Wondering if you should invest in Bitcoin? If you’ve been around any kid of financial news lately, you’ve no doubt heard about the meteoric rise in the world’s most well-known cryptocurrency.
And if you’re like a lot of people right about now, you’re probably wondering, “Bitcoin – yes or no?”
Should you invest? Is it a good option? And what the heck is Bitcoin anyway?
Well here’s a few things you should know about Bitcoin before you invest. Also note that this article is for information purposes only and should not be taken as any kind of financial advice.
What is Bitcoin?
Bitcoin is known as a cryptocurrency or a digital currency. It’s basically online money. Like any currency you can exchange it for other currencies (like say, buy bitcoins with US dollars or vice versa) and it fluctuates in relation to other currencies as well.
Unlike other currencies however it is decentralized, meaning there isn’t any one central bank, country or government in charge of it. And that means it’s not as susceptible to government or central bank mismanagement.
Pros of Bitcoin
#1 Easy To Send Money
Because it’s decentralized, this also means that you can send a friend Bitcoin (money) on the other side of the world in seconds without having to go through a bank intermediary (and pay the banking fees).
This fact alone makes Bitcoin very popular. Instead of waiting for a wire transfer which can take days, you can send your payment in seconds or minutes.
#2 Limited Supply
There are only 21 million Bitcoins that will ever be mined. This limits the amount of Bitcoin that can ever be produced. This is like saying a government cannot print money because there is a limited supply of bills – and they won’t print anymore.
When there is a set supply your purchasing power is preserved and the currency is immune to runaway inflation.
This limited supply has also helped to contribute to the rise in the price of Bitcoin. People don’t want a currency that can be printed – or inflated – into infinity at the whim of a greedy government.