Traditional investors have always approached digital currencies like Bitcoin with extra caution due to their highly volatile market value. However, the overwhelming performance of Bitcoin as an investment and a currency has attracted traditional investors in recent months.
Bitcoin is considered one of the most liquid assets in the financial market today due to the global establishment of Bitcoin exchanges, trading platforms and brokers.
Bitcoin’s high liquidity creates a viable ecosystem for investors to trade, especially those looking for short-term profits. Digital currency is also a practical long-term investment due to its particularly high demand in the market.
High market demand
Traditional investors often question the demand and value behind Bitcoin. Investors who have limited knowledge of technology struggle to understand the economics behind this digital currency and how its market value is determined.
Ultimately, like any asset in today’s market, the value of Bitcoin is directly dependent on its demand.
Therefore, the high market demand for Bitcoin guarantees investors a bright long-term future, as it is a deflationary currency. The value of Bitcoin will continue to rise until its available supply is maximized.
Trading Bitcoin is a more minimalist form of investment compared to trading stocks. Investors buy or sell Bitcoin on exchanges and store it in their wallets.
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Overall, Bitcoin offers significant advantages over traditional investments in several ways, financially and economically. This makes Bitcoin a viable investment in the short and long term.
Technology always plays a fundamental role in the quality of life for two human beings. From the beginning of the interaction of home with nature to provide resources for the sustenance of its family and community, innovation has been the promoter of all the leaps of quality of life identified in history. A lack of techniques for extensive planting of food allowed either home to abandon or nomadic to settle in places rich in resources, guaranteeing more time to dedicate themselves to other activities. With the Industrial Revolution, possible or access to products and services, previously unavailable to a larger part of the population, to a much higher number of people, based on two production processes and a consequent reduction of two prices utilizing increasing scale and breeding novos markets. In addition to the increase in income per capita resulted in a population explosion caused by an increase in the number of benefits and services available. Technological innovations will also influence the way people communicate, starting from networks of local relationships or borders for communication, independent of their location.
Embora many authors and attached the same part of the society of still using technology as something scary, based on the great uncertainties that it traced, or drastically modified the society, and ineligible to perceive that it will last or last, it was verified that the possibility of numerous advances to melhoria das conditions of life of the population. Certainly, the entrepreneurs who administer the business of transporting people in carriages, not starting the XX century, are not satisfied when the car is accessible as a mass transport vehicle. Therefore, a greater part of the population ends up benefiting as an advancement of technology because, invariably, by processes of attempt and error, it ends up producing better results, faster or cheaper than with the techniques used previously.
As a result of technological advancement, the Internet emerged. Since its invention as a communication network that ended with the physical borders of knowledge and interlocution between the population of all the globe’s songs, it promoted a transformation in the form of communication of people.
The sharing of information grows so quickly that data exchange between two points is not enough to feed the momentum of the consumption of information from our society. Or the development of ‘peer-to-peer’1 technologies, based on the non-decentralized sharing of information, broadening the communication horizons. Utilizing this technology, a dice exchange is not given from point A to point B but rather among all the virtual community participants. Ou Seja, each user gives
a network with information, allowing it to work without all points being linked together simultaneously. While everyone owns the information, no one owns it. This technology gave rise to Bitcoin, a currency based on a peer-to-peer network, without central control, encrypted, with rules defined by programming and which cannot have its monetary base, amount of money available, tampered with.
Although society has experimented with innovations in most fields of science and economics itself, since its invention, money has not undergone many disruptions to change the way people use it. The governmental control arrangement over its use, both to guarantee authenticity and standardize the circulating medium, played a fundamental role at the beginning of the development of commerce and consolidated itself as a paradigm today. Friedrich Hayek,2 winners of the Nobel Prize in Economics in 1974, corroborates this assertion but raises the issue of monopolies, such as that of money:
When the money economy was still slowly expanding in the most remote regions, and one of the main problems was teaching numerous individuals the art of making calculations in money (which was not so long ago), then perhaps a single one type of money, easily identifiable, may have been of considerable value. And it could be argued that the exclusive use of a single uniform type of money greatly aided price comparison, and therefore the growth of competition and the market. Likewise, when the authenticity of metallic money could only be proven through a difficult settlement process, for which the common person had neither the necessary skills nor the necessary equipment, it was possible to argue in favour of guaranteeing purity safely. Of coins bearing the imprint of a widely-recognized authority that could only be the government outside the large commercial centers. But today, these initial advantages, which could have served as an excuse for governments to appropriate the exclusive right to issue metallic money, certainly do not outweigh the disadvantages of this system. Its defects are the same as those of all monopolies: we are obliged to consume their products even if they are unsatisfactory, and, above all, such a system prevents the discovery of better methods of satisfying needs that do not concern or do not interest the monopolist.
From there, Bitcoin, considered to be the biggest financial innovation in recent years, could solve monetary problems faced by society, from the creation of money, such as inflation, lack of access to financial services in remote regions and high costs for transactions. These problems mainly affect the poorest population. The popularization of an electronic currency based on a decentralized network and without central control, theoretically, would make it possible to reduce these problems.
This article aims to elucidate both the conceptual part of Bitcoin, addressing the historical, economic and legal aspects and the possible social benefits that currency can bring as a first alternative, based on technology, to traditional state-controlled money.