Bitcoin! (Part 1)

Hey guys, how’s it going!

Tick tock, tick tock – hey what’s that?

It’s the clock counting down to the festive season!

Yay! Can’t WAIT.

Last week of work for me coming up before a couple of weeks off – definitely need the break as everything’s a million miles an hour right now. Christmas will be a God-send (Ho Ho Ho).

MrsFrugalSamurai-to-be is working throughout so we’ve decided to stay local. But that’s OK! Most of our friends are staying local this year as well, should be good to catch up with good food, good wine and good times.

Following on from the last post regarding our wedding planning journey to date – I’ve had a number of you messaging me well wishes and some friendly advice, so very much appreciated guys!

In particular, my friend JB – “Hey TheFrugalSamurai, why don’t you just invest in bitcoin – you’d easily afford your wedding then?”

Bitcoin eh…

(cue time travel music, screen fade to black)

I first heard about bitcoin back in 2011 – at the time one of our high school friends was extremely bullish on this foreign concept called “bitcoin”.

“WTF is bitcoin?” 2011 me asked him.

“It’s digital currency, pretty cool because it will take over the world”

“HUH? How?” 

“Easy, it will be the only currency of the future, everyone and everything will be connected and using this payment source”.

“Ha Ha ha, yeah OK Keanu Reeves, The Matrix is a movie mate, don’t be a whacko smacko.” 

(fast forward to present day)

Fact is though – back in 2011 the price of 1 bitcoin was sitting around 1USD.

Now in Dec 2017, just shy of USD20,000.

To put that in context – if you and your partner decided to spend a night in and spent that $100 movie + dinner money on buying some bitcoin, that $100 would turn into $2m.

Uh… say what? Did you say $2m?

So I’m sure my friend is having the last laugh on all of us (side note – no one’s seen him in YEARS, but then again none of us have been to the Cayman Islands).

Admittedly, I’ve been following the bitcoin market on and off for the last year or so, trying to understand and trying to determine whether it is an investment worth making.

My conclusion?

I’m still scratching my head.

Why?

Wait, let’s take a step back for a moment and try to answer some basic questions.

Firstly, what is bitcoin?

Bitcoin is a form of digital currency whereby transactions are viewed and verified across every machine on the network. There’s no government oversight or regulations – everyone sees what’s going on with everyone else. Transparency yo.

It was created by someone under the pseudonym of Satoshi Nakamoto in 2009. No one knows who he/she/it is – but rest assured, it’s not me.

How is this possible? 

By using a peer-to-peer network called “blockchain technology” – essentially it’s a journal of every single transaction ever made.

If a transaction occurs, every machine on the network verifies that the transaction has happened and the coin is exchanged to the new owner.

Once you become a bitcoin owner, you become part of the network.

Where can I find some bitcoin?

Two ways mainly – through online exchanges (normal buy and sell) or through bitcoin mining.

The former is way easier as the latter now relies on superior specialist data “miner” PC’s.

However these miners are the ones that inject supply into the system as apparently, due to the way the bitcoin source code was created, only 21 million units of bitcoin can be created, ever.

Have I lost you yet?

However the way I look at it is, there’s a new form of currency which doesn’t require physical money to be handed over during transactions.

There’s no government involvement whatsoever – the people can view and verify each and every transaction.

A financial utopia of transparency.

So how come you haven’t jumped on the train yet TheFrugalSamurai?

A number of reasons… which I’ll divulge in the coming posts!

What do you think? Did you enjoy this post? Please help me out if you enjoyed this and click on the little “follow” button at the bottom right and be a follower! Thank you greatly!

P.S. Full Disclaimer – all my posts are my own opinions, they should not be relied upon as fact, unless you count the fact that I’m a really really ridiculously good-looking blogger.