Cryptocurrencies like Bitcoin (BTC) have attracted quite a great following since it was introduced. With institutional money entering into the market, the economic analysts await a huge change in crypto. If it manages to get a verified exchange traded fund it can even be floated on Nasdaq and be used as an alternative to conventional currencies.
In comparison to the other cryptocurrencies, Bitcoin is a decentralized currency that makes use of peer-to-peer technology for issuing currency, processing transactions, and carrying out verifications. Although the decentralization helps Bitcoin avoid any government manipulation or interference, there is always the problem of not having a central authority that ensures that things are run smoothly. As such, its value is totally dependent on how much investors are willing to pay, at any point of time.
Unlike physical gold, the use of Bitcoin is limited only to transactions. Therefore it is more vulnerable to collapse. Moreover, its energy-intensive verification process is low on efficiency when compared to the systems that rely on central authorities. Still decentralization and transaction anonymity have made Bitcoin a favored currency for many illegal activities that involve drug peddling, smuggling, money laundering, and weapons procurement.
A computer crash or a hacker attack can erase the digital fortune of a cryptocurrency such as Bitcoin. Yet it is possible to overcome all of these limitations through technological advances, so buy your BTC with some caution.
However, the government scrutiny and regulations that they attract because of their growing popularity can someday erode their fundamental existence. Governments around the world are deciding how they can embrace, regulate, or ban cryptocurrencies.
The number of merchants who accept cryptocurrencies has been increasing steadily. Still they are in the minority. Its widespread acceptance among consumers is crucial if cryptocurrencies like Bitcoin are to be used widely. Also there are complexities associated with these currencies that make it difficult for people who are not technologically adept to understand and accept them.
Cryptocurrencies are made mathematically complex to avoid hacker attacks and frauds. However, they have to be made easier for consumers to understand. They need to come with sufficient safeguards and yet preserve user anonymity. If Bitcoin can deal with these challenges successfully, it might be able to secure the future of the other cryptocurrencies such as Ripple, Ethereum, Litecoin, and Dogecoin.
Only 21 million Bitcoins are to be mined and 15 million are already in circulation. It is this limitation that has made Bitcoin an attractive investment option for many. Despite the volatility, many savvy investors might find ways to make profits from the changing prices of Bitcoin. Nevertheless, it is very important for every investor to understand the concept of Bitcoin and perform all the due diligence before making the first move.
If you are looking at investing in Bitcoin, it is important that you treat it as a highly speculative venture. Being susceptible to huge price swings Bitcoin is for people who can stomach a high level of volatility. In case you have it in you, you can be a part of the Bitcoin revolution by visiting other cryptocurrency authority sites. Else it would be better to start exploring alternative investment options.
