Let’s explore how you can make money simply by holding, when you invest in Bitcoin. It doesn’t matter how you initially acquire your Bitcoin, but once you have it, you’ll greatly benefit by holding on to it.
This is a passive strategy, meaning once you have the Bitcoin in your possession, there’s really no more work to do, all you have to do is make sure your wallets secure. The reason why you’ll make money over time is that because Bitcoin will continually go up in value, the reason it’s going to keep increasing in value is mainly that of its scarcity.
Bitcoin is often referred to as digital gold because it has a lot of the same characteristics as gold, scarcity is one of them.
What does scarcity mean though? It means there’s a limited supply of it, there’s only so many to go around. A limited supply isn’t necessarily a problem, it’s only a problem when there’s a lot of demand. In a situation where you have a growing number of people wanting to get a hold of something in short supply, the value of that thing increases because people are willing to pay more for it to guarantee that they get some.
Gold is scarce because we know there is only so much of it. Some of it we’ve already dug out of the Earth and some of it is still buried. In any case, we know there is only so much of it on the ground and it takes time to dig some more out if there’s a sudden spike in demand.
This is where Bitcoin and gold are very similar.
Like gold, there is only ever going to be so much Bitcoin. Bitcoin has to be mined the same as gold, but Bitcoin is found using digital mining rather than physical mining. In fact, there will only ever be 21 million Bitcoin in existence. Once 21 million Bitcoin have been mined, that’s it, no more can be created.
The same as we can say we can’t create any more gold, once it all has been dug out of the ground. That’s the supply side of things.
The next question is why is the demand for Bitcoin going to keep increasing? The answer to that lies how useful is and to how many people?
Bitcoin solved several huge problems that existed in the world, so it’s only a matter of time before more people discover that it’s the solution to their problem and then they’ll want some too. This cause isn’t intended to explore all the various problems Bitcoin solves. But let’s look at one of them for the purpose of illustrating how Bitcoin will because more valuable the longer you hold onto it.
Bitcoin is the first ever global currency that is not controlled by any bank or government. This makes it superior to regular currencies because it cannot be controlled by anyone. It cannot be faked and it cannot be stolen. Bitcoin also cannot be created at will like regular currencies. Governments often print new money to finance wars, so in that sense, Bitcoin is the currency of peace. Bitcoin is also of the internet age. We can not send photos, songs, videos, documents and messages of all kinds to people on the other side of the world in seconds, just by attaching them to an email.
Bitcoin now enables us to add money to that list. To bring this to a close, there is one obvious question left. If there is ever going to be 21 million Bitcoins, how exactly is that going to be enough for more than 7 billion people.
Well, Bitcoin acts like digital gold, remember? Which means it can be broken into smaller pieces. You can have a 1-kilogram bar on hold or you can break it to one thousand one gram bars, similarly, you can have one whole Bitcoin or you can break each Bitcoin into a hundred million pieces.
So if a single Bitcoin ends up worth 1 million dollars, then the smallest individual piece would be worth about a penny. Get yourself some Bitcoin, make sure it’s stored safely and keep your eye on the price as it makes it’s way to the moon.