Bitcoin: is it necessary to invest in bitcoin – risks, disadvantages and advantages – what cryptocurrency do you need to buy?
Bill Gates called Bitcoin a delightful tool due to his ability to provide low-cost payment transactions. But Bitcoin is not the best example of such a solution. Bitcoin will not reach widespread popularity in the mass market because of its anonymity and association with terrorism and money laundering.
I did not initially understand this hysteria around the bitcoins. The advantages are doubtful. Let’s say anonymity. Who needs it in the sphere of payments? For what they pay and at the same time want to hide their involvement in the payment? The reaction of the Central Bank was quite adequate: there are the interests of the country, there are the interests of society, and all this romance with “uncontrolled” money – an event in something dangerous.
Decentralization means that there is no single emission center, no service that would block accounts, etc. In essence, this is a system of p2p, consisting of equal participants.
A bit of conspiracy theory. During the crisis in Greece and Cyprus – transferred some of the funds to bitcoin and invested in an information explosion: blog posts, active “discussions” in social. Networks, finally mention in the media. As a result, a small increase, then went the stories of enriching those who mined or bought for a song and, finally, some big businessmen, institutions and even the governments of individual countries expressed their support for the crypto currency. In the end, we see such a schedule. Who bought at a peak of $ 1000, which it was a risk, and it did not come true.
And if you look at the situation from the point of view of geopolitics, the bitcoins are seen as an attempt to introduce a tool for financing certain political, criminal and other groups in countries that have “leaned” on the romance about free money, etc.
On the other hand, the technical part of the work of this system is very interesting and in the future some solutions will probably find application in the field of traditional currencies.
- The bitcoin is programmed. The total number of bitcoins does not exceed 21,000,000. New BTCs appear in the system in batches approximately every 10 minutes.
- In the future, deflation is expected, which is not a problem, since the currency is divided up to the 8th decimal place.
- The disadvantage of bitcoins is their limitations. And given that part of the bitcoins are out of circulation (users forget about them), the problem is only aggravated.
- All data data of this payment system is encrypted, backups are distributed on participants’ computers and synchronized. Each bitcoin has a unique code, it can not be faked or destroyed.
Advantages and disadvantages
The crypto currency has always been treated with suspicion, on the other hand, seeing. As her course grows, many are interested in opportunities.
- Ease of handling.
- Impossibility of forgery.
- Impossibility of withdrawal.
- The inability to turn on the machine to print more than is conceived by the algorithm (in part – protection against inflation).
Bitcoins are an anarchic currency, this is money for free people whose comfort zone extends beyond the borders of individual countries. Bitkon is unpatriotic, but global. At the same time Bitcoin is a challenge to corporations.
At the same time, Bitcoin is a convenient business tool that governments and major players in global markets recognize.
If in 2010 we would have bought bitcoin at a cent price of $ 0.5, say $ 10,000, then in early 2017, selling it at $ 900, you could get $ 18,000,000.
Risks of investments
I will quote the popular thesis: there are no real values for the Bitcoins, there is no state. About value is a false message. The value of the Bitcoins is that they are trusted, ready to exchange goods and services for them, as well as other money.
Exactly on such trust holds the dollar. There is of course still the authority of the United States and the Bretton Woods Treaty.
However, the bitcoins are also quite powerful – their users, to which state banks and large institutions are gradually joining.
So, what are the risks:
- Bitcoins can be stolen from your computer (physically stealing files with wallet data), files can be damaged in case of technical failure of media – backup, use antivirus, do not visit questionable sites;
- Bitcoins can be banned at the state level – perhaps this is the most important risk;
- The BTC exchange rate is unstable, you can buy very expensive and go into negative because of the failure of the course. Theoretically negative reactions in the media can adversely affect the course.
As you can see, the risks are quite typical for stocks and currencies.
Opinion: bitcoin is an extremely speculative instrument for which nothing stands. And it does not have burdens in the form of assets, like shares that might fall because of the issuer’s problems. Bitcoin in this regard is freer, it has no limits of growth.
Reasons for the growth of Bitcoin
- Features of the system, in particular, the limited number of monetary units and the complexity of their production, create a deficit that raises the price.
- Growth of the audience: following the geeks and a small number of investors, more and more new participants, including businesses, shops are pouring into the system.
- Bitcoins provide a lot of information for the media, whose publications have a positive impact on the image of the system and attract new participants.
- Supranationality of currency makes it an acceptable way to care in cases of state, local crises. This was well demonstrated by the Cyprus banking crisis.
- Thus, the main source and stimulator of the growth rate – the trust of users.
However, it is important to understand: there is no guarantee of the growth rate!
A few remarks:
The founder of the Bitcoins – Satoshi has a significant amount of BTC, if he decides to sell them, it will lower, at least for a while, the exchange rate. But most of all bitcoins on the account of the FBI, in their wallet about 150 000 coins.
The exchange rate is reflected in the exchanges and depends on the supply / demand.
Opinion of the skeptic: on different stock exchanges BTC courses vary significantly. While still have a huge impact on people and organizations owning exchanges and exchangers. Nevertheless, this means that while they invest in the growth of BTC, you can go with them on the same wave and earn, it is important only to merge in time.
