Bitx.co, one of the leading bitcoin exchange platforms, had unexpectedly closed its Malaysian operations.
While it is still possible to transfer existing bitcoins to other wallets (e.g. Singapore platform), this is an interesting development for Malaysia considering the fact that the Securities Commission and the Central Bank had recently shifted gears into fintech space. In addition, Blockchain’s adoption by big banks is proving to be fortuitous timing for the digital currency world.
Yet till this day, few people understand the market they are playing, especially with non-fiat money.
The limit supply
Unlike paper currencies, you cannot increase the supply of Bitcoin. The bitcoin has set a protocol where there will only be a supply of 21 million Bitcoins and individuals have to “mine” blocks of Bitcoin. The easiest way to think of it as obtaining Bitcoins like diamonds from a mine, but it’s not as simple as that.
What makes Bitcoin so great is what most people wish for banks: transparency. Blocks of Bitcoin are mined through solving computer algorithms, almost like rewarding you for solving those additional mathematics problems. The mining can also be costly, using high-processing power and burning your electricity away. 70% of Bitcoin mining comes from China, and they have factories that try to mine 12-25 Bitcoins a day with an $80,000/month electricity bill.
The solved algorithms help the system “regulating” the currency to become harder to exploit, but it is surprisingly not fool proof despite its transparent ledger, as you’ve read through news media about its scandals.
Bitcoin is not the only cryptocurrency
Take a look at coinmarketcap.com:
(and there’s still 95 more cryptocurrencies in the list!)
And you thought you’ve heard them all!
Bitcoin is already nearing its 21 million supply, and yet I can’t seem to find a platform I can fully trust to trade here.
Bitcoin is not a legal tender
Why do banks want to deal with this? It’s not even something they created! Its like a monster experiment on the loose, you think it wouldn’t wreck havoc until you realized that half the village is infected by some strange bite and the sheriff has to find some way to deal with this.
Bitcoin is a disruptor to the financial industry, and no one likes to give in to disruptors until its too late. Uber is already causing problems to the taxi industry, and people are already trading Bitcoin for years. It’s at $770.07 = 1 BTC, and the demand is increasing especially with Trump’s election.
So again, why would you invest in Bitcoin?
Bitcoin can be a long-term investment for the future. As we learn in economics, the more limited the supply, the higher the demand. The Bitcoin market is extremely volatile despite many seeing it as a safe haven. It is an “undervalued” market that can be explored, so long you have trusted sites you can depend on.