Bitcoin is considered the market leader among 1, 384 cryptocurrencies that currently circulate. The Bitcoin’s market value rises and falls all the time dropping from more than US$19, 850 in three months ago to only US$14, 000 recently. A still nameless person with the alias of Satoshi Nakamoto invented this crypto asset in 2009. Bitcoin’s beginnings remain quite unclear until this very moment. Yet, it is a very highly popular but controversial financial tool. Besides, many people still do not understand this crypto asset and its advantages.
Bitcoin, the first-ever decentralized, distributed, and coded (through one-way cryptography) digital currency achieved another phenomenal benchmark this December after its market price went more than US$10, 000. This cryptocurrency relies on the public blockchain platform that will not change provided no one controls over 50% of the network’s computing power. No bureaucracy or central bank maintains authority over the Bitcoin compared to traditional bank notes.
The electronic coin with the acronym of BTC ensures quick, safe, and economical user to consumer payments. The process does not require third-party mediation (intervention of banks) and centralized payment structures. Methodical transactions take place directly between the end-users virtual portfolios that an innovative technology called Blockchain verifies. A secret personal key signs the transactions to confirm the orders originated from the portfolio owners.
Why the BITCOIN or BTC?
People can purchase products or certain services such as consumer items, video games, cars, gift cards, and many others. Buyers remain unidentified for their protection. Besides, global remittances remain hassle-free and inexpensive since no government regulates the BTC. Small business owners would prefer this electronic asset due to the absence of credit card charges. Other people acquire the coins as investments because of the high value notwithstanding issues like volatility in the international marketplace.
Digital entrepreneurs mine these virtual coins using computers with sophisticated software by solving convoluted mathematical problems. Mining creates Bitcoins with winning miners getting 12.5 coins very ten minutes. This compensation answers for the use of electricity and network maintenance. The extraction procedure involves numerous individuals as well as cryptocurrency companies globally.
Said system produces additional tokens automatically and self-regulates the speed to ascertain nobody breaks the rules. It also accelerates the creation of coins with massive investments in mining hardware. The fee to build blocks will slow down reportedly in 2020 and still lose speed every four years until it reaches the ceiling of 21 million coins.
How to Acquire the Cryptocurrency?
Interested buyers can bet Bitcoins from reputable digital currency exchanges that enable consumers to trade the BTC using various fiat currencies. Among the top facilities include Coinbase.com, Bitfinex, and Bitstamp. However, users must stay alert because of potential security risks. For instance, hackers stole millions of dollars from Bitfinex in 2016. Another BTC mining firm lost around US$64 million in December of last year to cyber criminals. Consumers can remit these tokens to one another through computers or mobile applications just like sending money via electronic means.
Bitcoin owners keep their assets in digital hardware that exists in the user’s personal computer or the cloud. Developers also built hardware and paper wallets. In principle, this virtual purse resembles a bank account. No government agency provides insurance cover for these crypto wallets. Watch out for Issues such as hacking, unintentional erasure of funds, and computer malware or viruses. While the public ledger documents transactions, it never discloses the identities of buyers and vendors. The registry only reveals the digital wallet IDs which remains as the major reason many syndicates use Bitcoin for their illegal activities.
Crypto Experts Speak on Crypto Investments
According to Forbes.com, many financial system experts advise against investing in crypto currencies for three major reasons.
- Extreme Volatility
- Bubble Value
- Lack of Purpose
Logic dictates these factors as unmistakable hazard symptoms. Ironically, Bitcoin surpasses all other stock market or asset people would have gladly put in their money. Cryptocurrency supporters dismiss the claims of financial institutions as part of a concerted effort to undermine the phenomenal Bitcoin. These people say the remarkable Blockchain platform symbolizes a very disruptive threat to traditional business models.
All over the world, governments have adopted conflicting positions on virtual currencies. Countries like Japan, Australia, Canada, the United States, and the European Union generally took a more positive approach towards the BTC. On the contrary, Russia, China, Vietnam, Ecuador, Bangladesh, and others enforced restrictions or even banned digital currencies. However, continuing efforts to weaken the Bitcoin seemed to push it more towards secrecy instead of eliminating the virtual asset.
