Bitcoin: The Good, the Bad, and the Basics



What is Bitcoin?

Bitcoin is the most well known cryptocurrency in the world. It was created in 2009 by a group named Satoshi Nakamoto and was released to the public as an "open-source software." Cryptocurrency is a digital form of money that uses encryption technology for security, creation of more units, and all transactions. What makes cryptocurrency unique is that there is no physical asset to back up any of the units. So with Bitcoin, there is no actual "coin" to represent the currency. There is neither paper, commodities, or even a central bank or government that regulates it at the moment.


What are the characteristics of Bitcoin?


Bitcoin is a very liquid asset, which means that it can be converted to cash quickly. As opposed to a popular investment like real estate, which is not liquid and takes a long process to receive cash, bitcoin is much more convenient in that aspect. It also does not take much time, contracting, or financing to invest in Bitcoin. However, just like the stock market, investing in Bitcoin is very risky. It has peaked three times but has immediately plummeted after. So if you want to invest in Bitcoin, please do not do it at its peak. If you know the common trends and understand the risk involved with cryptocurrency, you will increase your chances of making a profit.


How much does one Bitcoin cost?

As of today, on March 24, 2020, one Bitcoin costs $6,590.

Where do people buy Bitcoin?

Bitcoins can be purchased many different ways. You can find a Bitcoin ATM at many local businesses. You can go on a Bitcoin Exchange page online, or you can search for different sellers in your area. Visit https://bitcoin.org/en/buy for more information.

Pros

1) Easy to purchase


Bitcoin does not require a lot of head knowledge or skills like purchasing real estate or running a business. After you pay for it, you can sit back and wait for it to increase in value, if it does not decline.


2) Very Liquid


Bitcoin is very easy and fast to convert to cash. It can be done through a local Bitcoin ATM or can be done through the exchange websites online.


3) Fast Results

If you invested in Bitcoin at the right time, you would have made a fortune in a few years. If you invested $100 to Bitcoin in 2010, you would have made over $70 million during its latest peak.

Cons


1) Expensive

Bitcoin may not be for you if you do not have the means to invest in it. Spending $8,240 on one investment may seem outrageous for many people. It would also make diversification difficult for other investments, if you do not have the means.


2) Not real


The fact that there is nothing physical to back up Bitcoin is very skeptical for many people. Even though money is no longer on the Gold Standard since 1971, it still has paper to back it up, and it can be put in your pocket. Bitcoin can not be seen or touched by any person. This also makes cryptocurrency very risky and dangerous.


3) Security


There have been many cases where millions of dollars with of Bitcoin has been stolen by hackers. Without any central bank, government, or company controlling the transactions of Bitcoin, the security of your cryptocurrency assets is very unpredictable.


Should I Invest in Bitcoin?

In my personal opinion, I would not personally invest in Bitcoin because it has no asset to support it and there are so many other investments that will make you a fortune with less risk. Bitcoin is just like a "get-rich-quick-scheme," and in most of the time, they never satisfy peoples financial goals. With investments like businesses and real estate--which are the types of investments I prefer--you can see and touch your assets, and have complete control of how much money you make in the future.

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