Over the past few months I’ve watched bitcoin’s value rise exponentially. I had no idea what bitcoin was and never even heard of crypto currency several months ago. But with the recent media and government attention crypto currencies have received, they have gotten everyone’s attention.
Crypto currency or perhaps more simply digital money is gaining acceptance quickly throughout the world as it makes transactions quicker and cheaper. These transactions are secured by cryptography and each transaction has its own signature or perhaps private key. With its rise in value and popularity everyone wants a piece of the action. You’ll find 2 major ways to make money with bitcoin. The first is a fairly straightforward technique of buying the coin as an investment and hope that its value increases. The second is the process of “mining” bitcoins. As soon as a transaction has occurred they’re then verified over the network by “miners” using complicated algorithms. As a reward for the work of theirs they receive transaction fees or freshly minted bitcoins!
From an investing standpoint there is a major risk/reward factor as this currency is relatively new and has no intrinsic value causing big price changes and volatility. A positive fact is the fact that there’s a huge amount of money invested in this and companies are signing on to utilize this currency so we have absolutely no idea when its value will return to zero!
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“Mining” even offers a huge risk/reward factor. In the beginning of bitcoin, you used to find a way to “mine” with a regular home or laptop computer. However right now as more individuals are doing it the difficulty and power needed to “mine” increases. Bitcoins have a maximum amount which can be minted (twenty one million). And as we get better and closer to twenty one million the amount of bitcoin rewarded for each successful “mine” gets smaller and smaller. Now “miners” looking to be profitable have to invest in complicated hi-tech mining rigs and there’s still no guarantee they are going to be profitable or even even make the costs of theirs back.
There’s a third and safer option, though. In any sudden happening that promises riches most lucrative venture sells the tool that helps produce these riches. For example, in a gold rush it would be the shovel and in “mining” for bitcoin it will be mining rigs or powerful graphic cards. In case you are able to produce these or perhaps get the hands of yours on some cheap you will earn a considerable profit flipping them. Unfortunately, just a select few have the luxury of choosing this option.
With people flocking towards the riches dangling in front of them the scam artists are having a field day too. Read articles, browse the forums, watch the bitcoin market, and research your costs and ROI before even considering investing anything. In the opinion of mine, you should do this for a few days before putting some money into play. This is an incredibly volatile market along with an even riskier investment.