In this day and age, we are always seeking the best place to invest our money or indeed keep it safe from economic events that could devalue it.
But essentially money is nothing more than what we agree on as a means to exchange one good for another. Yet, in our entire history, we have seen one asset as a form of exchange that has always gone up in value and stood the means of time.
Gold has proven decade after decade to be an excellent example of a store of value, the paper currency you hold in your hand, the fiat money that serves no other purpose but to provide confidence in the value of something and that can be printed many times over by those who control it, has always, and we do mean always, going to zero!
So what exactly is money?
Money can be categorised as the following:
- A medium of exchange and unit of account.
- Fungible (it can be exchanged)
- A store of VALUE
Now the paper money of today may fall into many of these classes, but if the central bank decides to issue a new currency, like what happened when Europe introduced the Euro, many countries and their people lost a value of wealth they had originally accumulated in their old currencies. So can the fiat money in your pocket be considered money if there is no store of value?
The simple answer is no, the bigger question today is if bitcoin can be considered money of the future?
So let’s address that, by looking at how bitcoin may compare to gold in a digital age.
Bitcoin can surely share a lot of the points that would closely relate it to a store of value of gold, in the sense that the number of units of bitcoin is limited, the network is decentralized enough to be independent as well as secure and can be used to hold or transfer.
One of the most important key aspects of this as a consideration to money is that all around the world the agreed-upon value can be settled without any intermediary party. For you to truly understand what that means we must refer to the central banks, and let’s think of them as a shop. The central bank’s product is currency, and at any point in time, that currency’s price can be changed by the store owner (the bank).
We can assume that there is a level of value in the digital currency based on what we have outlined here, so let’s then say you would want to get a hold of bitcoin and essentially start using it as a means of trading or even simply funding a trading account and how to go about it.
Cryptocurrencies like bitcoin can be found on exchanges such as Coinbase, Bittrex or Kraken. Although to hold bitcoin you, of course, will need a wallet which can be found through multiple options but largely the exchanges provide you with one that you can easily use to exchange for other cryptocurrencies, make purchases or transfers. To purchase bitcoin all you need to do is simply create an account with one of the exchanges and after you have logged in and verified your account you can proceed to exchange your local currency for bitcoin at the market rate, be sure to check the price of bitcoin across all the exchanges though as some may offer a better price than the other.
Here is what it would look like:
Step 1) Sign up to the exchange
Step 2) You will be asked for your email to be verified as well as your phone number to ensure that your account is protected
Step 3) After verifying your Account Select the Funding tab and you’ll be taken to an overview of your funding options and activity. The page will look like this:
You have the option of depositing fiat currency and/or digital assets/cryptocurrencies.
To deposit, simply click the “Deposit”-button for any of the assets and follow the instructions.
So once you own bitcoin, you may decide to start investing a portion of it to grow the value of the original amount you invested in. This will allow you to accumulate more of the cryptocurrency over time without the cost of purchasing.
One way to invest in this market is by using your IQ Option trading account, and yes the good news is you do not have to go through the hassle of exchanging your bitcoin as you can simply transfer the amount you decide to invest from your holding wallet to your IQ Option account. If you do not have an IQ Option account, visit the link down below to get yourself an account within minutes to test out this method.
For any help setting up your account and understanding the platform you can see our article covering this HERE
Once you have created your IQ Option account, all you need to do is go ahead and select a deposit, and this will bring you to this page where you can select the amount you want to deposit. Then on the right, there is a drop-down menu that will give you a variety of deposit methods, in this case, we would like to use the Bitcoin option.
The menu should then look like this with your desired amount.
We then click on proceed to payment and this will take us to the wallet function
The next menu will look like this, now if you have never used a wallet before this may seem a bit complicated but it’s actually really simple. The code in the box is an address unique to you and created for you to send your bitcoin.
Above you can see the details of the transaction based on the dollar amount and how many bitcoins this amount reflects and will be deducted from your wallet
And that’s it, it’s that simple. No need to fish around for IBANs or swifts for international transactions and banking fees just one quick code generated for you and the transaction is done.
Hopefully, this has been insightful and we have delivered a level of understanding about bitcoin and what we could expect in the future as a viable consideration of money. It is important to always diversify your portfolio but if bitcoin is any indication of the new digital age of gold, white gold will always hold its value, bitcoin may only be at the start of its journey and those you can accumulate it over time may be thankful in the end that they do if we see fiat currencies begin to collapse worldwide due to the level of national debts held by countries that will never be able to be paid off