When demonetization was declared last year on 8th November, Bitcoin value with other cryptocurrencies shot up. The youth especially got interested in making fast money through such techniques. But is it a bubble that will burst soon or is it the smartest investment of this decade?
Among all the cryptocurrencies, leading is Bitcoin with a value 4,15,000 today. It started back in 2009 with the value $0 technically, launched by a mysterious developer, Satoshi Nakamoto. The others are Litecoin, Ethereum, Zcash, Dash, Ripple, Monero. Each currency is different from other.
Ripple is the safest option as 55% of its coins are reserved for banks. Cryptocurrencies are virtual decentralized currency based on open-source peer to peer online global network. It runs on and monitored by massive online public network. By giving your dollars, you get coins with encrypted codes, each being unique. Their value is derived from their demand and usage. In essence, its value stems from the people who value it.
Cryptocurrencies are not regulated by government. They are anonymous. Just for instance, what if the website through which you bought bitcoins crash? You can’t send the money to anyone for any purpose!
This clarifies the statement that “Bitcoins could very well become the new Swiss Bank accounts”. Taking their aid, people can pay for drug dealing, gambling, bribery, insider trading, money laundering or for your mother’s hospital bills overseas. Who knows how one is using it?
Due to increasing bitcoins, there is drastic decrease in social development investment and public welfare. The very main problem is that it de-stabilizes national economies and it affects the value of rupee internationally. Another thing for the investor is that its value fluctuates a lot. In a year, it went half of its original value and then regained its value again.
Some crypto currencies, like Bitcoin, also includes mining. It means that except from trading, any of the general men can mine a Bitcoin. It involves a lot of research and coding. While one may waste a lot of time and resource on mining Bitcoins, one may end up getting absolutely nothing or a lot of money. (That’s the game!)
Somehow, it is a game you first need to understand and only then play. To, the general, less aware public - if you understand this market, only then should you invest in it, else your little knowledge can be a dangerous thing!