Wonder if you have to invest in Bitcoin? If you are already around the child of financial news lately, you must have heard of a meteoric increase in the world’s most famous cryptocurrency.
And if you are like many people about now, you might be wondering, “Bitcoin – yes or no?”
Should you invest? Is this a good choice? And after all Bitcoin?
Well, it’s some of the things you have to know about Bitcoin before investing. Also note that this article is only for information purposes and should not be taken as a financial suggestion.
What is Bitcoin?
Bitcoin is known as Cryptocurrency or Digital Currency. This is basically money online. Like any currency, you can exchange it with other currencies (like saying, buying Bitcoin with US dollars or vice versa) and it fluctuates with respect to other currencies too.
Unlike other currencies are decentralized, meaning that there is no one central bank, the state or government responsible for it. And that means it is not vulnerable to the government or mismanagement of the central bank.
# 1 easy to send money
Because it is decentralized, this also means that you can send Bitcoin friends (money) on the other side of the world in seconds without having to go through the bank intermediary (and pay banking fees).
This fact just makes Bitcoin very popular. Instead of waiting for wire transfers that can take days, you can send payments in seconds or minutes.
Limited supply # 2
There are only 21 million Bitcoin to be mined. This limits the number of Bitcoin which can be produced. It’s like say the government cannot print money because there is a limited bill inventory – and they will not print again.
When there is a supply set, your purchasing power is preserved and the currency is immune to inflation that runs away.
This limited supply also helps contribute to the increase in Bitcoin prices. People do not want currency that can be printed – or increase – becomes infinite at the time of the greedy government setback.
# 3 Personal
Most people think that Bitcoin is truly anonymous. But actually it’s not anonymous – this is more personal. All Bitcoin transactions that have been made can be seen in Blockchain – public Bitcoin public books.
But your name and the identification detail behind the transaction is not visible. Each transaction is linked to the address – a series of text and characters. So while people might see your address – there is no way to connect that address to you.
Many people don’t like their banks spy on them (or tell them how much their own money they can or cannot move), really like this privacy feature.
# 4 cheaper to transact
Many businesses have to take a visa or mastercard lately to stay competitive. But these cards take some rather substantial costs of each sales transaction.
But a trader who accepts Bitcoin does not pay this massive fee – so it puts more money in their pockets.
So it’s a few main Bitcoin pro. How about cons?
Cons of Bitcoin.
# 1 fluctuate in price
Bitcoin is famous for going up slowly for months – and then falls 20 – 50% for several days.
Therefore it is traded 24 hours a day 7 days a week, the price always fluctuates. And all that took over bad news – like news about MT Gox hack a few years ago – to send prices to fall down.
So basically it’s unstable – and there are many unknown out there that can affect prices. The rules here are this: Don’t put money into Bitcoin that you can’t get rid of it.
# 2 slows the speed of the transaction
Bitcoin began to experience problems with slower transaction speeds and higher transaction costs. Other Cryptocurrency has come faster and cheaper.
Miners Bitcoin is working on trouble. But until this problem is resolved, you can expect the price to be very volatile.