Should You Consider 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.
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 happened will be verified over the network by miners using intricate 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 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. In the beginning, a bitcoin miner can mine through 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 while you get closer to it, you receive smaller and smaller amount of bitcoin being rewarded for each successful mine. That is why miners who want to gain more profit ought to invest in complicated and high tech mining rigs, but there is still no promise that they will be profitable or they can get their costs back.
There is a third option and this is safer than the two. In case of something suddenly takes place that promises riches, the most profitable venture is to sell the tool that helps to produce these riches. In mining for bitcoin, you must have mining rigs or powerful graphic cards to make a substantial profit. However, just a few miners have the luxury to select this option.
As more and more people flock to the riches, plenty of scam artists are in the lookout also 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 before putting in some money because the market is extremely volatile and the investment is even riskier.