If you are wondering what Bitcoin is and if you should invest in it, then this article is for you. In 2010, the value of one Bitcoin was only 5 cents. Fast forward in 2017 and its value touched $20,000. Again, the price dropped to $8,000 within the next 24 hours, thus causing a huge loss to the currency holders.
If you have been trying to find out more about Bitcoin, this read can help you. According to statistics, around 24% of the Americans know what this thing is. However, the currency still has a value of over $152 billion. That is the one of the most common reasons behind the popularity of this thing. Let’s know what it is and whether you should invest in it.
What Is Bitcoin?
In simple terms, Bitcoin is one of the digital currencies. A digital currency is known as cryptocurrency. The term was invented by an anonymous person in the financial crisis in 2008.
A digital currency account is a like your checking account that you can view online. In other words, it’s a digital currency that can be viewed but can’t be touched. In case of Bitcoin, you have no physical representation either. All the money exists in the digital form only. No one is there to regulate this type of currency. In the same way, the network is not managed by any entity and the tokens are exchanged between individuals through a complex software system. Instead, the whole thing is decentralized, and is run by a network of computers.
It’s important to note that you can’t use these tokens to pay for everything that you want to buy. In fact, you can use it to buy only from some sellers or stores online. But it can be sold for traditional currency or money. However, more and more companies are beginning to accept Bitcoin and other cryptocurrencies. For instance, Expedia and Over-stock accept it from users. One of the main features of this type of money is that the transaction is completely private and untraceable. That’s one of the many reasons most people prefer this digital form of money.
Should You Put Money In Bitcoin?
Remember: before you choose to invest in Bitcoin or any other digital currency, make sure you understand the risks associated with this system. Volatility is one of the major risks. It means that the value of your money can fluctuate significantly in 24 hours. In fact, the rise or fall in the value can be as much as 30%. Another problem is that most of the digital currencies that can be seen today will lose their value within 5 years, according to most experts.
To be on the safe side, we suggest that you invest only that you can afford to lose. For instance, if you have $1,000, you can invest $10. And if you lose that amount, it won’t create any financial issues for you.
Hopefully, now, you know what Bitcoin is and whether you should invest your hard-earned money in. Remember: you shouldn’t invest a good deal of money or you may get into serious financial trouble down the road.