From $100 to $75 Million: Is Bitcoin a good investment?

What's up you guys, it's Graham here. So, if you've looked at the internet in the last few days, I'm sure you've seen an article out there that says if you had bought $100 of Bitcoin 7 years ago, you would have over $75 million today. Bitcoin is a topic that people get so opinionated and so heated over. People either love it or they [ __ ] hate it, and they think it's the worst thing ever. I am somewhere right in the middle. I mean, I don't really have a preference for or against Bitcoin, so I'm going to be sharing my thoughts and my unbiased opinion on whether or not Bitcoin could be a good investment.

So, if you guys don't know what Bitcoins are, seriously go to Google, look it up, because it's some really interesting stuff. But essentially, Bitcoins are a cryptocurrency that was created in 2009, and they're earned by computers that solve these like really intense algorithmic codes. When the computer deciphers a certain string of code, it's rewarded in the form of Bitcoin, which is the payment. Some of the value of Bitcoin is partially derived from the fact that there are only a finite amount of them that could ever be mined. Essentially, there are 21 million Bitcoins out there, and once they're all mined, they're all gone. That's very similar to the US dollar, by the way, when it was backed by the gold standard because there's only a certain amount of gold that can be mined from the earth.

What I find pretty interesting too about Bitcoins is that the more Bitcoins you mine, the harder it becomes to mine the next ones. Essentially, the codes just get longer and more intense for computers to solve, which means it becomes a lot more time-consuming and labor-intensive to mine more Bitcoins. So, the first million Bitcoins out there are going to be easier than the next million Bitcoins, which are going to be easier than the next million Bitcoins. The more Bitcoins that are in existence means the algorithms become progressively harder and harder to solve, which means it just becomes way more labor-intensive to mine more Bitcoins. The harder it becomes and the more labor-intensive it becomes, the more people have to charge for the value of the Bitcoin because the more time they spent on it.

Okay, so we get all of that, but does Bitcoin actually have any like real value? My answer is somewhat like a yes and somewhat a no. Somewhat a yes because people put their real time and their real resources and money into mining Bitcoins because they can ask for such a value where it makes sense. If people are spending a lot of time and a lot of money mining for these things, they need some sort of return on investment. If these Bitcoins were selling at 3 cents a Bitcoin, it wouldn't make sense for any of these mining facilities to ever be in existence. However, if it's trading at $11,000, $1,500,000 of Bitcoin, it definitely makes sense for people to invest a lot of time and a lot of resources mining for Bitcoins.

So, yes, there is some type of value for what people are willing to invest mining for these things. Plus, the more retailers, the more people who are willing to embrace and accept Bitcoin, the higher the price will be because people feel more confident in it. There's also a bit more demand and perceived value over scarcity, the fact that there's only 21 million of these things that are ever going to be mined. Therefore, people aren't going to be worried about like another 20 million Bitcoins coming into existence or anything dealing with like inflation by putting in more Bitcoins.

In that respect, I mean, there is a little bit more value there. This isn't much different from the US dollar, where we give $1 the value of $1 because everyone associates that as being worth $1. Except $1 of US currency is somewhat subject to government manipulation, inflation, and regulation. Now, while the US dollar isn't backed by gold anymore, it is backed by our entire US economy, everything it produces, with laws that we have to abide by that are regulated by the government. Now, for better or for worse, the US dollar doesn't have its entire value just because we give it value; it has a very strong foundation backed by an income and product-producing nation.

Now, Bitcoin, on the other hand, doesn't really produce anything. Its value is merely what we, the people, associate it with and, of course, the benefits of having a decentralized currency without regulation. Now, with Bitcoin, there is no long-standing country behind it. It doesn't produce anything, and it doesn't supply anything. This is one of the main differences I see between Bitcoin and the US dollar. But on the other hand, Bitcoin does have its advantages because it's not subject to any sort of government control or manipulation, and it's completely decentralized. It's also totally anonymous, and of course, you don't have to pay any of those nasty foreign transaction fees.

