Asking yourself if you should invest in Bitcoin? If you’ve been around any kid of financial information lately, you’ve no doubt heard about the particular meteoric rise in the world’s many well-known cryptocurrency.
And if you’re just like a lot of people right about now, you’re most likely wondering, “Bitcoin – yes or no? ”
Should you invest? Is it a good option? And what the heck is Bitcoin anyway?
Well here’s a few things should know about Bitcoin before you spend. Also note that this article is for details purposes only and should not be accepted as any kind of financial advice.
What is Bitcoin?
Bitcoin is known as a cryptocurrency or a digital currency. It’s basically online cash. Like any currency you can exchange it for other currencies (like state, buy bitcoins with US dollars or even vice versa) and it fluctuates in relation to other currencies as well.
Unlike various other currencies however it is decentralized, meaning there isn’t any one central bank, nation or government in charge of it. And that means it’s not as susceptible to authorities or central bank mismanagement.
Advantages of Bitcoin
#1 Easy To Send Money
Because it’s decentralized, this too means that you can send a friend Bitcoin (money) on the other side of the world within seconds without having to go through a financial institution intermediary (and pay the financial fees).
This fact alone can make Bitcoin very popular. Instead of waiting for the wire transfer which can take times, you can send your payment in seconds or minutes.
#2 Restricted Supply
There are only 21 million Bitcoins that will ever be mined. This limits the amount of Bitcoin that can ever be produced. This is such as saying a government cannot print money because there is a limited supply of bills – and they won’t print anymore.
When there is a set supply your buying power is preserved and the foreign currency is immune to runaway pumpiing.
This limited supply has also helped to contribute to the rise in the cost of Bitcoin. People don’t want a foreign currency that can be printed – or inflated – into infinity at the impulse of a greedy government.
Most people think that Bitcoin is completely unknown. But actually it’s not anonymous : it’s more private. All Bitcoin transactions ever made can be seen on the Blockchain – the public Bitcoin ledger.
But your name and identifying details behind the transaction are not seen. Each transaction is linked to an tackle – a string of textual content and characters. So while people might see your address – there is no way to link that address to you.
Many people who don’t like their banks spying on them (or telling them how much of their own money that they can or aren’t move), really like this privacy feature.
#4 Cheaper to Transact
Numerous businesses have to take Visa or MasterCard these days to stay competitive. However these cards take some rather significant fees out of each sales transaction.
But a merchant who accepts Bitcoin doesn’t pay these big fees – so it puts more money in their pockets.
So those are some of the main pros of Bitcoins.
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How about the cons?
Cons of Bitcoin
#1 Risky – Price Variances
Bitcoin is famous for rising slowly more than months – and then falling twenty – 50% over a couple of days.
Since it’s being traded 24 hours a day 7 days a week, the price is always fluctuating. And everything it takes it some bad news – like the news of the Mt Gox hack a few years ago — to send the price tumbling down.
Therefore basically it’s not stable – and there are a lot of unknowns out there that can affect the price. The rule here is this particular: don’t put any money into Bitcoin that you can’t afford to lose.
#2 Slowing Transaction Speeds
Bitcoin can be starting to run into problems with slower transaction speeds and higher transaction costs. Other cryptocurrencies have come along which are faster and cheaper.
The Bitcoin miners are working on the problem. However until these issues are resolved, you could expect the price to be extremely volatile.
#3 Bitcoin Transactions Not Reversible
As opposed to a credit card charge, Bitcoin transactions aren’t reversible. So if you send Bitcoin towards the wrong address – you can’t have it back.
Also, there are a lot of tales through people who have lost their Bitcoin budget address (through hacking, phones theft, virus-infected computers, etc . ) and they’ve completely lost their cash. There’s no way to get them back.
Because of this, you really need to know what you’re doing and take the time to research how to buy and shop your coins properly if you want to invest in Bitcoins – or any other cryptocurrency.
So those are some of the things to consider just before investing in Bitcoin. Basically while Bitcoin has a lot of great things opting for it – and while it has the to change financial transactions as we know this – there is still a lot of risk. There are a lot of unknowns out there still.
If you do decide to buy, take your time and research your options. May buy from just any seller. Many of them are trustworthy and run an excellent business. But there are others which will overcharge you and may not even deliver your own coins.
Be safe and do your research first. Find a trusted seller having a stellar reputation – there are numerous of them out there. And remember the golden rule here – never commit more than you can afford to lose.