Bitcoin Cryptocurrency
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Watch this short video that explains what Bitcoin is and why it is the most valuable cryptocurrency in the world. Learn how to use it, how to safeguard it and how to trade it.
Holding Bitcoins is a bit like living in the Wild West. You never know what’s going to happen. If you’re interested in speculation, the purchase of Bitcoins may be a good idea. However, there are several reasons why holding Bitcoins can be a mistake. Bitcoins can lose value suddenly, suffer from a lack of governmental oversight, and offer no protection in the case of loss or theft.
If you’re thinking about investing in Bitcoins, ensure that purchasing Bitcoins is financially advantageous for your unique situation. You might be better off sticking to a government issued currency.
Bitcoins are disadvantageous for the average person:
Bitcoins have a few advantages if you’re interested in currency investing. For the average consumer, however, Bitcoins provide more disadvantages than advantages. If you’re considering the purchase of Bitcoins, make a list of the reasons why. Are those reasons worth the risks? Perhaps so. Only you can decide.
Bitcoin is a unique currency. It’s completely virtual. Bitcoin is unsupported by any central bank or other authority. It’s not the official currency of any country. Yet all of these are both advantages and disadvantages. Whether or not bitcoin is an advantage for you is dependent on your situation.
Bitcoins have several advantages over conventional currency:
It’s easy to see why bitcoins are useful in certain situations. You have a greater degree of privacy and a lack of transactional costs. Bitcoins can be used at any time and on any day. You can still make or accept a payment on Christmas day at 2:00 AM.
There’s a little bad news, too. Bitcoins have certain disadvantages. The lack of governmental regulation and the limited supply of bitcoins creates challenges. In addition, considering the total number of retail establishments, only a small percentage of them accept bitcoins.
Consider these disadvantages:
It’s important to consider how the disadvantages of bitcoins dovetail with your situation. It’s easy to lose all of your bitcoins if you’re careless. You can also lose a lot of money quickly if the demand for bitcoins drops sharply.
The bitcoin system is capped at 21 million bitcoins. Currently, there are roughly 14,800,000 bitcoins in circulation. There is a lot of speculation about what will happen to the value when the 21 million-bitcoin limit is reached.
In general, the US stock market is very liquid. You can quickly sell most stocks, bonds, or mutual fund shares at the going rate without concern. There’s always someone willing to buy from you or sell to you, provided the price is right.
Given the limited number of bitcoins and users, it’s not as easy to sell your bitcoins if you wish to cash out. Even if you can find a buyer, even relatively modest transactions can create volatility in the price for a bitcoin.
Bitcoins are created through a process called “mining.” The first computer to solve a puzzle receives a certain number of bitcoins. Unfortunately, there are many other computers competing against yours. And you probably don’t have a computer that can compete.
Mining bitcoins is extremely challenging. There are companies with powerful computer networks designed to solve the puzzles. The typical home user has no chance of winning.
When a puzzle is solved, bitcoins are created and awarded to the owner of the winning computer. The number of bitcoins provided decreases as the number of bitcoins in circulation gets closer to the 21 million-bitcoin limit.
With an adequate computer, the puzzles take approximately 10 minutes to solve. The winning solution requires quadrillions of operations per second. The difficulty of the puzzles can increase or decrease to match the current environment. Winning computers now utilize dedicated circuits rather than software to solve the puzzles.
Most of those competing spend more on electricity than they win in bitcoins!
Investing in bitcoins is becoming more popular. Many millionaires have been created through the buying, holding, and selling of this currency. It’s also possible to lose a lot of money. Bitcoin is becoming more mainstream every year, and even Wall Street is taking an interest.
There are two primary ways to invest in bitcoin at this time:
Currency investing is always exciting and rarely predictable. Bitcoin investing is even more so. It’s definitely not the place to put your entire nest egg. However, if you’re bold and stay informed, bitcoin is one way to invest with high risk.
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