• TennHedge

Should You Buy Bitcoin?

As the Bitcoin price continues to climb, many newcomers to the world of digital currency are scouring the internet to learn more about the Bitcoin phenomenon and its associated price increases. Perhaps others are simply looking to speculate for the time being, and will learn more about what they are buying at a later date (no shame there, this is actually how I got started into Bitcoin years ago). Whatever the aim, many are asking themselves a simple question: should I buy Bitcoin?

I believe the first place to start for answering the question as to whether someone should buy Bitcoin or not is a concise description of what Bitcoin is in the first place.

TennHedge's one sentence description of Bitcoin is the following: Bitcoin is a digital money that is not issued by nor is under the jurisdiction of a government.

Of course, that is a huge oversimplification, but this description at least gets your foot in the door. Read my blog post below that goes into a bit more detail:


So why does the Bitcoin price continue to climb?

Bitcoin is what's known as a 'sound money,' a currency that is difficult to debase and devalue through issuing more currency. Historically, gold fulfilled the role of sound money, as gold is a durable, scarce element from which coins could be made for transactions.

Bitcoin shares many of the same monetary properties of gold, but with the important distinction of being digital rather than physical, giving Bitcoin the freedom to be sent over the internet in as little as 10 minutes. Bitcoin's ability to be sent quickly over a communications channel is a vast improvement over gold; moreover, think of Bitcoin as being akin to email while gold is like physical letters (an example I garnered from Anthony Pompliano's newsletter). Additionally, Bitcoin transactions are much more easy and less costly to verify than gold transactions.

Bitcoin lives on the Bitcoin network, a global, decentralized web of computers running the Bitcoin open-source software. Bitcoin's monetary policy is virtually impossible to change, as it would require the consensus of the network, the network being the sum of all participants running the Bitcoin software (nodes); furthermore, all participants in Bitcoin have an economic incentive to leave the monetary policy of Bitcoin unchanged, and this incentive grows stronger as the number of participants grows in addition to the Bitcoin price. Unlike government-issued currency which is routinely debased by money printing, there will only ever be 21,000,000 bitcoins; additionally, Bitcoin transactions are not able to be censored or stopped by governments, as Bitcoin is a decentralized peer-to-peer network. For a government to ban Bitcoin and/or stop Bitcoin transactions, it would have to eliminate every computer on the planet running Bitcoin software, which is unlikely.

Bitcoin takes the power of money out of the hands of the political elite and places it back into the hands of the people, allowing the masses to save their money without having to worry about the value of it being debased by money printing and inflation, two evils that usually are exercised without due process or a vote by an individual's representative in government.

Is it too late for someone to buy Bitcoin if they don’t already own any?

Certainly not.

Bitcoin is a money that is designed to hold its value and appreciate over time. Since there will only ever be 21,000,000 bitcoins, it is more likely that the value of purchased Bitcoin on date X is going to be greater than Bitcoin purchased at a later date, Y. This principle has been demonstrated for the entirety of Bitcoin's existence, as it has been the best-performing asset since its inception in 2008.

There is never a bad time to buy Bitcoin, the best time was yesterday, the second best time is today.


You should always consider seeking financial advice from a licensed advisor before making decisions with your money, and you should not consider anything I write as financial advice but merely my opinion. Getting your financial house in order is a prerequisite for Bitcoin saving, in my opinion.

Disclosure: nothing in this article should be considered financial advice and I am not a financial advisor. Do your own research as everything in finance carries risk.