Should You Think about Investing in Bitcoin?
Many have seen how the value of bitcoin has rose exponentially but only a few have an idea about it. However, the government and media have given attention to crypto currencies or digital money and this has resulted in getting everyone’s attention as well. It has quickly gained acceptance because it makes quicker and cheaper transactions that are secured by cryptography and each transaction has its own signature or private key.
Due to its rise in popularity and value, everyone wants to join in and there are two main ways make money with bitcoin. You can either purchase the coin as an investment hopeful that its value grows or you can become a bitcoin miner. During bitcoin mining, any transaction that took place will be verified over the network by miners using complex algorithms and they will receive fees and /or newly minted bitcoins as reward.
From an investing point of view, it is seen to have a big risk/reward factor as the currency is relatively new. Additionally, it does not have inherent value, which leads to volatility and big price changes. However, a vast amount of money is invested into this and more companies sign in to utilize this currency, so there is no idea when the value will return to zero.
Bitcoin miners have a big risk/reward factor because of the many changes during mining and it has become more difficult. In the beginning, a bitcoin miner can mine through an ordinary laptop or home computer. However, more people are already mining that the level of difficulty has risen in addition to the power need to mine. A maximum amount of 21 million can be minted and when you get closer to it, you obtain smaller and smaller amount of bitcoin being rewarded for each successful mine. That is why miners who want to earn more profit need to invest in complicated and high tech mining rigs, but there is still no guarantee that they will be profitable or they can get their costs back.
There is a third preference and this is safer compared to the two. In case of something suddenly happens that promises riches, the most lucrative venture is to sell the tool that helps to produce these riches. In mining for bitcoin, you require mining rigs or powerful graphic cards to make a significant profit. However, barely a few miners have the luxury to prefer this option.
As more and more people move towards the riches, many scam artists are in the lookout as well for their next victim. It helps to watch the bitcoin market, read articles, browse the forums and research your costs and ROI ahead of taking into consideration investing in bitcoin. Do this ahead of putting in some money as the market is very volatile and the investment is even riskier.