In 2009, Bitcoin sold for a handful of change. Today, Bitcoin is worth around $11,000, but it’s been at nearly $18,000 and tomorrow it could be worth $5,000. We just don’t know. Sounds like a gamble right? It is.
For many, it’s a tempting gamble. Many people have made a lot of money investing in Bitcoin, but they’ve lost money too. Sounds like Vegas.
So, do you bite the bullet or bail out? My advice? Look before you leap. Understand what it is you’re about to get into. Cryptocurrency didn’t get its name by being cryptic.
How safe is cryptocurrency?
It’s called “Crypto” because it’s encrypted; each with its own digital footprint. That doesn’t mean it’s 100 percent safe. No investment is ever 100 percent guaranteed. Besides, it’s not real money as in “currency.” It doesn’t jingle in your pocket or fill up your wallet. You can’t lock it in a safe or keep it in your neighborhood bank. It doesn’t retain actual value; its value is virtual. It doesn’t follow laws of supply and demand. It’s only as valuable as people decide it is. It’s easily stolen if your computer or phone is compromised.
Bitcoin for ransom
Dishonest people will go “mining,” find Bitcoins and hijack them via computer. If you want your computer and Bitcoin restored, they may demand a ransom. Yes, Bitcoin can be held hostage. Even if it’s Fiat, meaning the government has declared it to be legal tender, it’s still not backed by a physical commodity.
Sound like a good investment? It did to Tyler and Cameron Winklevoss, who purchased 100,000 of them in 2013 when the price was $1,000 per coin. After a 1,700 percent growth spurt, the value sits at more than $17,000 per coin. So yeah, they’re billionaires. Jazzed about their success, the Winklevoss twins want to make it possible for the public to invest in Bitcoin in a presumably safer, more reliable, more trusted environment. He shared about it in my podcast, which you can listen to by clicking here.
A public offering of Bitcoin
Also making history in the Bitcoin community is Patrick M Byrne, CEO of Overstock.com. Overstock, one of the first online stores to accept Bitcoin, is about to make an unprecedented leap by offering it to the public. So, of course, I called him up and got the full scoop. What an amazing conversation!
If you want to learn about the future of Bitcoin in the marketplace, you need to listen to my podcast. In a nutshell, Byrne has decided to bite the bullet business-wise and boldly go where very few businessmen have gone before – full-force into cryptocurrency. A warp-drive acceleration like Overstock’s could possibly generate the biggest crowdfunding of digital currency of all time. The hoped-for result? That it’ll gain the public trust it needs to thrive.
What is a Blockchain?
The safest known environment for Altcoin transactions is something Byrne and others are trying to create, a trusted peer to peer environment, or Blockchain. Peer to peer digital environments have been around for a while, but they’re easy to defraud.
So Blockchains revamp how digital transactions are conducted. Its main attraction is transparency because a ledger is created, which acts as a validated register of all peer-to-peer transactions that occur.
So every time a transaction happens, let’s say in the transfer of a Bitcoin, the details are inserted into a block. The legitimacy of the transactions in the cryptographically-protected block is proven through a sort of cross-check by miners within the network. In short, Blockchains help prevent fraudulent activity like double-spending. Blockchains distribute a public record of all transactions and confirm a block before transactions can be finalized and the probability of fraud is greatly reduced.
Learn from the masters
There’s so much to learn from the cryptocurrency masters. One of the most important things is how to store it securely.
Man-on-the-street investor Haggai Green lost over $100,000 because of sloppy storage.
World-renowned Bitcoin guru Andreas Antonopoulos uses a three-tier system by which he divides his altcoin into distinct spending types. Those types are stored in accordance with how he interacts with each one.
Jordan Belfort, a.k.a. The Wolf of Wall Street has seen (and manipulated) the ups and downs of market investments. He has some strong words about Bitcoin, and not all of them good. In my podcast, you’ll hear from all three. But don’t stop there. Investigate the pros and cons. Look at the market trends. Understand how it works. Then make a sound decision.
The current market
As of this writing, Bitcoin’s investment opportunity seems too good to be true. It’s pretty amazing. Coinmarketcap.com reports an Altcoin market capitalization at around $293 billion.
How does it compare to other big fish? McDonald’s is at $138 billion, Morgan Stanley is at $95 billion and Target Stores are at $34 billion. Too good to be true? I don’t know.
Cryptocurrency crashes happen, and right now it seems to be heading for a fall. But then again, with I.C.O.’s (initial coin offerings) on the horizon, it might bounce back.
Bitcoin is a HUGE deal, and it changes week to week. There are strong opinions on both sides, and neither should be taken lightly. I think the important thing is to be content with what you have and be willing to risk only what you can afford to lose. Just in case.
12 questions you’re too embarrassed to ask about Bitcoin
I have put together a list of 12 questions that will give you a much better understanding of this popular cryptocurrency. Click here for the answers to some of the most frequently asked questions about Bitcoin.