Have you been thinking about putting your money into Bitcoin but still having plenty of doubts in your mind? As a beginner, it’s inevitable to think that it’s already too late to jump on the ship, with Bitcoin’s price now hovering below the $10,000-mark after hitting an all-time high of $19,000 in December last year. You’d hear people saying that Bitcoin is no longer profitable and that it’s downright impossible for Bitcoin to reach tens of thousands of dollars in value as some analysts predict. But despite the noise, you may still want to push through with this investment decision.
Learning The Basics
Anyone who wishes to be a Bitcoin investor should first understand what it really is. Bitcoin can be used to pay for goods and services, but it works differently from fiat. Basically, it’s peer-to-peer digital cash. You can think of Bitcoin transactions as digital messages which the public can see. Cryptography is used to sign these messages and the entire Bitcoin network works in cohesion to verify each transaction. All the transactions can be found in the blockchain, a kind of digital ledger.
You should know that investing in Bitcoin is different from investing in the stock market in which you acquire assets. Bitcoin is more similar to the foreign exchange market, where you exchange one fiat for another. You convert your cash into digital currency, but you don’t get an ownership share of any company.
Is Scaling Really A Problem?
One of the biggest problems about Bitcoin and other cryptocurrencies is the scaling issue. Despite its surge in popularity, many people couldn’t help but wonder whether it can really turn into a global currency. Bitcoins are “mined” by powerful computers in the network. As more people use Bitcoin, mining becomes more resource and energy intensive. This is precisely why Bitcoin transactions are often slow and expensive.
Still, it’s not unreasonable to think that the future looks bright for digital currencies. You’d be hard-pressed to find an industry which doesn’t look at blockchain technology and its impact on their sector. More merchants are also accepting virtual coins, prompting consumers to look into cryptocurrencies and actually use them for everyday transactions. And with the emergence of trading software like Crypto Code, turning fiat into Bitcoin has never been easier.
Instead of focusing too much on whether Bitcoin really a bubble is, you’d be better off finding ways to profit from the market. Its extreme volatility means high rewards await those who invest wisely, although the risks are equally high.
Investing in Bitcoin also doesn’t always mean you’re just in it to grow your money. You may want to invest as a way of supporting cryptocurrencies in general. Even if the current Bitcoin price is far from its all-time high, many investors believe in what Bitcoin tries to accomplish – a decentralised platform that eventually makes transactions more secure, transparent, and accessible for everyone. Just be sure you’re ready for a wild ride if you decide to invest.