When the world decided to go digital and non-centralized in the end of 2017, everyone came to know about the fastest growing cryptocurrency – Bitcoin. It is certain that everybody sees the growth chart and wishes to earn maximum at the earliest. Bitcoin is looked at as an investment where people expect great returns with a blink of an eye.
Well, it is not as it looks like due to its independent, decentralized and non-regulated property. It is true that many have become millionaire but it is wrong to overlook those who lost their entire fortune after Bitcoin. Today, we’re going to discuss the risks and benefits of Bitcoin investment that you should be aware of:
Low risks: If you look at the current dollar to foreign currency rates, they fluctuate a lot. There’s no surprise if you witness a deep dip in any foreign currency that you’ve invested in. As per the records, almost every currency loses its purchasing power with time. Whereas with Bitcoin, you know that only 21 million Bitcoins can be mined in the complete life cycle. If you would believe the reports, there is going to be 1 Bitcoin for every 500 people by 2050.
Safety: There’s always a way to get back the money a person paid to you. Almost every financial institution supports the Chargeback, where you may lose the money you’ve got against your product or service. However, Bitcoin releases you of the worry of losing your hard-earned profit. Once paid, there’s no way you are going to lose it unless you wish to. Thanks to the technology of Blockchain.
Untraceable: Well, it is a boon and curse together. If you don’t want any organization to trace the source of your fund, Bitcoin is made for you. Bitcoin follows the Blockchain technology where you’re given a hexadecimal code of wallet, which cannot be traced.
Conveyable: Can you carry a million dollar with you in a pocket? Well, it’s not the same case with Bitcoin. You’re able to carry a billion-dollar worth in your pocket or smartphone without the fear of losing it. The liberty of easy to carry you’ve got with Bitcoin cannot be promised with either gold or cash.
Acceptance: despite all the news of Bitcoin around the world, it is hard to find a store or hub that accepts Bitcoin. If you want to grab a packet of chips with a billion-dollar Bitcoin in your pocket, you still need the dollar bill to get it for you. Though there has been a surge in the Bitcoin accepting stores in the US, it is still a long way to cross when you can buy something against Bitcoin.
Volatile: Bitcoin can make you rich and poor within less than an hour. Bitcoin is a highly volatile digital currency that is decentralized and uncontrolled. If you can see BTC worth at $15000 right now, don’t surprise if it shows $15 the next hour. This is the biggest problem in opening a store that may accept Bitcoin as payment. Who wants to change the prices of their products every minute?
Easy to lose: You may get back your money if your bank account is hacked; however, it is impossible to get back your Bitcoins if one gets a hold on it. Once lost, none of the organizations or technology can either restore or trace it. It is advised that you keep your Bitcoin in a cold (offline) wallet for which you hold a private key.
Overall, there are both pros and cons of holding Bitcoin. If you possess a sizable amount of Bitcoin, it is important that you either keep them in a cold wallet or in a hardware wallet. Whereas if you’re a newbie and want to invest, make sure you don’t cross the limit that you’re okay to lose.