- Bitcoin’s biggest differentiator is the fact it is a decentralized digital currency, it cannot be regulated or controlled by the government. Bitcoin is traded online via a public ledger known as a blockchain, which is transparent and cannot be manipulated by Central Banks or any other regulatory authority.
Article by Ntokozo Nkambule
Is Bitcoin the one that got away? Well, at least for some of us who never invested in crypto-currency, it might just be the case. But again, is it a fad as most financial commentators have publicly warned against any form of involvement in the asset class. Fad or not, if you had made a E1000 investment in Bitcoin in 2011, you would be a millionaire today. In June 2011, the price of one Bitcoin was only $32 (E500). This means E1000 would purchase you two bitcoins. At the time of compiling this article, one Bitcoin was worth more than $42,000 (E630 000). Your total return today would be over E1, 2 million, provided you did not sell.
So what is Bitcoin? Well, people have come up with many definitions. It has been defined as a digital currency, some prefer to call it a store of value, and other believe that it is a hedge against inflation. According to Investopedia an online financial news website, Bitcoin is virtual or digital currency/digital money that was created in 2009. The identity of the person who created it remains unknown. Bitcoin’s white paper notes that it follows on the ideas of mysterious and pseudonymous Satoshi Nakamoto. Its biggest differentiator is the fact that it is decentralized, meaning that it is not owned or regulated by government. Bitcoin and other cryptocurrencies are traded online through a public ledger called a blockchain. A blockchain is close to impossible to hack and allows for the identities of traders to remain anonymous.
Bitcoin is open for investment to anyone in the world through cryptocurrency exchanges, which are synonymous to traditional stock exchanges. This means that you can invest in Bitcoin through an American crypto exchange while you are in the Kingdom of Eswatini, as long as you can provide KYC documents. Investors can also sell their crypto anytime; there is no need for a broker, and crypto exchanges operate 24 hours a day. It is also very important to clarify that there are thousands of other cryptocurrencies currently in circulation. Bitcoin only happens to be the number one by market capitalization. There are a number of reputable companies in the world that have added Bitcoin to their balance sheet, one of them being KPMG Canada.
The Central Bank of Eswatini has come to state that those that invest in bitcoin and other cryptocurrencies, should exercise caution as this asset class is highly volatile. The CBE has acknowledged that it cannot stop EmaSwati from investing in cryptocurrencies as they are digital by nature.
*Please note that this is not investment advice, but is only for information and education purposes.
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