Cryptocurrency: To invest or not to invest?

Probably one of the most controversial sagas that the financial market has ever had to witness. Some of us may remember following how this currency, largely in the form of Bitcoin, evolved, who developed it and whether it was legit or not. In 2013, its value rose from $10 to $1200 within the course of a year as VentureBeat claims. Many, however, were too scared to buy let alone invest in the currency with the rising claims of fraud, theft and shadiness surrounding the product. In this article, we’ll basically go through what exactly a Bitcoin is, how to buy one and its legitimacy as an investment.

To start off, a Bitcoin, in simple terms, is basically an online currency or the online version of money. It can be traded among individuals, exchanged for goods and services and can be stored in what can be referred to as a virtual “wallet”. There is no need for a bank or any middleman to transfer the money but the transactions are made public. They all carry a digital “fingerprint” which can be likened to a serial number on actual, physical money that ensures that you do not spend the same bitcoin twice. The advantage of bitcoins over physical money is that it changes in value like stock on the market. It’s like buying a piece of gold and keeping it in your pocket until it gains a higher value.

The weakness of Bitcoins, however, came in that there was no central establishment to govern these transactions and whilst for some this proved simpler and ideal for others it still makes it all the more likely to get swindled. However, this venture has proved fruitful for some.

In order to buy a Bitcoin you need a “wallet”. It is more like an account which reflects the amount of Bitcoins you have earned or possess. Most people exchange them through exchanges such as Mt Gox. You create an account with them by providing your general personal information and linking to your bank account. Once you have done this, you can begin buying and selling. The biggest question of all is probably, is this a legitimate investment? Well, extreme caution is advised because just like in the real world swindlers are everywhere. Personally I vouch that there are safer ways to invest but expanding into the digital realm seeks like a suitable path these days. Who knows maybe they may soon replace the current popular currency as we know it.

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