Be Wary before Investing in Bitcoins
Over the past few months, people have watched value of bitcoin rise exponentially. Most people may not have any idea what bitcoin was some time ago. They may not have even heard of crypto currency some time back. However, with the recent government and media attention that crypto currencies have started to receive, people have started to become aware about bitcoin.
Crypto currency gaining acceptance with people
It may not be wrong to suggest that crypto currency or popularly known as digital money has been gaining wide acceptance all over the world. It has been popular for making quick and easy transactions. It would be pertinent to mention here that these secured transactions by cryptography and every transaction having its own signature or private key would be a boon to the people. With ever-increasing value and popularity, everyone looks forward to owning a piece of the action.
Making money with bitcoin
Two major ways of making money with bitcoin have been given here. The foremost would be purchasing the cryptocoins. It would be purchased as an investment with a hope that it increases in value. The second has been the process of “mining” bitcoins. However, once a transaction has occurred, they would be verified over the network by “miners” by usage of complicated algorithms. They would receive transaction fee or freshly minted bitcoins as a reward for their work.
Investing in bitcoin
In case, you were contemplating on investing in bitcoin, you should be wary of the big risk involved. The currency has been relatively new and does not hold intrinsic value. The result would be volatility and big price changes. However, the positivity would be huge amount of money has been invested in the system. Several companies have been signing on the usage of this currency. Therefore, most people may not have any idea when the value of the currency would go back to zero.
Mining offers big risk and reward factor
It would not be wrong to suggest that mining also has big risk and reward factor involved. In the initial stages of bitcoin, people used to mine with ordinary computer or laptop. However, more people have been doing it with difficulty. As a result, the power required for mining has increased largely. Bitcoins have maximum amount that could be minted and getting closer to maximum amount would render the rewards smaller. Presently, miners have been searching for profit has to invest in complicated high-tech mining rigs. These rigs would not provide any guarantee of profit or provide their costs back.