Over the past few months, Bitcoin has seen a steady rise in its value. At the time of writing, one bitcoin is worth $1157.27 USD. This incredible value appreciation has grabbed the attention of many people. Also, with the media and government paying attention to the virtual currencies, the number of people looking to start their Bitcoin venture has gone off the charts.
Another reason as to why digital currency is gaining so much popularity is its worldwide acceptance as a form of payment at retails, corporations and large business organizations.
Moreover, it has made transactions quicker, safer and cheap as compared to the transactions involving fiat currency.
With all this being said, one question pops up into the mind: “should you make Bitcoin investment or not?”
The goal of this article is to provide you detailed insight on this question. So, let’s get started.
Should You Invest in Bitcoin or Not?
Before asking “should you invest in Bitcoin or not?” you would need to know that there are two different ways through which you can invest in Bitcoin:
- Buying Bitcoin and holding on until the value appreciates
The first one is quite simple. You go to a Bitcoin exchange, buy bitcoins and hope for the value to go high.
Mining, on the other hand, is a little tricky because when a transaction takes place, it goes straight to get verified by miners over the network. The verification process involves some complex algorithms. However, once the transaction is verified, the miners receive freshly mined BTC as a reward.
One of the biggest risks involved in Bitcoin mining is that the currency has no inherent value, is relatively new and has a price which is highly volatile.
Despite the risk, plenty of private companies and organizations are investing a colossal amount of money in BTC. Moreover, the currency is being accepted as a form of payment throughout the world, which indicates that it’s only going to increase in usage and the likelihood of it dropping back to zero is extremely low.
Another risk involved in Bitcoin mining is the difficulty. In earlier days, the difficulty level was not so high and people could easily mine new blocks through their PCs and regular laptops.
However, the difficulty has now gone to the next level with more people joining mining pools.
Since the max that bitcoins will ever reach is 21 million, the closer you get to the number, the harder it becomes to mine the coins, hence the lesser rewards.
If a miner wants to make money through Bitcoin mining, he must invest big in high-tech mining equipment. Even then, profits are not guaranteed.
Apart from these two, there is a safe third option. If you can create some complex algorithms/graphic cards through some cheap equipment, then you can expect higher profits. However, a large majority of people don’t have the sufficient skill set to succeed through this option.
So, What’s the Advice?
Keep yourself updated with the market trends, browse through Bitcoin forums and do some research regarding costs before taking a dive into the BTC world. Following these rules would increase your chances of success by over 100%. Good luck with your venture.