value of the peak value of 60-70%. There is no general answer to the question: "When is it better to buy Bitcoin?", Since it may require a capacity to predict the future to be told. All we can do is analyze the sector for fundamental reasons of increase or decrease.
- Fact n. 1: blockchain technology is very prospective, as it solves a series of problems (transparency, decentralization, security, etc.).
- Fact n. 2: the number of new crypto startups in 2018 has increased by several times compared to previous years, meaning that even if 1% of them are successful, this will give the sector a new stimulus.
- Fact n. 3 – in the long-term perspective, all investors still have a huge advantage.
- Fact n. 4 – in 2018, cryptocurrencies were discussed for the first time at the G20 and all participants found that it is useless to ban them, they must be regulated and maintained.
- Fact 5: The growth potential is still enormous, since the total capitalization of the cryptocurrency market is about 130 billion dollars, while the money resources of humanity are estimated at 90 trillion dollars.
8. Conclusion
The cryptocurrency market is developing at a very alarming rate; for a short time of its existence, it has already generated a large number of new millionaires. Obviously, to buy a coffee or a bread in any store with cryptocurrency, there is still much more to do.
After analyzing tons of information, we can give you an answer to the main question, which concerns the relevance of investment in cryptocurrency. We believe that cryptocurrency is still a very promising investment area. But it should be done with the cold mind and not counting on early enrichment. You should definitely diversify your portfolio, periodically, copy the data of your wallets on high-quality hard drives (preferably different), learn how to filter information and not fall into the market manipulations. In this case, the chances of success in this field are much greater.
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