Before you actually invest in something, of course, you would want to know what you can gain, what are its advantages and disadvantages, and whether it will be worth it. This is how it goes too with bitcoin. Investing in bitcoin promises great value, but it poses cons as well.
Bitcoin is growing in popularity, which makes it no wonder why there are a lot who are taking an interest in investing in it. Here in this article are some of the pros and cons of Bitcoin and how bitcoin actually works.
Understanding what Bitcoin is
Bitcoin is often/usually described as a form of digital, virtual currency, or cryptocurrency. To simplify, bitcoin is a virtual type of money that can be used as well for payment or transactions. Bitcoin also, among all types of cryptocurrencies is the most well-known in most parts of the world.
How Bitcoin Works
Bitcoin, when you invest, it is basically a virtual money in the form of a computer file which is stored in a digital wallet that can be accessed through either computer or smartphone. Every transaction is recorded publicly through a list known as the blockchain. The purpose of listing transactions publicly is to prevent people from making copies and spending/using coins that aren’t theirs.
Where can you get Bitcoins?
There are 3 ways of getting bitcoins. You can get bitcoin either through using real money to buy Bitcoins, you can also choose to sell your things in order for people to pay you with bitcoins, or you can also create bitcoins through your computer.
Is Bitcoin Secure?
It would be difficult to copy, duplicate, and spend bitcoins that you don’t own because every transaction is being recorded publicly. It is also possible for you to delete and lose your bitcoin wallet forever if you choose to do so. This won’t affect anything. Bitcoin’s value also went up, and most who use it think that using bitcoin as money is safe.
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What made bitcoin valuable?
Like before, how Aztecs would trade cacao for gold, the same goes for bitcoin. Many are now willing to trade their goods, services, and even real cash in order to exchange it for Bitcoin. Many people even see that Bitcoin is a worth its investment with great returns.
Risks of Investing in Bitcoin
Though bitcoin is claimed safe, there are still risks that are possible with investing in Bitcoin.
Aside from hacking, fraud may also be one of the big risks of bitcoin investment. Since it is open to anyone, some transactions may be fake. The lack of security with the bitcoin system poses big risks for investors. While bitcoin is claimed safe and the system is said to be designed to address these problems, security and safety of investments still remain a big issue.
- Technology is still young
The technology developed for the cryptocurrency is still very young. It was just 10 years ago when bitcoin came to existence, and it is still being developed into something solid. There have been changes that are happening with the bitcoin system, which makes it impossible to tell what its market will bring. The best and right way to approach this investment opportunity is with due diligence and full caution.