What you should know before investing in Bitcoins

What you should know before investing in Bitcoins

Have you ever wondered how money works? Money, yes, that great little factor that governs many of our life’s decisions. We have all been educated to make money the backbone of our projects and, never more literally, the currency that regulates our interactions with the world. But how much do you know about how it works?

Money has three functions

  • Serve as a means of change: for this, it must be commonly accepted, generate trust, and be unalterable.
  • Unit of value: establishes the value of goods and services s (that which we know as the price ).
  • Deposit of value: when it is not spent, it can be accumulated to be used in the future. That is, you can save

Who regulates money?

The central bank of each country. This is the institution that is in charge of issuing the money that circulates legally and establishes the rules of use (what experts call monetary policy). An important detail is that it is a public and autonomous institution, independent of the government of the country to which it belongs. It is the central bank that sets interest rates, controls inflation, and provides liquidity to commercial banks. That is to say, it sets the rules and instruments of that game that we all play called the Economy.

What if one day someone no longer wanted to play by the rules of the economy and decided to create their own currency?

That was in fact what happened in 2008, when Satoshi Nakamoto (it is not known if he is a person, a group of people, or nobody in particular because he has not made public appearances) published a text in a crypto mailing list, in which this new currency and its operating rules were proposed. He called this currency Bitcoin (BTC).


Forbes magazine describes it as the first decentralized digital currency. In other words, it is a currency (such as the euro, the peso, or the dollar) that uses encryption technology that creates a public and verifiable database of the transactions carried out with it. It is called decentralized because it is not regulated by any government or by any Central Bank. All transactions with BTCs are carried out on the network and its use has spread worldwide.

Who is transacting with Bitcoins?

Since the end of 2017, the most popular cryptocurrency (because it is not the only one) has sounded strongly in the media and although almost all of us have heard of them, the number of users scattered around the world, although it is counted by millions, it does not yet constitute a major majority.

According to a study jointly conducted by SurveyMonkey and the Global Blockchain Business Council, 60% of Americans have heard about cryptocurrencies, but only 5% of people surveyed have a portfolio of BTCs. Most are male, white, between the ages of 18 and 34.

Why do these people decide to invest in Bitcoin?

According to the cited study, these are the three reasons why thousands of people are investing in cryptocurrencies:

They trust the government less than cryptocurrencies.
Some see them as protection against traditional asset crises.
They see it as an investment, as the most optimistic think that by 2030 a BTC will be worth around $ 500,000 (today its value is approximate $ 11,200).
In the beginning, transactions with BTCs were related to low-priced items, but nowadays transactions for real estate have been carried out. In Mexico, companies such as Gandhi, 7 eleven and Café Punta del Cielo, have been encouraged to enter this new trend. Globally, platforms like Airbnb and Amazon have done the same.

Bitcoins Advantages

Its scope is worldwide.
There are no intermediaries: Transactions are made directly from person to person. This allows the expenses generated by the transactions to be minimal.
Its cryptographic system makes falsification or duplication impossible.
The transactions are irreversible and are kept in history.
When you make a transaction you don’t need to reveal your identity, thus preserving your privacy.
As there are no intermediaries, the money belongs to you completely and cannot be intervened by anyone, nor can your accounts be frozen.
The market never stops. It is negotiated 24 hours a day, 365 days a year.

Disadvantages of Bitcoins

By maintaining anonymity in transactions, bitcoins have been linked to illegal movements such as drug acquisition and money laundering.
BTCS is not yet a socially accepted means of payment.
Being a decentralized currency, its value lies in the agreements that people make and the trust they place in such agreements. Therefore, it is a highly volatile currency.
Someone who is not familiar with the use of applications and networks would hardly understand the platforms with which cryptocurrencies move.
If you were to lose bitcoins for making a mistake in the transaction, there is no way for you to recover them, as they have no official endorsement.
There is still time to know what the destination of digital currencies will be. Before investing, our recommendation will always be that you consult with experts since before the news it is common for excess enthusiasm to cloud our criteria. Finally, remember that the safest investment is on earth. It will not disappear and your assets, well invested in it, will multiply.


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