10 reasons why you should be buying bitcoins

Introduction

We´ve faced a huge plunge in  Bitcoin price during the last couple of weeks. This plunge was triggered by CTFC´s decision to investigate exchanges on price manipulation. This triggered a price drop to 6,5K with triggered another panic sell that took prices down to almost 6.000U$. After that, prices are beginning to rise.

In this post I will give 10 reason will this is not a worry. On the contrary, you should take advantage of the low price to buy cryptocurrencies because there are a lot of reasons to believe their prices will skyrocket at long price.

I concentrate my analysis on Bitcoin but this also apply´s to the major crypto´s although I don´t quite trust most of the altcoins projects that seems to be only trying to ride the technology train. 

1. Technology is sound:  

The first Bitcoin block was mined on January 3rd, 2009. Since it´s first genesis block there´s been several unsuccessful attacks to the network and wallets. This shows how reliable the technology is. During the last 2 years, we´ve seen hundreds of ICO´s for other altcoins. These new coins promise better technology but most of them are still susceptible to basic attacks such as 51%. There´s still a performance issue to be solved so blockchain based currencies can actually replace centralized currency´s but security is definitely not a concern for investors anymore.

2. Decentralization: 

We´re yet to see the benefits of decentralization. A lot is talked about but most people don quite understand what this means. Decentralization is not only about who holds your asset. The main thing here is no one has control over how much "money" is issued. As issuing new crypto coins depends solely on mining process no government or institution can inject more assets into the market to try to balance (or unbalance) economy.

3. Regulation (or no regulation): 

Regulation has always been a delicate subject for cryptos markets. Due to the decentralized nature being one of it´s biggest appeals,  regulatory restrictions can be daunting for attracting new investors. Fortunately, what we've seen lately is governments displaying a tendency not regulate these assets. 2018 G20 summit has finished with the recommendation to hold back regulatory laws as furder learning is needed before regulation should be proposed (see: g20 and cryptocurrencies baby steps towards regulatory recommendations).  

4. Acceptance increasing: 

Although it's designed to work as a digital money, Bitcoin´s actual usage today is as a payment method. That is what will help it make the transition from a speculative investment to actual digital currency. As companies start accepting it as payment for services and products, people will start seeing it as what it actually is and keep their reserves for future use instead of just holding to sell at a bigger price. Today, It is being used mainly by freelancers but companies from different lines of services such as Wikipedia, Expedia (hotels booking) and Dell are starting to accept BTC as payment\donation(list)

5. Wall Street is surrendering: 

Over the last couple of years, we´ve seen many declarations of Wall Street giant´s declaring BTC a bubble. There were even remarkable declarations such as Warren Buffet saying it´s "Rat poison". Despite the negative public position, it's starting to get clear that they are very aware of Bitcoins potential as a financial asset and some investment groups such as Goldman Sacks have already surrendered and have announced the creation of investment funds with crypto coins.

6. Banks are scared of it: 

Due to the decentralized nature and liberty to perform online transactions of Bitcoins. Major investments banks are adopting conservative aptitudes toward Crypto asset. Under a false pretext of protecting their clients from a very volatile market, they are banning bitcoin purchase operation with their resources. This clearly show´s that banks are very well aware of BTC´s potential to make banking industry obsolete (or at least very less important).  It´s also worth mentioning the importance of the decentralized technology that avoids such intrusion as a bank deciding how you spend your money.

7. The real value:

I´ve been investing in Bitcoin for over a year now. Although I'm a relatively new investor, it´s been clear to me that blockchain technology is revolutionary and will be a game changer in the international economy. Especially for those who sell their services through the internet, crypto coins remove all barriers for payments. In a growing digital society, where there are no frontiers, national currencies are "swimming against the tide". Digital(crypto) currencies are a natural evolution. Right now people mostly see Bitcoin as an investment, with time blockchain will reveal its real value as people eventually start using. At this point I´ll excuse myself for the personal opinion: I believe that even in last years highest price, bitcoin hasn't even come close to its value. Long term we can expect it reaching and stabilizing at prices over 200.000 U$.

8. Extremely volatile: 

Blockchain assets and therefore Bitcoin has still a very speculative nature. People are yet to learn it´s applications and then it will finally find its value and usage will to Bitcoins real purpose. Due to this speculative nature of Bitcoins, prices are extremely volatile, which creates excellent opportunities for trading. If you look at BTC (and other coins) prices over the last years, you´ll see lots of highs and lows. Considering this volatility and all other reasons given above, this current low price represents an excellent opportunity to buy and hold.  

9. Consecutive Hypes:  

After last years Hype, with took prices to almost 20.000U$,  people started to think that the euphoria was and the bubble has finally popped. But the reality is far more optimist, these hypes have been happening since 2010 and proportionally, last years was not even the biggest. In 2011 prices went from 0,30 to 30U$ (10.000%), considerably bigger appreciation then 2017´s 2.400% (from 900 to 20.000U$). and still there where other 2 hypes in 2013. We need to stand clear from the price and look at the percentage of appreciation,  considering how it´s moving we can see that price is behaving naturally for an asset that is still rising. Considering the history can expect a softer hype yet this year and a few new bigger ones over the next 5 years. So, buying now will be perfect for those planning for the long term.

10. Lightning is striking:  

Scalability is currently the major challenge of bitcoin (and blockchain) network. Due to the necessity of building consensus, blockchain networks have not been able to operate with more than 10 transactions per second and this kind of makes it unviable to be substitute centralized payment networks such as visa that operates with thousands of transactions per second.  Not to mention that this makes the cost per transaction too high (0,5U$/transaction), which basically makes it impossible for micropayments. Lightning network is a new technology that will use a secondary peer-to-peer network of smart contracts as an intermediary to bitcoin transactions. These operations are backed up by the main blockchain but happen aside and allows transactions to be faster as there's no need to build consensus on the blockchain before it can be confirmed. Lighting network was released earlier this year and promises to solve scalability problems making bitcoin 100% viable as a payment method and ready to take over the market. For more on this see the video.