Meanwhile, an article from Fortune.com described how the Bitcoin tries to entice investors with massive returns and turns off others with equally great risks. Notwithstanding its unstable nature, Bitcoin’s recent boom caused some middle-of-the-road financial entities to take advantage of the situation. Only last November, the Chicago Mercantile Exchange (CME) Group (the biggest American futures and options exchange corporation globally) revealed its plan to offer BTC futures before 2017 ends. This move provides the cryptocurrency reliability along with a system for building ETFs or Exchange-Traded Funds.
According to Time.com, investors considered the CME’s public declaration as a healthy sign of the cryptocurrency. Introducing futures in the Bitcoin universe also enhances its solidity and market liquidity. Reports also mentioned that the NASDAQ Stock Market and Cantor Fitzgerald financial services company have plans to establish BTC futures exchanges.
To Invest or Not to Invest in BTC
The naysayers assert that Bitcoin’s value can plunge overnight if another technology similar to Blockchain surfaces. Forbes.com also suggested that quantum computing can threaten the Bitcoin as more robust and sophisticated computers can decipher the code that secures this cryptocurrency. Incidentally quantum technology also has the capacity to disrupt conventional banking systems.
Some monetary gurus warn the unschooled investor or entrepreneur not to put their funds on any asset that seems ambiguous to them. Read online articles about the Blockchain, virtual currencies, Bitcoin, and the Distributed Ledger System. Do additional research by talking to individuals with interests in the crypto industry. In fact, the 200 percent upsurge in value of the BTC makes it so inviting as an investment vehicle but unpredictability can adversely affect the currency.
You can compare the Bitcoin to a lottery ticket that cost one dollar with a $1 million roll-over prize. Skeptics choose to describe the cryptocurrency as a gamble rather than an investment. Invest for as long as you can take the loss with the odds of wasting your resources higher than bringing in revenues. Potential investors must also take into account the security issues as well and not just volatility of this bubble asset. Bitcoin as well as other virtual currencies frequently experience risks of fraud, hacking, and other challenges compared to the usual investments. The present value and price of Bitcoin depends to a certain extent on the belief of some people that it will continue growing as the prevalent cryptocurrency all over the world.
Nonetheless, the currency comprises only ½ of the entire crypto market financing as more digital currencies continue to come out in the open. Until now, Ethereum stands as the main competitor to Bitcoin with net worth of US$440 per coin.
The Fundamentals of Purchasing the BTC
You must learn how to buy the Bitcoin. The process of buying this crypto coin seems complicated but it has turned out much easier since many entities both in the United States and other countries worldwide have become engrossed with buying and selling Bitcoin. Many virtual coin brokers such as the well-known Coinbase that operates from San Francisco, California and services other nations sells the cryptocurrency at a mark-up of just about 1% of the prevailing market price.
The electronic currency is attracting more and more investors providing another rare opportunity for investing in this novel crypto asset. Then again, consumers, institutions, and bureaucracies still need more time to fully appreciate the currency’s nature and benefits before they will finally embrace the Bitcoin and its counterparts. The next question is where how to acquire these coins?
Buying the Bitcoin cryptocurrency depends on the country where the possible investor resides. The more economies provide more alternatives and liquidity. Again, Coinbase is the biggest and most stable broker of this digital tender specifically in countries such as the United States, the United Kingdom, Canada, Singapore, and many European countries. However, you need to be wary because of the proliferation of cyber criminals who may try to steal your Bitcoins.
The Future of Bitcoin
Despite the progress and the hype, the virtual asset’s future remains uncertain because of regulation issues and the financial community’s aversion to this crypto fad. Nevertheless, some countries like Japan, the United States, Canada, Estonia, Denmark, South Korea, the Netherlands, and Australia already accepted the cryptocurrency. Some others like Ecuador, Bolivia, Nepal, and Morocco banned the BTC for many reasons. Most governments echo their concerns of taxation and lack of controls over the cryptocurrency as two of the stumbling blocks to legalization.