Now more shops are starting to take bitcoins – this is very good for the system.
Experts advise the simplest option: cheaper – buy, if there is no negative, capable of bringing down the rate even lower. Remember – the falling knife is dangerous to catch!
Bitcoins are gradually recognized by various states and, despite some progress at the rate, become one of the options for diversifying savings, and in some cases a means of “transporting” finance. In view of this, with the development of the crisis, bitcoin will grow.
Bitcoins are valuable because they are accepted as payment. Companies, entrepreneurs, see the promise of BTC begin to take in them payment for their goods and services – this positively affects the course.
Bitcoin is a financial pyramid?
Bitcoins do not have a single center, there are no persons who would give any guarantees, persons who would derive some profit, lead adepts into the system (although some pools have referral programs – but this is somewhat different). There are certain advantages for those who came earlier.
Benefits of the first participants
In 2009 and later, before explosive growth, people were very risky investing in Bitcoins (although the risk, even greater – in proportion to the amounts – is still there), with their risk and trust in the system they supported the currency and provided it with a foundation for growth. Now they are reaping the fruits.
Than Bitcoin looks like a pyramid:
- Who has previously acquired – from that advantage,
- The income of the participants is largely based on contributions to the bitcoins of new users.
- Bitcoin is money, money can be speculated accordingly, some participants can indirectly influence the courses, some participants can organize different pyramids and high-level products based on this currency. However, all this is possible with any other currencies.
Bitcoin is a bubble?
The sharp growth and fall of Bitcoin makes this system look like a bubble. It inflates, raises the course, at the right time the interested participants merge and the course collapses. Alas, as already noted earlier – such risks are typical for any currencies, shares. While bitcoin can be freely bought and exchanged for other money – they will live.
Misconception: do not think that the cost of bitcoins is tied to the cost of electricity. Often, mining turns out to be unprofitable.
Can the Bitcoins disappear, collapse, fall apart?
Often there are fears: the states will feel threat to financial systems and will forbid bitcoins legislatively. Even without blaming on Khavala, which exists over the states for hundreds of years, we note that such a scenario is still unlikely, on the contrary, leaders of different ranks and big businessmen are increasingly expressing themselves behind Bitcoin, recognizing the future for them.
Technical aspects of reliability
Bitcoin is a peer-to-peer network whose clients share data on a specific protocol and given algorithms – there is no organization that would monitor these protocols – they are programmed and unchangeable.
If someone decides to change the algorithm to their own advantage, the system will see the discrepancy and will not accept the data changed by the algorithm.
At the moment, cryptography experts do not see any vulnerabilities in Bitcoin’s algorithms.
What cryptocurrency to buy and whether to buy bitcoin and other cryptocurrencies
… is interested in your opinion on whether it is worth buying crypto-currencies as a way of investing and if “yes”, then what? Will this bubble burst?
Why you need to buy:
- now everything is just beginning, many crypto-currencies are underestimated, growth prospects for many are estimated at thousands of percent in the coming years.
- We look forward to growth from further legalization in many countries.
- more information about crypto money – more users will learn them – the course will grow faster.
- forecasts for biton growth are favorable.
- bitcoin is somewhat overrated, and in fact it is a kind of icebreaker: braking btc will slow down the rest.
- HYIP comes to naught, crypto-currencies become mainstream, even conservative banks use them: no haypas – there is no explosive growth.
What currencies to buy?
Bitcoin is the flagship. He sets the tone, most investors here, the volume of trading on the btc exchanges while the largest. At least it should be in your investment portfolio.
Ethereum – thanks to its versatility – the platform supports many projects, tied to the blockade. This makes the Ether stable and gives growth prospects.
Ripple – the prospects of merging with the banking system are very much liked by more conservative investors. In the case of expanding the network to banks – Ripple high chances of growth. But this is not a matter of a short time: while banks are eyeing, assessing, there is resistance from traditional money transfer systems. Pay attention to Stellar.
Stratis – an analog of Ethereum, has support from Microsoft.
Zcash – anonymity is popular and in demand.
Cardano is the most “authoritative” crypto currency. Attracts large investors.
Monero is a risky investment. It is considered the most confidential crypto currency. This makes it outside the laws of many states that require transparency in the flow of funds. On the other hand, the greater the pressure of states, the more people will use such solutions for anonymity and security.
P.S .: this post is a personal opinion of the author – it does not oblige to anything, does not impose anything – it decides and risks everyone for himself.
Opinion: the main problem is crypto currency – they all follow bitcoin. It will fail – no funds, protocols, improvements – will not be saved. The more crypts of hooks outside the biton, the more stable it is in oscillations.
Therefore, diversification through the purchase of different crypts – not worth it. If you want to spread out the money for baskets, it’s better to buy shares, companies not related to the production of video cards, processors, power generation.
American blogger, secular person and part-time venture investor Dan Bilzeryan (here we wrote about him) told about his crypto-currency portfolio: 50% bitcoin, 25% Ethereum, 15% – Monero and 10% Bitcoin Cash. Such a conservative portfolio.