So, they way I see it, Bitcoin is more like buying gold: its value should be the same, at least, for its entire lifespan. Its value in £ or $ fluctuates only because they are constantly inflating. I did think of investing in gold for the same reason: not to make money but to just make sure I kept the value of what I already have.
How does a man start to dip his toe in this murky world?
Will bitcoin be ravaged by Quantum computing by the end of the decade?
Yes that is basically it. Our current fiat system (pounds, dollars) is fatally flawed because the people in power can print as much as they want out of thin air.
This devalues the currency and causes inflation.
This also causes The Cantillion Effect, where those closes to the money printer get even more rich, as they take the fiat money that is becoming more worthless and buy hard assets that can't be devalued and us plebs are stuck with inflation. You need to protect yourself of this, even if it's just a small investment in a hard asset.
For a long time now Gold has been seen as the best "Store of Value". But this obviously didn't happen overnight. Over time we as a society decided Gold was a store of value.
It is mined out of the ground at around 2% increase a year, so it's inflation rate is just 2%, whilst fiat currencies in time of economic stress or war can be printed at over 10% more currency a year, making it more and more worthless against hard assets/stores of value.
The problems people have with Bitcoin is:
1. They can't physically see it. But we live in a digital world where most of the money we have we can't see (I may carry £50 of bank notes around with me), and Banks are only required to hold around 5% of your money (and loan out/invest the rest).
2. It's volatile. This is just due to it's market cap being far less than Gold. Once it reaches Gold's market cap (5 to 10 years imo) then it will have Gold's volatility.
Bitcoin now has around 1.7% inflation due to the new Bitcoin mined over the next 4 years. Next halving that will be cut to 0.85% then halved again in another four years and so on..
So the supply becomes less. That won't matter if there is no demand.
But Blackrock's recent research shows that 4% of Boomers are invested in it, whilst 84% of millennials/gen-z have some investment in it.
Over the next two decades there will be the biggest transfer of wealth ever seen from Boomers to their kids and grandkids.
So the demand will be there at a time when supply will be grinding to a halt.
Hence, some see Bitcoin as a long term store of value due to it being a harder asset than fiat and also you will a massive supply/demand dynamic in play in years to come.
Some people will never see a use for it, that's fine.
But depending where you live in the world it can be:
1. A long term store of value which protects you against excess money printing.
2. A way to keep money away from corrupt governments who can seize your money or tell banks to withhold your money.
3. A cheaper way to transfer money in 3rd world countries that rely on the likes of Western Union that take a huge fee.
But it's volatility will remain, which is major headache of inexperience investors who have a habit of buying high and selling low.
Which is which Blackrock/Fidelity advise just a small allocation to it.
A small amount will go a long way once compound over a decade or two.
Buying and storing it is still a pain but over the years it will become far more user friendly just as the internet and smartphones have become.
I have no issues buying and storing a very tiny amount on exchanges but there are risks.
Bitcoiners tend to store it on hardware wallets (such as Trezor) but they are not exactly user friendly.
If you want to go down the rabbit hole I would advise lots of YouTube tutorials.
I first learned about Bitcoin in 2012 but wasn't comfortable to invest in it until 2016.
It takes time.
One last thing, like any asset:
Only buy what you are comfortable with. Being able to sleep easy at night is more important.
But never fully sell out.
If you say put 1% of your money into it, once it doubles take out your investment and let the rest ride for a couple of decades,
or keep selling bits every time it doubles. That way you are taking profit but staying in the game.
Oh....Quantum Computing.
There's plans in place against that.
But if QC is invented that break all codes, then we will have bigger things to worry about.
