Bitcoin is a digital currency that has gained a lot of attention, especially in the last year. In early March of 2017, it finally surpassed the price of gold, and it has since being on the increase, recently hitting an all-time high of $11000.
Well, even if you have not given this cryptocurrency much thought, it’s undeniable that its value growth has been impressive. Its success has lured many people worldwide to invest in the coin, which is another type of insurance in a volatile domain.
Although the nature of this currency does not lend itself to regulation, many people have expressed an interest in making the coin a feasible currency for typical investing options such as exchange-traded fund. A few months ago, we saw a rejection of these initiatives by the SEC which made bitcoin to dip under $1000. However, this setback is merely worth talking about given the coin’s jaw-dropping price point right now.
Well, as with any investment option, there are ups and downs to investing in bitcoin today. Whether it is a viable investment option calls for weighing the pros against the cons.
The Pros of Bitcoin
Ease of Payment
Bitcoin is one of the fastest means transact in the world today. Bitcoin transactions do not involve custom haggling, exchange rates, bank timings or holidays. Some bank transactions take up to five days, but that is not the case with bitcoin. Regardless of your location, you can send and receive bitcoins in a matter of seconds.
Low Transaction Fees
If any, the transaction fees on bitcoins are insignificant. The more the fee, the higher priority it will get on the blockchain network and the quicker the processing will be. Generally, if you want quicker service, the more you have to pay and it is not even that much. There are some services that change bitcoins into various types of currencies, and they also charge relatively less compared to mainstream money transfer companies like PayPal.
When dealing with this digital currency, personal details aren’t required, thus guaranteeing safety. Identity theft is not a risk, and in order to keep your money safe, the blockchain is encoded and backed up with encryption.
Also, any transaction on the public ledger can be seen by both parties. However, no personal information is revealed. These rules and regulations can’t be messed with by anyone, be it a civilian, a large corporation or even the government. The fact that there’s no intervention and no entity can mess with the system makes it a secure way to transact.
Safety from cyber Hacks
No one goes around carrying bitcoins, and so, they obviously cannot be stolen. Bitcoin transactions can’t be reversed, and they do not need personal contact information, thus protecting both the buyer and the seller. Yes, there have been cases of bitcoin theft in the past, but that happened in exchanges, which is like any other website, based online and thus susceptible to hackers. Storing bitcoins in secure wallets, however, eliminates any chance of cyber hack.
Buyers and vendors can ideally work in areas where crime and scams are apparent as it is tough to fool someone when using bitcoins. As mentioned earlier, the blockchain is a public ledger that prevents cyber crimes and fraud.
The Cons of Bitcoin
The bitcoin market is one of the most volatile in the world right now. They are valuable due to their rarity and the demand is always going up. However, this trend is bound to decrease as more and more bitcoins are issued. Also, any significant hit in the market tends to rapidly affect the trend of the coin. An example would be the closing down of Silk Road which resulted in a major downtrend at the time. When it comes to investing in bitcoin, you should put money that you can afford to lose since you can never tell what the future has in store.
Even though bitcoin is the spotlight right now, many individuals are still oblivious to its use. Although there are several companies that have implemented a payment system that accepts bitcoin, they are just a handful. There is still ignorance among laymen regarding the implementation and use of the coin in businesses.
So, is bitcoin a good investment? The value of the coin has been rising, which shows a promising future as more and more people venture into the world of cryptos. However, you can never be certain about the future. So, only invest money you can afford to lose.