Bitcoin (BTC) is a newly emerged digital cryptocurrency. Bitcoin hit the market in 2009 after being developed for a year by ‘Satoshi Nakamoto,’ a pseudonym for the peer-to-peer currency creator. Bitcoin is a true online-only currency not backed by any government or banking organization. The ‘coins’ are acquired through online mining. To mine Bitcoin, an individual needs a computer to solve complex math problems. Any mined coins are stored in a digital wallet online on a cloud-based server or a person’s home computer. Another way to get Bitcoins includes trades or transactions where they are used for purchasing goods or services. 

 

Bitcoin wallets are used for storing, trading, and anonymously transferring the cryptocurrency. Any transactions made with Bitcoin are tracked only by the digital wallet’s assigned number and, therefore, remain untraceable to the individuals involved in a Bitcoin transaction. The anonymity makes the currency an enticing option for people looking to trade on the dark web or for the commission of illegal goods and services. These negative aspects bring a lot of attention to the currency and drive many countries to attempt regulation methods for the currency that began as a global element for positive change.

 

Since there are a limited number of Bitcoins in circulation, their value can spike. When the ‘coins’ were first introduced to the market, an average exchange rate was equivalent to under USD 10 for one Bitcoin. To determine the value of BTC at any time, one can simply log in to Blockchain.com, a Bitcoin public ledger service and trading site. As of this article’s writing, Blockchain showed the value of 1 BTC at over USD 22,000. 

 

The current value of BTC can appear like a factor for considering Bitcoin as a good investment option. However, reality shows an increased number of hackers attempting to steal the online currency, more sanctioned data breaches by countries looking to govern and control the currency, and the increased threat of formal regulations (taxes, government refusal to allow cryptocurrency transactions, restrictions, etc.). Considering those factors, Bitcoin is more a novelty and risky purchase than a viable investment tool. 

 

As more cryptocurrencies enter the market, the value of Bitcoin can become even more volatile. Suppose you were lucky enough to mine the currency or purchase it for under $10 a coin; it’s worth holding onto to see if the value increases. Also, Bitcoin purchased for a low amount won’t be as painful to lose if the market value tanks or your account is hacked. Be mindful of how you choose to store your coins. Online wallets can become vulnerable to hackers. Personal computers can have data lost or accidentally deleted. Since no governments or banks insure Bitcoin, there are no ways to replace lost or stolen ‘coins.’ Therefore, jumping into the Bitcoin game and purchasing it at current market rates would not be recommended as a secure investment opportunity.