Bitcoin is an online digital currency, just like a dollar or a
pound but with a few exceptions. Introduced by Satoshi Nakamoto in 2009,
Bitcoin engages in a peer-to-peer payment system where no
intermediaries exist and goods can be securely transferred between any
two people on the planet. It is associated with a heavy network of
computers and the unit of currency for the Bitcoin system (appropriately
called Bitcoin) can be simply acquired by joining the vast network.
Bitcoin provides a fast cheap and secure transaction alternative but few
are willing to take the jump for it. So the one million dollar question
still lingers, is Bitcoin a secure investment?
Bitcoin is only a
few years old, an interesting creation that has awed many and for the
record, has attained a name in the top financial charts. Its popularity
has spanned and it has led some of the top businesses like Virgin
Galactic to consider it as an acceptable source of payment. Bitcoin
prices increase at rates of up to 10% and continue to dominate as the
alpha of the market and this has made many interested in investing in
it.
Another special feature of Bitcoin is that it does not have a
central bank and neither does a central government control it. It's a
global currency and its creation and existence lies behind a complex and
geeky mathematical algorithm that enables it to shadow government
related mishaps. Cases of political instability and government
absurdities that plunge the economy down to shame and lead years of
investments in a currency down the drain do not occur in the
crypto-currency system. This creates a secure and friendly investment
opportunity with low inflation risks.
The Downside
With
an ever-amazing upside, crypto-currency also has its downs. As
mentioned, this thing is still taking baby steps; and with that comes
great uncertainties. Bitcoin prices are volatile; currently increasing
sharply and can fluctuate at 30% to 40% in a month. The world is still
surprised at its emergence and there exists very few Bitcoin holders and
Bitcoin. This leads to unanswered questions and cold fear among people
as investing in a new unpredictable 'gold mine' can yield devastating
effects. Its newness brings forth lack of regulations and scares off
potential investors.
The enigma surrounding the Bitcoin system is a
major factor to be considered. Anything can happen and everyone
participating in the Bitcoin market is on a high alert. China in
December 2013 eliminated the use of Bitcoin and this led to a drastic
drop to its value from $1240 to $576 in just three weeks. Programmers
also determine the functionality of this global currency and many
question the thought of risking their finances for some group of geeks.
This prevents many from venturing into the system and increases the risk
of Bitcoin investment ever so highly.
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