Should You Think about Investing in Bitcoin?
Many have seen how the value of bitcoin has increased exponentially but just 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 as it makes quicker and cheaper transactions that are secured by cryptography and every transaction has its own signature or private key.
Because of its rise in popularity and value, everyone wants to take part and there are two main ways make money with bitcoin. You can either buy the coin as an investment hoping that its value rises or you can become a bitcoin miner. During bitcoin mining, any transaction that occurred will be verified over the network by miners using complicated algorithms and they will receive fees and /or newly minted bitcoins as reward.
From an investing standpoint, it is seen to have a big risk/reward factor because the currency is relatively new. Also, it does not have intrinsic value, which causes 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 as a result of the many changes during mining and it has turn out to be more difficult. At the beginning, a bitcoin miner can mine by having an ordinary laptop or home computer. However, more people are already mining that the level of difficulty has increased as well as 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 unexpectedly happens that promises riches, the most rewarding venture is to sell the tool that helps to produce these riches. In mining for bitcoin, you need mining rigs or powerful graphic cards to make a considerable profit. However, just a few miners have the luxury to select 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 before considering investing in bitcoin. Do this ahead of putting in some money as the market is very volatile and the investment is even riskier.