Should You Consider Investing in Bitcoin?
Many have seen how the value of bitcoin has grown exponentially but barely 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 because it makes quicker and cheaper transactions that are secured by cryptography and each transaction has its own signature or private key.
As a result of its rise in popularity and value, everyone wants to be included and there are two main ways make money with bitcoin. You can either purchase the coin as an investment hoping that its value increases 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. Additionally, it does not have inherent value, which leads to volatility and big price changes. However, a huge amount of money is invested into this and more companies sign in to use this currency, so there is no idea when the value will return to zero.
Bitcoin miners have a big risk/reward factor due to the many changes during mining and it has become more complicated. At the start, a bitcoin miner can mine using 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 as you get closer to it, you get smaller and smaller amount of bitcoin being rewarded for each successful mine. That is why miners who want to have more profit have to invest in complicated and high tech mining rigs, but there is still no assurance that they will be profitable or they can get their costs back.
There is a third alternative and this is safer in contrast to the two. In case of something suddenly happens that promises riches, the most lucrative venture is to sell the tool that helps to produce these riches. In mining for bitcoin, you require mining rigs or powerful graphic cards to make a significant profit. However, only a few miners have the luxury to choose this option.
As more and more people flock towards the riches, a lot of scam artists are also in the lookout for their next victim. It helps to watch the bitcoin market, read articles, browse the forums and research your costs and ROI prior to thinking of investing in bitcoin. Do this prior to putting in some money since the market is really volatile and the investment is even riskier.