Bitcoin can be described as a digital payment system that does not use banks or intermediaries. A group or a person that uses Satoshi Nakamoto as its alias invented it Bitcoin was released to the world as an open-source software in the year 2009. It is a cryptocurrency, this means that the generation of the units of
currency as well as the verification of funds transfer uses encryption techniques that operate separately from the central bank. Blockchain technology is what bitcoin uses to record all of its transactions. The security of a bitcoin trading platform such as USI-TECH is an issue that is given the utmost consideration when selecting one.
Potential problems of investing in bitcoin
There are a few main concerns that surround bitcoin and that potential investors ought to be aware of, these include the following:
•❑ It is not regulated or backed by the government’s good faith or that of another entity for that matter. Bitcoin’s value is more fickle compared to other currency forms due to its unregulated nature. Most people think of it as monopoly money because it is not based on something that has tangible value such as gold.
•❑Wall Street does not trade in bitcoin. This means that it is not possible to buy or sale them through brokerage. Bitcoin wallets must be set up to act as a bank account for the bitcoin. Afterwards, a traditional bank account must be linked to the wallet. The funds in the wallet can then be utilized in local currency to
both buy as well as sell bitcoin. This implies that bitcoin is not as liquid as other traditional currencies.
Reasons to invest
Investors in the financial industry should take bitcoin seriously because of the following reasons:
•❑ The largest boosters of bitcoin since its inception have been libertarians and geeks. However, this situation has since changed as a significant number of mainstream entrepreneurs and investors has now joined them. These people view bitcoin and as well as other currencies as a legitimate asset class like commodities, bonds or stocks.
•❑ The financial infrastructure that supports bitcoin together with other digital currencies is rapidly maturing.
•❑ Only twenty one million bitcoins can exist. The quantity of bitcoins made by the mining process reduces by 50% every few years. Currently, approximately 80% of the total number of bitcoins have been mined and there are no new bitcoins that will come into existence until after 2040. This scarcity ensures there is a big
demand for bitcoins.
•❑ Governments do not control the value of bitcoins. This is beneficial because the value of bitcoins is not affected by war or if the profligate central bank of a country prints too much money.
The reasons above are not exhaustive but they highlight why investors should either invest in bitcoin or not. In addition, it is advisable to select a bitcoin trading platform that is effective e.g. Loadoo, Cryptopay and Spectrocoin. The final decision of whether to invest in bitcoin or not is a personal one.