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A few days ago newly elected US senator, Cynthia Lummis, endorsed Bitcoin on live television. She spoke very highly of the cryptocurrency, even revealing she had a sizable investment herself. Jack Dorsey, the well-known founder of Twitter and CEO of Square, believes in Bitcoin enough to have invested 1% of his company’s value into the cryptocurrency while changing his Twitter bio to a single word: Bitcoin.
The question I hear most often these days: “If senators and tech billionaires are talking about it, should I still get into cryptocurrency, or are all the big gains gone?”.
You are not too late. Bitcoin’s entire market capitalization still only stands at around $300 billion. That number might seem high but compared to gold, which has been the de facto anti-inflation store of value of the global economy, it really isn’t. Gold’s global market cap is around $8 trillion and considering JP Morgan recently affirmed that Bitcoin has “considerable upsides” compared to gold. As a result, we have not seen the end of Bitcoin’s meteoric rise.
If you want to get into crypto’s next big thing before it truly goes mainstream, I would recommend something that has not made a lot of noise in the general public but is considered by many in the cryptosphere as the biggest thing since Bitcoin itself: Decentralized Finance (DeFi).
Related: What Entrepreneurs Can Learn From Square’s $50 Million Bitcoin Investment
What is decentralized finance?
Bitcoin (and Ethereum shortly thereafter) is the original decentralized finance because nobody controls its issuance. There is no one organization responsible for deciding who holds what. No one is in charge because everyone is in charge. There is a publicly available ledger held on a multitude of nodes and computers on a global network which makes it impossible for any central authority to move Bitcoins. Additionally, there is a limited number of Bitcoins to mine. No one will ever be able to add more of the celebrated cryptocurrency to this total, as the Federal reserve is doing right now with the US dollar.
However, most Bitcoins are bought and sold on exchanges, and these exchanges are often privately owned. For the general public it’s simply a lot easier to log onto a website, such as Coinbase, Binance or Kraken, and let them hold your cryptocurrency. PayPal recently announced they would allow their users to buy and sell cryptocurrency on their app which will bring in their 314 million customers to this exciting market. These companies will hold the keys to their customers Bitcoins for them.
There is a very well-known saying in the cryptosphere: “Not your keys, not your Bitcoins”. This is cautionary advice from an industry which has been burned many times. If there is one thing that…
Read more:Everything You Need To Know About Cryptocurrency’s Next Big Thing: Decentralized