This type of “trading” is not very much different from the trading done by the seller of goods that you can bring home. The only BIG DIFFERENCE is you do not bring home anything. You either make a profit or you don’t. You can play a long game, or you can put in your money and take it out after a short period of time – give or take a week.
Investments trading is the selling of “Hoping to make a profit” – based on the observation that an enterprise has the capacity to earn a profit, and that you can share in their profits by putting in money. This type of trading exists due to the “Capitalist” framework that underlies our trading activities or economy. This is called Stock Trading.
The more money is placed on a given investment, the cheaper the investment becomes. Just like the sari-sari store. But as time moves on, there is a possibility that the investment could earn big – meaning the company where the money got invested, did well (or very well) so that the company could share profits at the end of their business year. But there are companies who also lose value, right after investments are made. Many companies have gone through this cycle of failure. The loss in value could be attributed to change in laws, or the presence of a much better technology offered by another enterprise. Investing on Stocks needs a lot of information about the economy. Policies being proposed and crafted by various governments, and current events. Plus the foreign currency exchange values.
The selling of Goods is considered “simple” economics by many entrepreneurs. This is the 1+1=2. The selling of investments in the stock market is about x2 + y2 = c2. Getting into the Bitcoin and the Foreign Exchange game is where H2O comes in. You do not have to understand what H2O really stand for to be able to take a bath and brush your teeth! But when you use water to power a boiler for an industrial plant, you need to really understand what that H2O means, or else your boiler or plant could end up as scrap soon.
Bitcoin trading can be simplified for anyone on the street. But this cannot be easily simplified into the sari-sari store or stock market model. This trading or wealth making platform is governed by rules that are not as simple as anyone can ever know. Not that it is unknowable. You just have to understand how it works. If you cannot grasp how sari-sari stores or banana cue stands make money, uhmmm – bitcoin trading can turn into a nightmare for you.
The bitcoin trading platform was created by an entity name Satoshi Nakamoto to show to programmers and sophisticated internet users that the money you hold in your hands, can be replicated on the internet, without government regulation and control. The bitcoin platform was created to symbolize transactions on the internet that goes beyond national borders, bypassing currency valuations and banks. To make bitcoin trading work, a record of such transactions had to be kept. This transaction record is known as a “block chain.” At the start, a bit coin was worthless – because there were only very few who knew about it. But when interest grew, the bitcoin value started to grow. Indeed the value of a bitcoin grew to dramatic values in 2016 to 2017 (US$19,000) only to collapse when 2018 came. As more internet based enterprises like IBM, Google, Uber and Facebook started to adapt to the bitcoin platform, the value started to rise again. This week the Bitcoin value broke the US$9,200; not even half of the December 2017 peak value.
Since the value of One Bitcoin is Big – P483,000 plus. Bitcoin traders use smaller values to bring in “investors”. A bitcoin can be divided into 0.00000001 parts. (Yes, that is seven 0’s before the 1) or One hundred Millionth of a bitcoin or a Satoshi Unit.
This is roughly equal to P0.0049. So selling Satoshi Units become affordable for most people. 1,000 Satoshi Units is equal to P4.9 Selling 10,000 Satoshi Units is equal to P490.00. Selling 10,000 Satoshi Units for P500 will give the seller a P10.00 gain.
Selling 20,000 Satoshi units will give the seller a P20.00 gain. The P10.00 gain is the seller’s service fee for letting you into the Bitcoin game.