Bitcoin is a digital currency that has become the hot topic for many investors. Right now, a single Bitcoin is worth $7,000 and the price is steadily rising. But what exactly is a Bitcoin? Does investing in Bitcoin guarantee a payout?
The Good Times
It’s possible that you can buy two Bitcoins (BTC) tomorrow, and the price of a Bitcoin jumps to $8,000. Wow! You’re feeling pretty good! Your $14,000 investment just made $2,000. This not uncommon with digital currencies. It has happened! January 1 2017, Bitcoin was worth $1025. Unfortunately, however, the next scenario is equally possible.
The World is falling
Tomorrow, you buy 2 Bitcoins for 7,000 dollars each, and the following day the price of Bitcoin drops to 5,500 per coin. Worried, you scour the internet and find out that a CEO from JP Morgan said Bitcoin is a fraud and will crash.
This situation is not just hypothetical. When JPMorgan CEO, Jamie Dimon, proclaimed, “It’s a fraud. It’s just not a real thing, eventually it will be closed,” many investors panicked and sold all of their Bitcoins, which caused the price to fall 4%.
Those investors invested blindly into Bitcoin without taking the time to understand what a virtual currency is.
Cryptocurrencies are a risky investment surrounded by plenty of misinformation.There are tons of articles proclaiming Bitcoin is one giant scam.
Bitcoin is neither a guaranteed money-maker, nor is it a scam. By taking the time to learn what Bitcoin is, you can invest wisely and benefit off the rise of Bitcoin while avoiding the pitfalls others have experienced.
Entering the Rabbit Hole
This blog series will cover the history of Bitcoin and explain what the software does so that you invest wisely in the technology.. My next post will cover core concepts of Bitcoin and other cryptocurrencies. My future posts will cover how to start investing and how to protect your earnings.