You might have heard that Bitcoin’s value has recently dropped quite dramatically. What does that mean for Bitcoin investors? Is it time to back out? Should you worry about the drop and stop thinking about investing into Bitcoin and blockchain?
On the contrary! In fact, the recent Bitcoin drop might prove to be positive for potential investors. Don’t believe us? Well, let us explain!
Remember when everyone predicted the end of the cryptocurrency market back in Winter of 2017, when the price of Bitcoin and other currencies suddenly dropped? Well, you might also remember that the prices of most of the cryptocurrencies managed to climb back up after the slump, reaching even over $10.000 in case of Bitcoin.
Most importantly, those savvy investors, who bought crypto-assets at that time, have seen their fortunes multiply during the course of the year.
It is a basic rule of investment - buy low, sell high. Now that Bitcoin is at a low point price-wise, it’s a good time to buy - and wait for the price to climb back up.
Read more: Tips on investing in Bitcoin and other cryptocurrencies.
If you are interested in mining cryptocurrency instead of buying it on an exchange, we have some good news.
As you may know, cryptocurrency is mined by solving complicated cryptographic problems. Those are of course computed by computers - they are much too difficult to be efficiently solved by a human.
Read more: How the technology behind cryptocurrencies works.
So, you might think that getting a stronger device with better computing power will increase the speed at which you can mine cryptocurrency. And while in principle that’s right, in practice the more supercomputers mine a currency, the more difficult those cryptographic problems get.
Since the rate at which new cryptocurrency is created has to be more or less stable, the difficulty of the tasks that have to be completed to be able to mine a Bitcoin is adjusted to the computing power of everyone involved.
Now, where is the good news? Well, due to the Bitcoin price drop, some of the miners have decided to stop mining it. Perhaps it’s just a temporary decision, and they will get back to it as soon as the prices go up again. But in the meantime, the cryptographic problems that have to be solved have been adjusted - and lowered!
What does that mean for you? It means that you can use your computer much more efficiently to mine Bitcoin. You will need much less resources and energy to do that than you would have if you mined a couple months ago!
While cryptocurrencies are a great invention and have the potential to change the world, there are many more potential applications of the technology that could be revolutionary.
From reducing bribery to eradicating election fraud, blockchain can make our world better in many ways - but a lot of investors tend to focus on its most mainstream application.
The drop of Bitcoin value might scare some investors off - but that does not mean you should stop investing in blockchain! In fact, now is the time to invest in organisations and start-ups that develop the technology in fields other than finance. The temporary drop in the cryptocurrency-related hype creates a chance for them to gain more traction, and you definitely don’t want to miss out on the blockchain revolution!
Read more: How will blockchain change the world?
To sum up - while the price of Bitcoin has dropped in November and December of 2018, this is not a reason to panic. As Bitcoin is currently less expensive than before, it is a good time to invest in it - and in other blockchain-related technologies. You could even try your hand at mining the cryptocurrency if you’re so inclined. It is now easier than ever to get into the market - and you should not miss your chance!