People including me and others might keep wondering why Bitcoin keeps going up in value. Today, we are going to understand the basics of Bitcoin Mining.
As I said earlier, if we look at the growth chart of Bitcoin over the last 10 years,
The price has been increasing consistently and it keeps going upwards. Now you might ask why is that happening ?
Let me answer you doubts one by one,
Bitcoin essentially has one of the most crucial property of Gold, it’s limited in supply. What I mean here is that, with every passing day it keeps getting more and more scarce in supply. From my experience, I have been looking at bitcoin since last 1 year. During this covid pandemic, it’s value dropped like other assets but it didn’t take too long for Bitcoin to regain it’s original price.
Bitcoin Halving !
As I said earlier, new bitcoins are introduced in the system by mining blocks. When a miner successfully mines a block, he/she gets a reward for doing so in Bitcoin. Essentially, mining a block means that person keeps on verifying the transactions happening in Bitcoin Ledger. The reward the person get’s keeps on decreasing every 4 years. So, less bitcoins means less supply and a pump in it’s price !
I have been an investor in Bitcoin since last 1 year and from my own experience I can say that if you have a long term goal, Bitcoin might not be that risky. For people who want to make quick money, you can try your luck but probably, you would end up loosing a bunch of money.
Still, I come across people who believe that Bitcoin is a scam. Being honest, I have never heard once the government to say it’s a scam. What happened in 2018 is that the RBI asked the Indian Banks to stop dealing with the exchanges operating in Cryptocurrency. That news alone led people to believe that Bitcoin is a scam, but it’s not so.
Now you guy’s might have a question in your mind, how much shall I invest in Bitcoin?
To answer your question, I would say never put too much of your wealth in it. As of now, the cryptocurrency market is at the very starting stage and no one knows where it will go in future. It might be possible for Bitcoin to hit $1 Million per coin or $0 per coin, the later seems a bit difficult but we can’t deny the possibility. My job being a part of WazirX Warriors is to educate you about Bitcoin and not to sell it to you. The amount you invest depends entirely upto you but don’t get carried away to an extent that you have to sell your home for loosing money. You understood the point right ?
To know more about Bitcoin Mining, you can watch our video in Hindi below.