When we consider investing, we take into account savings in bank, property, mutual funds, bonds, share markets, etc. Recently more people have been trying to learn about cryptocurrencies, bitcoins in general. Does it make sense for individuals to invest in it?
First of all, what exactly is a cryptocurrency? How does it operate? Well, cutting through the smorgasbord of boring technological interpretations, Bitcoin along with other cryptocurrencies, is basically a purely digital version of money that enables you to execute a direct financial transaction from entity to entity without any “handlers” such as banks, agents, or credit companies standing in between.
The digital currency runs on blockchain technology. It is a powerful encryption system that protects the currency from being manipulated or replicated in any way. What it all translates to theoretically is a quicker, easier, and much cheaper way to exchange money from anywhere in the world.
What makes the system so lucrative compared to the conventional finance systems is that you have no governing body standing between you and your transactions and therefore no hefty transaction charges.
The hype around these cryptocurrencies is hard to dismiss and it’s easy to get sucked into the whirlpool of people making heavy investments in Bitcoin and other cryptocurrencies.
To put it simply, if you are planning on investing in this novel enterprise, consider it as a form of speculation rather than an investment. There really is no two ways about the fact that cryptocurrencies or some version of it is the way of the future when it comes to conducting commerce.
Having said that, right now, there is no way to predict how and when that future is going to present itself. So at this point, you’re not getting something that has any kind of sustainable value. It is true that quite a lot of businesses have already started accepting cryptocurrencies and their numbers are definitely growing, however, it’s not yet significant enough for its demand to be designed around mainstream trading so for individuals dabbling into it, it can be tough.
If it’s an outright investment that’s in your mind, you are looking at trying to spend it or keep it in for at least twenty or more years until you reach the point where cryptocurrencies are ubiquitous.
Exchange for cash is not easy. First of all, there are several cryptocurrency exchange centers around; however, exchanging Bitcoins for cash is not really cheap, and it can actually take a lot of time.
In the current scenario where volatility is the primary characteristic of these currencies, you would end up losing a great deal of money unless you get a fixed-rate deal. Not all localities would facilitate the exchange of Bitcoins. In the situation where you approach a bank, the high transaction fees would still be something you would have to face.
Final Thoughts
Overall, these are early days in the cryptocurrency trade. You really can’t make out a foolproof plan that will ensure you solid gains through investing in cryptocurrencies. The key factor is to be ready to play for the long haul. Take your time to analyze the events and keep your investments measured for the time being.
3 Responses
Can you be more specific about the content of your article? After reading it, I still have some doubts. Hope you can help me.
Your point of view caught my eye and was very interesting. Thanks. I have a question for you.
Your point of view caught my eye and was very interesting. Thanks. I have a question for you.