However, there are no refunds. It's not like you can charge something on a credit card and then dispute it later on. With Bitcoin, it's just as good as cash. Once you give the other person money, it's up to them to refund you or give any of that back to you. There's also very little regulation. If you have your Bitcoins hacked or stolen from you, then that's it.

Alright, so we get all of that, but is Bitcoin actually a good investment? See, my biggest concern is that until Bitcoin's usage starts driving the price more than speculation does, it's going to be very hard for me to ever call this an investment. I call it speculation instead, and there's nothing wrong with calling this speculation. There's nothing good or bad with speculating anything for that matter. A lot of people speculate real estate; they speculate penny stocks, and Bitcoin can be one of them.

But Bitcoin is so volatile right now, and that's why I call it speculation. Obviously, this is a very high-risk, high-reward strategy. If you invest or you speculate in Bitcoin, obviously the payout could be huge, or you could lose a significant portion of your money. See, I wouldn't ever recommend substituting a long-term proven investment strategy with Bitcoin. I think Bitcoin definitely has its place. If you want to speculate on something, go ahead with Bitcoin on money that you could afford to lose or you could afford to gamble with, knowing that there's a chance that you can lose a significant portion of your money. If you're okay with that and you can afford the losses, you could afford the swings, and you could just ride it out to see what happens, then by all means, maybe Bitcoin is a good investment for you.

But if this is something you're thinking like, "Okay, when I'm 50 years old I want to retire off something," I'd be very hesitant to ever recommend Bitcoin as a sound investment.

Now, going a little bit off topic here, but I personally believe that Bitcoin will be around for the foreseeable future. From what I've noticed here that I find pretty interesting is that usually people in economic turmoil go to gold and precious metals because it's always been the safe haven of investing. That no matter what happens, if stocks go down, usually gold goes up. If inflation shoots up, gold goes up as well.

But for what I've noticed, a lot of younger people, instead of going for gold, they're going for Bitcoin. The less faith they have in the US economy or their nation's economy or in currency at all, for example, instead of going for gold, which has been the previous safe haven investment, they're going for Bitcoin. So, my prediction is that Bitcoin will probably be around for quite some time.

Realistically, it will be around for quite some time, but I see this as almost being something that will eventually at some point in the future follow the lines very closely with gold in that, like I said, if there's any economic turmoil or people are hesitant about the market, people will turn to cryptocurrencies or specifically Bitcoin for their safe haven investment. It'll just be seen as not something to speculate and like triple your money in a week, but it'll be seen as something eventually, way down the line, as a safe haven for people to put their money.

Now, this is wild because I would never do this. Now, there's no chance in [ __ ] hell I'm ever putting my money in Bitcoin as a safe haven investment. I'm talking if this thing is around for like 20 or 30 years from now. Now, if YouTube is even going two or 30 years from now, and by that time I would be like 50-something years old; plus, by the time this is all happening. But like, this is my wild future prediction. If this ever happens, that's what I think it will go to if Bitcoin survives that long, and by that time too its value will be driven more so by trading than it will be by speculation.

And that's the problem with it right now is that it's being so heavily speculated that I don't see it as a solid investment right now. Like I said, if you're cool with speculating something, Bitcoin could be fun, but don't do it with any money that you can't afford to lose, and Bitcoin should not replace a long-term retirement investing strategy. Bitcoin is exactly that; it's just speculation. So, you have to treat it along the same lines as you would any other sort of speculation trading.

So, as always you guys, thank you so much for watching. I don't usually touch on topics of like Bitcoin and stuff like that, but I've seen so much coverage and so many people talking about it lately that I thought I may as well just add my own perspective on it. Now, some of you guys, I'm sure, are way more knowledgeable and opinionated than I am about this. So, if you are, comment down below. Let me know your thoughts and your perspectives. I'm totally open to reading everyone's thoughts, and maybe I learned something from it as well; who knows?

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