I’m a complete beginner in cryptocurrency, and I’m making money. Does this mean it is obvious for tech-savvy people to get involved in Bitcoin, Ethereum or other cryptocurrencies? Will Bodansky Follow Nov 16, 2017 · 3 min read

Let me start by making one thing clear, I am a beginner in cryptocurrency. I mean I know more than my grandma for example, and more than most that are not tech-savvy, but in terms of my knowledge compared to other cypto-traders, my knowledge is very limited.

Yes, I know how blockchain works in the sense that it creates decentralised assets, and how specific aspects of the blockchain work via transactional records and the idea of mining to verify those transactions, and rewards those who mine successfully. However, does my limited research (I kid you not, when I started researching I was searching ‘blockchain for dummies’ or ‘how to explain bitcoin to your grandma’ in Google) give me the right to make money by trading in cryptocurrency?

It doesn’t take a lot of research to find out that, for example, with Bitcoin, it acts like any other limited resource in the essence that, as more and more complex mathematical problems are solved (or hash problems), and as more coins are mined, the amount of bitcoins generated is diminishing with time, with the current amount of bitcoins awarded per block being 12.5 (this started at 50). It is estimated that ~21 bitcoins can be eventually mined, and so it is, in essence, a limited resource such as gold.

A limited resource huh? So surely as more and more coins are mined, there are less left to mine, and so scarcity increases. As with any commodity, physical or virtual, an increase in scarcity means an increase in value. So this takes me to the article title, if this is true, then why isn’t everyone investing in bitcoin?

The same goes for Ethereum and other alt coins, although they are not as generally accepted or adopted, and have different functionalities and uses, they follow the same concept. A concept which is based on increased adoption of cryptocurrency, that using it instead of traditional currencies (fiat) will make our lives easier and create an option for using “decentralised currencies” which governments and banks cannot control.

So what’s the downside? Why isn’t everyone getting involved? Is it the fear of hackers? The fear that governments will be able to crack down on it? I entered the space a small time ago, started trading (on a small scale), and am immediately seeing the rewards. As far as I’m aware, there has never been a long-term decrease in value in one of the main coins (I understand most coins are relatively new so there isn’t a lot of historic data to go by, but still). So for those who have knowledge of the phenomenon, or have the opportunity to know about it and invest, should they invest in these digital currencies?