If you are wondering what bitcoin is and whether you should invest in it, then this article is for you. In 2010, the cost of one bitcoin was only 5 cents. Rewind forward in 2017, and its value reached $ 20,000. Again, the price dropped to $ 8,000 over the next 24 hours, causing a huge loss to currency holders.
If you’ve been trying to learn more about bitcoin, this reading can help you. According to statistics, about 24% of Americans know what it is. However, the value of the currency still exceeds $ 152 billion. This is one of the most common reasons for the popularity of this thing. Let’s find out what it is and whether to invest in it.
What is bitcoin?
Simply put, bitcoin is one of the digital currencies. Digital currency is known as cryptocurrency. The term was invented by an anonymous person in the context of the 2008 financial crisis.
A digital currency account is similar to your checking account, which you can view online. In other words, it is a digital currency that can be viewed but not touched. In the case of bitcoins you also have no physical representation. All money exists only in digital form. No one can regulate this type of currency. Similarly, the network is not managed by any organization, and tokens are exchanged between individuals through a complex software system. Instead, it is all decentralized and managed by a network of computers.
It’s important to note that you can’t use these tokens to pay for everything you want to buy. In fact you can only use it to buy from some sellers or online stores. But it can be sold for traditional currency or money. However, more and more companies are starting to accept Bitcoin and other cryptocurrencies. For example, 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 cannot be traced. This is one of the many reasons why most people prefer this digital form of money.
Should I invest in bitcoin?
Remember: before you decide to invest in bitcoin or any other digital currency, make sure you understand the risks associated with this system. Volatility is one of the main risks. This means that the value of your money can fluctuate significantly within 24 hours. In fact the rise or fall in value can be up to 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 safe, we suggest you invest only what you can afford to lose. For example, if you have $ 1,000, you can invest $ 10. And if you lose that amount, it won’t create financial problems for you.
Hopefully now you know what bitcoin is and whether to invest your hard earned money. Remember: you should not invest a lot of money, otherwise you may face serious financial problems.