Have you been wondering whether it’s a good choice to invest in Bitcoin? If you’ve been listening to any financial news lately, there is no doubt you would have head about the unbelievable increase in bitcoin.
Just like a lot of people out there, you might have been finding it difficult to invest in bitcoin because you’re probably scared the price may all come down in one night.
Is it a good option? Should you invest? And what exactly is Bitcoin anyway?
Before you invest in Bitcoin, there are some things you need to know. Don’t just make conclusions based on what you’ve seen, ensure you make more research before joining the program.
What is Bitcoin?
Bitcoin is known as a digital currency or cryptocurrency. Every bitcoin transaction is done online and that’s why they call it online money. You can also exchange bitcoin for other currencies.
Bitcoin is decentralized unlike any other currency, it isn’t controlled by any central bank, government or country.
Pros of Bitcoin
1. Simple and Easy To Send Money
Since Bitcoin is decentralized, it also means that you can send Bitcoin to your friends and family in any part of the world in seconds without having to go through a bank.
This is one of the reasons why bitcoin remains very popular. Instead of waiting a couple of days for a successful wire transfer, you can send your bitcoin payment in minutes or seconds.
2. Limited Supply
The amount of bitcoin that can be produced is limited because there are only 21 million bitcoins that will ever be mined. It’s just like saying a government would not be able to print money because there is a limited supply of bills.
The limited supply of bitcoin has also contributed to the rise in the price of Bitcoin. No one wants a currency that can be printed or inflated into infinity at the whim of a greedy government.
A lot of people think that Bitcoin is completely anonymous. This is not true as the coin is only private and not anonymous. Every Bitcoin transactions that was made can be seen on the Blockchain which is the public Bitcoin ledger.
Every bitcoin transaction is linked to an address – a string of characters and texts. There is no way your address can be linked to you even when people see it.
Many people who don’t like their banks spying on them or showing them how much of their own money that they can move, really like this privacy feature ot bitcoin.
4. Cheaper to Transact
A lot of businesses have to take MasterCard or Visa card these days to stay competitive. However, these cards attract some substantial fees out of every sales transaction.
But a merchant who accepts Bitcoin for every transaction doesn’t pay these hefty fees – so this puts more money in their pockets.
So, above are some of the main pros of Bitcoins. Let’s check out the cons below:
Cons of Bitcoin
1. Price Fluctuations
Bitcoin is so popular for rising slowly over months – and then dropping 25 – 40% within a couple of days. This is so because the coin is being traded 24 hours a day and 7 days a week. Just like the news of Mt Gox a few years ago, it takes the coin some bad news to send the price tumbling down.
Bitcoin price is not stable and there are a lot of unknowns out there that can affect the price of the coin. One of the best ways to deal with this issue is to put in the money you can afford to lose.
2. Slowing Transaction Speeds
The coin recently started facing with higher transaction fees and slower transaction speeds. There are other cryptocurrencies out there that are cheaper and faster.
We’re told that the Bitcoin miners are working on this issue. However, until these problems are solved, you can expect the price to be unstable.
3. Bitcoin Transactions Are Not Reversible
Bitcoin transactions are not reversible unlike a credit card charge. So in a situation where you send Bitcoin to the wrong address – there is no way you can get it back.
Also, there’s been a lot of complaints from people who have lost their Bitcoin wallet address (through phones being stolen, virus-infected computers, hacking, etc.) and they’ve completely lost their hard earned coins. They can’t get these coins back as they are gone forever.
So, you really need to take the time to research how to buy and store your coins the right way.
All of these things are what you should put into consideration before investing in Bitcoin.
While Bitcoin has the potential to change financial transactions, there is still a lot of risks attached to this coin. There are a lot of things that can make you lose all of these coins within the blink of an eye.
If you are ready to purchase a coin, take your time and research your options. Buy your coin from a reputable seller. Some of them run a great business and are trustworthy. While there are some sellers out there that will overcharge you and even run away with your coins.
Find a trusted seller with a good reputation and do not invest more than you can afford to lose.