A very common question people ask is whether or not it is too late to get involved with Bitcoin. Seeing that it has gone from almost no value (or literally zero, in the very early days) to a current price of $3,300+ each has many feeling that the ship has already left. But the truth may just surprise you.
Bitcoin is Still Early in Its Infancy
With extreme growth as of the last couple years, it may just surprise you that Bitcoin is still an infant in the technology world. We still haven't realized its full potential, and likely won't for many years. While its price has gone parabolic, the simple fact is that if you're just now getting involved, you are still an early adopter. For proof of this, ask around how many even know what Bitcoin is. Few will have even heard the word, and fewer than that will have a small idea of what it is. But with it growing at a phenomenal pace, this should be a sign: if you're already involved and have a strong understanding of how it works and what it is, you're ahead of the masses.
New Blockchain Companies Arise Daily
There are tons of new blockchain-based companies popping up daily. Some are using existing infrastructure, such as making Bitcoin easier to understand or use, or just giving more uses to the coin. Others are building on to it, bringing about new cryptocurrencies that have completely different directions. For example, Ethereum is built with smart contracts (and some other coins have adopted similar systems since then) that allow for decentralized and impartial contractual releases of funds based upon specific criteria being fulfilled. This could be as simple as allowing people to trade currencies without a middleman or allowing for bets on things like sports games or other things. The possibilities with these are still being realized at this point, with more ideas popping up daily.
Potential Growth
Many high-profile people have given their estimates of what Bitcoin will eventually be worth. Some claim it will go to $1m+ per coin, while others think that $50k+ is a realistic value. While I won't attempt to put a value on it (though I will say that due to inflation, it has continued to grow over time), there is one thing for certain: there are still a lot of things that could spike its pricing overnight. Getting ETFs going, for example, would allow institutional investors to get involved. For example, take these two for example:
- .SPY (S&P 500 Index) market cap: $245 billion
- .Bitcoin (as of this writing): $55 billion
Just that one index alone is worth almost 5x Bitcoin's entire market cap. Swapping places, that would put Bitcoin at around $15k each. And that's one ETF out of the hundreds, not to mention other places people store funds. Plus this only includes the U.S., as opposed to Bitcoin, which encompasses the entire world. The potential there is massive.
The Risks
While things probably look like a perfect scenario here, they are far from it. While Bitcoin definitely has its potential upside ahead of it, it's still in very, very risky territory. It's seen drops of 90% in the past and there is no guarantee that it will ever bounce back. It could go higher or it could drop to nothing — or something unexpected could happen and it drop to zero overnight.
Essentially, Bitcoin is a type of high-risk, high-reward situation, and it should be treated as such. If you choose to get involved, absolutely do not risk what you can not afford to see disappear into thin air. Just to name some of the risks:
- Regulatory pressures
- Network hack (51% hash rate attack, SHA-256 crack, etc.)
- Middleman or personal hack (wallet stolen, funds stolen, etc.)
That said, there is one thing for certain: the blockchain has revolutionized the Internet and how we view decentralization. It has opened the door for things we never thought possible, and the next few years and decades will show things we can't even imagine right now. If nothing else, follow along with it and learn what it's bringing to the table. You might just find yourself surprised by its potential!