What Is A Bitcoin Investment?

When you hear of the word investment, what comes to your mind? Usually it is money or acquiring anything that has value. Investing your hard earned money is a wise decision especially if you have excessive amount of earnings above your daily needs and expenses. An investment can be in the form of money, or a piece of land, and the like. However, the best investments are the ones that will not be requiring your presence for every moment, passive investments that will give you earnings even if you are not around to control and manage it.

View our post about Introduction to Bitcoins to learn the basics of Bitcoin.

Bitcoin as an Investment

Why not try bitcoin for investment? Bitcoin is a decentralized online currency. Bitcoins amount can vary anytime. For example, you can buy a bitcoin for $50 and then you can check for a bitcoin chart to see its value. Sometimes the amount of a bitcoin can rocked up to $18,000 per coin (December 2017).

As you start learning about Bitcoin investing, you’ll see a term “HODL” which looks like a misspelled “Hold”. It is a reference to buying your Bitcoin and holding it for a long time.

The first version of this post was written when a Bitcoin could be purchased for $8. So it is pretty amazing to think that 1000 bitcoins purchased then, would have cost $8,000 but now it is worth $18 Million! However, Bitcoin fluctuates frequently and it isn’t uncommon to see it rise or drop 20%. That’s why it is better for you to check its current value before doing any bitcoin transaction.

Bitcoin Storage

Bitcoin uses a private key. If you purchase Bitcoin through a Bitcoin Exchange , the Bitcoin Exchange holds the private key.  Since it is private, you don’t have to be worried about people seeing your files or information. However, you do have to be concerned about the Bitcoin Exchange going bankrupt or out-of-business.

A better way to store Bitcoin is to use a private wallet. There are apps that act as wallets but these are vulnerable to hacking. There are hard wallets which are devices which hold the private keys. Thee are more secure because they require a verification before a transaction such as pressing a button.

Supply And Demand

The value of Bitcoin depends on supply and demand. As Bitcoin gets more publicity, more people are buying into Bitcoin meaning there is more demand. This is not just a US phenomenon. The fact that anyone in the world can buy Bitcoin means this is a world-wide currency.

It is interesting to see from the attached infographic below that Bitcoin is just a small percentage of the total money in the world.

Courtesy of: Visual Capitalist

 

With the growing influence of internet, digital currency and financing has incredible potential to change the world. So why not use it in your advantage?