The bitcoin market has taken an upswing that totally shocked even the most optimistic followers of the cryptocurrency. One single bitcoin is now worth $10,000. Those who purchased bitcoin for investment or trading purposes are looking at a great return on their initial buy. Yes, the current news is good for persons who bought bitcoin when the cryptocurrency was valued much lower. Persons who love tech but know little about investing shouldn’t assume that bitcoin – or any investment vehicle – reflects an easy path to riches.
For those wondering how bitcoin works, the concept is rooted in virtual currency not backed by any nation or government. A benefit to using bitcoin is the cryptocurrency can be purchased, stored in a wallet and then used to buy things online in an easy manner. Those concerned about maintaining privacy or wishing to avoid security breaches might prefer bitcoin.
Others have a move intriguing use for bitcoin. Since the value of the currency can go up or down, many buy currency with the hope the value increases. The recent rise to $10,000 shows money can be made with bitcoin. That said, investing in bitcoin means huge risks. The bitcoin market has the potential to be volatile.
And then there is another issue would-be bitcoin moguls must contend with. Money deposited in a bank comes with the security of federal insurance. Money placed inside a bitcoin wallet does not come with such financial protections. If a disastrous situation arises and the bitcoin wallet service collapses, no insurance claim can be made on the money lost.
Bitcoin has been dubbed the future of currency. In time, virtual currency may become the norm. Virtual currency doesn’t come with the added costs of actually printing money. So, governments are likely to switch to virtual versions of their own currency. Of course, currencies issued by nations are “real” currencies while bitcoin remains purely virtual.
Purchasing with virtual currency may not come with too much of a risk if only placing a limited, small amount of funds in a wallet. The same cannot be said of purchasing huge volumes of cryptocurrency with a return on investment in mind.