Bitcoin took Warren Buffett to the cleaners last year.

In fact, forget last year — Bitcoin has beaten the billionaire investor two years in a row!

Don't believe me? Let me show you.

Investors in Warren Buffett's company Berkshire Hathaway (NYSE: BRK.A) faced a 12% loss in 2015. In the same time period, Bitcoin made investors 34% gains.

In 2016, Bitcoin did it again, doubling its value with gains of 122%. Meanwhile, Berkshire Hathaway made investors a mediocre 25%.

Perhaps calling 25% gains mediocre is a bit harsh, but it's important to point out that Bitcoin more than doubled that number.

And the digital currency isn't slowing down.

Since the start of 2017, Bitcoin has made investors gains upward of 360%.

That means more companies than Berkshire are feeling the Bitcoin burn.

This has many billionaire investors who initially rejected Bitcoin experiencing a change of heart.

Just look at Mark Cuban. Cuban, who previously stated that Bitcoin was a bubble, just announced that he plans on investing in digital currency.

But for those who are still squeamish about Bitcoin, there are other ways to profit from the $66 billion empire the token has created.

In fact, if you choose to invest in Bitcoin through "picks and shovels" technology, you could be looking at gains similar to those seen by early investors in Intel.

Intel was trading at $0.11 a share until the PC took off. After the PC launched, the stock reached a high of $74. That's a gain of 67,272%.

Today Bitcoin — and the process that creates it — has positioned one small company to experience the same massive growth.

I'm going to talk more about that investment in a minute. But first, let's close the door on Bitcoin.

You see, there is a reason Bitcoin is outperforming some of the most powerful companies in the world. Bitcoin possesses unique traits that make it unlike any other investment.

That said, even though investors don't need to know the "nitty gritty" details of Bitcoin to make profits, knowing a few facts can help them understand why Bitcoin is revolutionary.

The Rise of the People's Currency

Perhaps you're just starting to learn about digital currencies like Bitcoin.

If so, it may surprise you that before Bitcoin was a $4,200 investment, it was an unknown moon-shot worth $0.008.

But that didn't last long. Bitcoin's value surged because the digital token possesses three unique traits that make it superior to the fiat currencies we deal with in our modern financial systems. And this caused people to take notice.

These traits include:

Bitcoin is Autonomous: It allows individuals to exchange money without relying on banks or governments.

It allows individuals to exchange money without relying on banks or governments. Bitcoin is Secure: Bitcoin operates on a technology called blockchain. The blockchain records all transactions, protecting from fraud.

Bitcoin operates on a technology called blockchain. The blockchain records all transactions, protecting from fraud. Bitcoin is Finite: Bitcoin is created through a regulated mining process. There can never be more than 21 million bitcoins in existence. That means Bitcoin is safe from hyperinflation.

But why does Bitcoin have these traits? Good question.

Bitcoin has all these traits because it was proposed as an alternative to fiat currencies.

Bitcoin's creator, Satoshi Nakamoto, introduced Bitcoin to the world in 2008 through an online white paper.

In that white paper, Nakamoto outlined that Bitcoin would act as a "peer-to-peer" transaction system, effectively eliminating the need for banks or government currencies.

Because Bitcoin is decentralized, it can help remedy many of the issues that plague our modern financial system, from hyperinflation to high transaction fees.

The idea was novel. And it instantly attracted a following of people committed to Bitcoin's long-term success.

Since those early days, Bitcoin has grown to become a massive economic force and one of the most valuable investments of all time.

And that is a path on which it will likely continue.

In fact, analysts think we are just now seeing the tip of Bitcoin's long-term potential.

Top venture capitalist Tim Draper believes we will see a $10,000 bitcoin by 2018.

And that is all very exciting. But for many investors, one large question remains unanswered: Where in the world does Bitcoin come from?

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Where Bitcoin Comes From

At this point, I am going to get a bit into the "picks and shovels" investment I mentioned above.

I explained that Bitcoin doesn't need banks or governments to operate.

That is because the Bitcoin network is regulated through a process called "Bitcoin mining."

In order for bitcoins to be produced, a "Bitcoin miner" must confirm transactions that take place on the Bitcoin network. Transactions are grouped into something called a "block" and presented to miners as a puzzle.

Miners must use specific hardware and software to solve these algorithms.

For miners, Bitcoin mining used to be incredibly lucrative. Many people made small fortunes mining bitcoins in the currency's early stages.

Sadly, this is no longer the case. As more bitcoins are dispersed into the world, the algorithms miners must solve become harder. In 2017, an individual miner will spend more money for the electricity running his computer than he would make mining bitcoins.

That is why Bitcoin mining has taken a different form. Now, many bitcoins are mined in massive factories sequestered to the countryside. These factories are filled with so many pieces of machinery that the collective hum is deafening.

And that is where the one technology investment I want to talk about steps in.

The company I am talking about makes specialized hardware needed to operate large Bitcoin mining operations.

If you are interested in learning more about this "picks and shovels" Bitcoin investment, click here to view our presentation.

Alexandra Perry



@AlexandraPerryC on Twitter

Alexandra Perry is a contributing analyst for Wealth Daily and Energy and Capital. She has multiple years of experience working with startup companies, primarily focusing on artificial intelligence, cybersecurity, alternative energy, and biotech. Her take on investing is simple: a new age of investor can make monumental returns by investing in emerging industries and foundational startup ventures.