Demystifying Bitcoins for beginners:

1) It is a digital currency - unlike hard cash, you can't feel it.

2) Hard cash is printed by governments via their central banks. Bitcoins are obtained via a process called mining (i.e they use computing power to uncover Bitcoins)

3) Now you see: governments across the world are literally "printing" more and more money. Their debt keeps on going up every year. This deflates the value of your existing cash. So yeah, the problem is real!

4) Bitcoin supporters believe that #3 sucks and we should rather put our faith in a currency that is "decentralised" (i.e it does not give the power to any individual/organisation to make such manipulative moves)

5) However, there are several challenges.

6) The foremost being that no country in the world would want to lose its power (ie. Sovereignty). This is the reason why several countries ban/continue to ban Bitcoin.

7) Right now, Bitcoins are used by a very small fraction of the world's population. Hence, it can be manipulated easily (ie. it is speculative). For eg. if Elon buys Bitcoin, the price of Bitcoins explode!!! (if he decides to dump it tomorrow, it will go down).

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Should you invest?

Consider it like a penny stock: either it will go big or it will tank!

Investing in Bitcoin is like investing in a startup.

Once you buy into the idea of Cryptocurrencies (i.e "validate"), you need to ride the wave.

As an early adopter in the Crypto world, you will go through the crests and troughs of this volatile journey.

Questioning why you got onto this journey every time there is a dip would only stress you out.

Here are three important things you should know:

1) Monitoring your Bitcoin investment everyday is a recipe for heart attack. You are investing in this asset for the long-term.

2) You don't 'make' a loss, unless you 'book' a loss. So when Bitcoin falls by 40%, you are not making a loss of 40%.

3) Even the most promising startups go bust. Bitcoin too can. No one, including Musk knows this.

Lesson: if you are looking for quick gains, you must be able to take quick losses as well :)

Credits: Akshat Shrivastava