Bitcoin is one of the many digital currencies there is on the market, but it has several advantages above others in that it's the first cryptocurrency to emerge and also the highest in terms of market capitalization.
Also, it is one of the fastest-growing digital currencies in the world. It's become so popular, especially among investors. In 2020, the bitcoin price rose well above $10 000. However, it's volatile as the prices keep rising and falling, hence making it subject to increased surveillance. That said, should you invest in Bitcoin? Let's find out.
Is bitcoin worth investing in?
Ten years after programmer Satoshi Nakamoto conceived the idea of Bitcoin, it's become an effective electronic cash system with several others joining in. With bitcoin, users can carry out anonymous transactions that are not taxable. Also, it doesn't depend on a centralized monetary system.
Bitcoins are kept in digital wallets, from where individuals can transfer these bitcoins to their bitcoin wallets and other people. Once the transfer has been made to another user, a broadcast message is sent within the private network, a move that alerts each node in the network. Next, the system then applies the transaction to each person's ledger copy and updates their wallet.
There is also Bitcoin mining, this refers to the method by which new bitcoins are developed and thereafter verified. Users can also buy bitcoin cash with a credit card.
Blockchain on its part keeps a record of every transaction in an open list, these records are then kept safe using cryptography. The blockchain system allows every user to see each other's transactions, that way the authenticity of each transaction will not be questioned.
The transparency of transactions makes it difficult for fraudsters to manipulate the system e.g., copying bitcoins that are not theirs or spending bitcoins that are not theirs either. Blockchain technology can safeguard transactions using codes and mathematical equations, so if a cybercriminal were to try to hack the blockchain, they would have the whole network to contend with.
Bitcoin holds a lot of promises for the future—it is predicted to be a long-term dependable source of value. It's easy to set up an account, and easy to learn how to invest in bitcoin. Also, individuals hoping to buy bitcoins can do so via mediums.
First, you can go through brokers or you could go with the second option which is to invest in Bitcoin exchange sites. You will have to pay a transaction fee but this is no more than 0.2%. Bitcoin is likely to be the future legal tender for purchasing goods and services. Already, we see an increasing number of organizations accepting bitcoins as a means of payment. Examples of such companies include Expedia and Windows.
However, while it might seem all glamorous and nice, Bitcoin is quite a tricky investment. Many experts aren't certain Bitcoin is a solid and long-lasting investment vehicle, with its price constantly fluctuating and with little information for proper analysis to be made, it's difficult to tell if it's an authentic and genuine investment plan. Hence, many people who are into Bitcoin are investing blindly as they do not have enough information about trading parties.
Bitcoin for all we know is relatively new on the scene and is misunderstood, the prices keep changing (fluctuating more like) as more businesses, organizations, and consumers use it. For instance, the value of Bitcoin increased massively when banks in South Korea tried out the technology. On the other hand, the value of Bitcoin dropped when the Chinese government announced that companies were banned from raising funds using IOC (initial coin offerings).
There has become a need for Bitcoin and other cryptocurrencies to be regulated as without established guidelines, it's likely not to stand the test of time. And with the prices of Bitcoin being so unstable, it may be difficult to make permanent and serious plans concerning the digital currency.
Also, it's worth noting that if a rival digital currency manages to overtake Bitcoin, then its value will drop drastically. Already, many competitors are giving Bitcoin a run for their money, this includes Ripple and Ethereum.
Bitcoin is faced with lots of threats to its survival and several outcomes could cause its value to drop. But then, the future could prove bright for the cryptocurrency market as already several start-ups are creating debit cards that help users spend their digital currency. And this is likely to increase as time goes by.
Globally, the demand for digital currencies including Bitcoin is increasing and many individuals now invest in bitcoin. It could prove to be a savior in times of economic uncertainties as it isn't backed by the government and even if the world's economy were to encounter a disaster, it wouldn't affect the value of Bitcoins. It's become a universally accepted digital currency in the world.
While its history and origin are cloaked in mystery (for instance, no one knows all about its founder Satoshi Nakamoto), it's proven to be the most influential digital currency ever created.