As mentioned before, investing in Bitcoin is just similar to investing in any stock. It is a high-risk and high-return investment, and smart minds are guaranteed to experience success and profit.
Of course, there is just one difference between cryptocurrency and regular investments: if you are investing in Bitcoin, always remember that you are dealing with virtual money. There are always possibilities of glitches or high-profile hacking. The entire database of Bitcoin may be deleted in a matter of minutes if a hacker (or group of hackers) is knowledgeable enough. Yes, some people worked hard to ensure the safety of Bitcoin networks, but it does not mean that the network is 100% hack-proof.
In fact, during the early days of bitcoin, an exchange site named Mt. Gox was subject to hacking and collapsed, before losing 850,000 bitcoin and millions of dollars. Furthermore, a glitch in 2016 led to a sudden drop in bitcoin value, with just $0.60 each. The good news is that, throughout the years, blockchain technology is becoming more complex and secure. Given that many are investing in this cryptocurrency, the number of people who are ensuring the security of Bitcoin is increasing.
Generally speaking, Bitcoin is a safe investment for a couple of reasons:
Transactions do not contain customers’ sensitive or personal information. This protects users from fraudulent charges.
Because of blockchain technology, transactions are irreversible and therefore cannot be undone or redone by hackers (not that there will be any hackers in the first place).
Bitcoin merchants are also in full control of their transactions, and they can protect their virtual wallet with backup and encryption, made possible by blockchain.
Because bitcoin networks operate using blockchain, every transaction-related data is stored in its database, and other bitcoin users can see the flow of bitcoin without the reveal of personal information. This makes Bitcoin transparent and trustworthy.
Payments can be made without third parties and additional fees. Moreover, the whole network is protected by heavily-reviewed hashes, like those used for online banking. As mentioned above, some users are rewarded some amount of bitcoin after successfully verifying blocks of transactions.
Remember, the whole business of Bitcoin is as fragile as cyberwar itself. Even if it is supported by blockchain technology, some worst-case scenarios cannot be avoided, such as hacking. Most importantly, the virtual value of blockchain is only as good and effective if people continue to believe in its prosperity. There is no guarantee that a cryptocurrency will last forever, so just in case it happens, the smart decision is always to sell your bitcoins before the market crashes down.
As a final tip, you should diversify your “investment portfolio”. With that said, do not just invest everything in a cryptocurrency. Try investing in the stocks of multiple companies, and even in real estate. It is always good to have alternative sources of profit, especially if it is tied to tangible assets.
In the end, there is no harm in trying out bitcoin investment. It is good to start when its future is still bright. Reap high returns as much as you can, and always be smart. Right now, in the foreseeable future, bitcoin is slowly making the world go ’round.