There is a likelihood that you’ve heard of the term Bitcoin but you do not have a clear idea of what it really is. In simple terms, Bitcoin is the same as any other currency, only that it’s in digital form. Bitcoin was created in 2009 by an anonymous person nicknamed Satoshi Nakamoto. Bitcoin is a decentralized, peer-to-peer digital currency system designed to give online users the ability to carry out secure transactions without the existence of intermediaries.
This crypto-currency is mined on a sophisticated network of computers running specialized software. You can acquire a unit of this currency by joining the network of users. Bitcoin stands out from traditional currency systems as it provides a secure transaction alternative. However, due to the uncertainties associated with Bitcoin, most people are reluctant to give it a try.
So, is it safe to invest in Bitcoin or is it just a gamble? This is the question everyone is asking themselves these days.
Bitcoin is a relatively new digital currency that has gained prominence due to its convenience. Since its introduction in 2009, Bitcoin has continued to gain prominence in the financial markets. Its ever growing popularity has prompted established businesses such as Virgin Galactic to accept payments in the form of bitcoins. The currency has been steadily increasing in value at rates of up to 10 % and it’s currently considered as the best known digital currencies around. This has attracted many potential investors.
Unlike other forms of currency like the Dollar and Pound, Bitcoin is a global currency that purely lies on solving increasingly difficult mathematical formula.
The most unique thing about bitcoin is that it creates a secure and friendly investment opportunity with low inflation risks. Unlike conventional currencies, it does not get affected by political instability and government absurdities.
Much as there advantages of Bitcoin, the digital currency system has a few cons. First, Bitcoin is not yet an established currency like the Dollar or the Pound. Therefore, this makes it unfeasible to completely rely on Bitcoins as a currency. Secondly, the value of bitcoins is constantly fluctuating according to demand. Bitcoins have not been widely accepted as a form of currency and as a result, there are very few Bitcoin holders and Bitcoin in the financial market. While there is the good side of it, the many loopholes discourage people from investing in Bitcoin. Since it’s not established and has no central authority governing it , no one can guarantee it’s minimum valuation and this scares off potential investors.
Before making a decision to invest in Bitcoin, one needs to consider the mystery associated with the Bitcoin system. The volatility of the Bitcoin necessitates that anyone dealing in Bitcoin needs to be extremely careful about their moves. In December 2013, China banned the use of Bitcoin, something which led to a serious devaluation of the Bitcoin from $1240 to $576 in only three weeks.
The interference of programmers with the Bitcoin system is also a major concern among potential investors. This scares away potential investors and tremendously increases the risk of investing in Bitcoin.