Bitcoin is an online digital currency, just like the dollar or pound, but with a few exceptions. Introduced by Satoshi Nakamoto in 2009, Bitcoin taps into a peer-to-peer payment system where there are no middlemen and goods can be securely transferred between any two people on the planet. It is connected to a heavy network of computers and the currency unit for the Bitcoin system (aptly named Bitcoin) can simply be acquired by joining the vast network. Bitcoin provides a fast, cheap and secure alternative for transactions, but few are willing to do so. So the question of a million dollars is still a safe investment bitcoin?
Bitcoin is only a few years old, an interesting creation that has awed many and for the record, made a name for itself in the top financial charts. Its popularity has expanded and led some of the leading businesses such as Virgin Galactic to consider it an acceptable source of payment. Bitcoin prices are increasing at a rate of up to 10% and continue to dominate as alpha in the market and this has made many interested in investing in it.
Another feature of Bitcoin is that it has no central bank and no central government controls it. It is a global currency, and its creation and existence lies behind a complex and cunning mathematical algorithm that allows it to shadow government-related mishaps. Instances of political instability and government absurdities that embarrass the economy and throw years of currency investment into the wind do not occur in the cryptocurrency system. This creates a safe and comfortable investment opportunity with low inflation risks.
The downside
With incredible advantages, cryptocurrency also has its disadvantages. As mentioned, this thing is still taking baby steps; and with that comes great uncertainty. Bitcoin prices are volatile; it is currently rising sharply and can vary from 30% to 40% in a month. The world is still surprised by its appearance and there are very few bitcoin and bitcoin holders. This leads to unanswered questions and cold fear among people, as investing in a new unpredictable “gold mine” can have devastating effects. Its novelty leads to a lack of regulation and scares away potential investors.
The enigma surrounding the Bitcoin system is a major factor to consider. Anything can happen and everyone involved in the Bitcoin market is on high alert. In December 2013, China eliminated the use of Bitcoin and this caused its value to plummet from $1,240 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 entering the system and increases the risk of bitcoin investment so much.