There used to be a time when people were only looking for graphs at the trading websites. These unregulated exchanges were the only place where Bitcoin was sold and, because of that, this was the place where money could be made. A combination of seasoned stock brokers and money-seeking amateurs could be found at big exchanges like btc-e, Kraken or the late Mt. Gox. A dangerous mix which resulted in manipulative behavior. The price swung up and down like a rollercoaster in Disney World. Nowadays, most of these exchanges are still out there, and their purpose hasn’t changed. Luckily, there is a lot more to Bitcoin right now than mere trading. People know about the virtual currency which inevitably causes it to grow. Businesses and individuals have embraced Bitcoin because of the speed and low cost of transactions. There is even an island getting ready to grant its inhabitants a certain amount of Bitcoin. It feels safe to say that, despite its decline in price, Bitcoin is hotter than ever.
So that gives us a good reason to invest in cryptocurrencies. But what should one invest in? There was a time when people just put their money in mining hardware. Miners are the individuals that use their computers to solve complex mathematical problems. Each problem solved grants them a certain amount of Bitcoin. Back when the difficulty of these problems was not that substantial, this was a great way to earn coins. Some people got rich by doing just that. Over the years, the difficulty went up and because of that, the requirements to get a fair amount of coins out of mining became higher as well. No need to go into great detail about mining setups here, it’s enough to know that mining on a ‘normal’ home computer is close to impossible. You need specialized, expensive hardware for this. It is still an option, but there are other alternatives out there to invest in.
Some investors claim that it’s more rewarding to invest in companies that use or service cryptocurrencies. There are a lot of businesses out there that contribute to the Bitcoin ecosystem. They facilitate the way Bitcoin is injected into this world. Everyone wants to see the day when Bitcoin can be used for everyday purposes. While I believe it may take a long time before we can pay for our groceries at the local supermarket using Bitcoin, the next-generation payment system for internet sales could very well be a cryptocurrency. Companies like BitPay and/or GoCoin are offering solutions for businesses that enable them to accept Bitcoin as a payment method. Jumio and Alternet are two examples of companies that are working on facial recognition ID systems that help protect the safety of cryptocurrency transactions. And we haven’t even mentioned all the online merchants that gladly accept Bitcoin as a payment method, eg.: Overstock, Dell, TigerDirect, Newegg, etc…
So is it time to invest into Bitcoin? We could agree on the volatility of the virtual currency and steer clear from it, but that does not cover the whole story. We need to look further and see that the whole Bitcoin world is changing at a rapid pace. The virtual currency is not used anymore as a speculative investment. Instead, we are seeing Bitcoin being used for what it was intended to be used. A currency that excels in its minimal transaction costs and high level of security. Forget about the faults that were made in the past, this was largely due to human errors. Bitcoin as a currency is still standing strong, and if you feel like you’ve missed the boat, there is good news for you. It’s still in the port, waiting to leave, so get on board!
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Last modified (UTC): September 28, 2014 15:24