Using Bitcoin to accumulate wealth is a path anybody can take regardless of their location. Bitcoin is borderless, meaning anyone can purchase it. This digital currency has existed for over a decade now and many people use it as a payment method, while others see it as an asset.
Today, many digital platforms allow people to purchase Bitcoin using fiat money. After that, you can hold onto your cryptocurrency or sell it. Ideally, the internet has countless platforms and tools for trading Bitcoin. For instance, Ethereum Trader allows people to purchase Bitcoin online quickly. This website takes different payment methods for fiat money and the ethereum-trader.app is one of the many sites that investors could explore if interested in Bitcoin.
Nevertheless, you must understand Bitcoin trading to profit from your venture. For some people, making a profit means earning more pounds or dollars. However, things are different with this cryptocurrency. A Bitcoin trader can claim to have made a profit if their total Satoshi count increases. If Bitcoin replaces fiat money, the number of Bitcoins a person will have will determine their worth. And most people see Bitcoin as the correct account unit, not the down-trending dollar. Here’s why trading this virtual currency is a lucrative venture.
The Network Effect
Currently, Bitcoin is the most used and accepted cryptocurrency. And this enables it to enjoy the network effect. Many people want to invest or trade Bitcoin due to its extensive user base. Most investors view Bitcoin as digital gold. However, people still use it as digital cash.
Essentially, most people invest and trade Bitcoin, believing that its value will increase over the years due to its limited supply. Ideally, humans will never have more than 21 million Bitcoins. Central banks can decide to print more fiat currencies, lowering their value. However, Bitcoin’s production depends on miners who follow the network’s protocol. Thus, Bitcoin’s scarcity will continue to increase its value over the years.
If you purchase Bitcoin today, the chances are that you will sell it at a higher price in the next few years. And the continuously increasing cost of this cryptocurrency despite its volatility attests to this argument.
In a free market, buyers’ and sellers’ interactions determine prices for services and goods. Nobody interferes or controls price determination in a free market. Instead, demand and supply forces determine the value of a commodity. And that’s how the Bitcoin market works.
Bitcoin operates in a free market as a digital asset, meaning demand and supply forces determine its price. This cryptocurrency’s price increases when more individuals want to purchase it. If more people decide to sell their tokens, the price drops.
Trading this virtual currency on crypto exchanges is a profitable venture due to its volatility. Bitcoin’s value can change rapidly, allowing traders to make significant profits if they correctly predict the market’s direction.
High-Power Processors Don’t Dominate the Marketplaces
High-performance processors dominate the traditional marketplaces. That’s because computers use them to boost their processing power. But Bitcoin mining changes the narrative by introducing specialized chips that dominate the industry. For instance, miners use ASICs instead of advanced GPUs and CPUs to mine this cryptocurrency.
Successful Bitcoin mining and generation of new tokens require potent processors. That way, the machine can solve math puzzles quickly without overheating even when under pressure. Boosting computing efficiency entails hashing at a faster speed. However, this could generate more heat lowering the computer’s performance. That’s why Bitcoin mining people with ASICs can benefit from Bitcoin mining.
But the market decides whether miners require powerful chips by increasing the price of the mined tokens. If miners use powerful computers, they may not find people to buy Bitcoins at their preferred prices.
Bitcoin trading is a lucrative venture for a person willing to risk a volatile market. Nevertheless, Bitcoin’s meteoric rise shows that the trend could continue until miners produce all the 21 million tokens. Thus, buying or owning Bitcoin now could earn you significant returns if you sell your digital coins in the future.
Disclosure: This article is for entertainment and educational purposes only. I am not a financial advisor and you should always do your own research and consult a qualified financial advisor before making big decisions with your money as capital may be at risk.