Bitcoin investment is an exciting new venture for those with the bravery to take chances that come and go in the blink of an eye. One of the Internet’s newest forms of virtual currency, the Bitcoin is a double-edged sword. While it has an incredible potential for significant financial gain, its value can plummet just as dramatically leaving the investor dazed and confused.
The Basics of Bitcoin Investment
Part of the lure of Bitcoin investment is the risk and intrigue. In 2010, the value of the new Bitcoin currency went from pennies to $30 per coin in a matter of mere months. It is this dramatic fluctuation of value that makes any form of investment risky. However, in the business of Bitcoins, these changes take place at rapid speeds and values.
In addition to the Bitcoin investment changes in worth is the randomness and speed at which it all takes place. This unique Internet currency is not monitored by the government or any clearinghouse, as are other forms of currency investing.
Instead, the value of Bitcoins is determined by a computer algorithm and network dealings between those addicted to the game. Without warning, a coin worth $17 one day may only be worth cents the next day. Ultimately, Bitcoin worth is determined by the way people use and value them. The result is a high-risk form of investment that has become increasingly controversial in the few short years that Bitcoin investment has been an option.
The Facts of Bitcoin Investment
Experts do not expect Bitcoin investment to endure long-term success. The currency is simply predicted to be too volatile. But there are many that are hoping these predictions to be mistaken if for nothing else than that the Bitcoin is largely anti-government. In other words, the Bitcoin cannot be manipulated or controlled.
However, this is exactly what also makes Bitcoin investment a less likely option to the majority of investors. Currently, the Bitcoin is considered an “underground” currency so that they are not widely accepted in the course of everyday transactions. This limited use inhibits the growth of Bitcoin investing and therefore its long-term presence. The Bitcoin investment market is small, however, it is continually growing as more and more investors join in. Some of the most common uses for Bitcoins include goods and web hosting.
Barely three years old, Bitcoins have raised a lot of questions, concerns, and possibilities. For there to be any degree of success, investors must be willing to commit to high risk investments long-term. Regardless of what has been said, the fact remains that thus far there are numerous investors who took the chance on a Bitcoin investment and are today billionaires because of it.
There are not any bitcoin billionaires – it’s impossible. If a bitcoin is worth $5 and there are 10,000,000 bitcoins, then the whole bitcoin economy is worth $50 million. Even at $32 bitcoins there are not enough bitcoins to make anyone a billionaire. A bitcoin would need to be worth $100 at least before the whole economy was worth $1 billion. (I’m using 10000 bitcoins to make the maths simple – the number of bitcoins increases by 50 every 10 minuits currently and will max out at 21 million)
What do you think of your logic now? Just 5 years later 🙂
I agree, but the open platform for personal short term investment is still worth taking a look at.
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