Bitcoins is it right time to buy?
You probably have heard about BitCoin. BitCoin is recently in news due to the heavy crash and BitCoin baby. World first BitCoin baby born in California, Dr C. Terence Lee was paid in full with BitCoins. There are news and articles you may come across those are claiming that BitCoin is going to be the next currency in the paperless one world. There will be no price difference if paid in BitCoin across countries. BitCoin is actually available since 2009, that was once worthless now gaining traction. The question is, will it be a good choice for investment or just prove as a fool’s gold in future?
BitCoin aim for a free society where anyone virtually can create ‘money’. No bank, no traces of transaction, no fee. Also BitCoin can be divisible down to 8 decimal places. BitCoins operate more like a commodity than currency.
In 2009 Satoshi Nakamoto, a pseudonymous person or group first publish a paper entitled Bitcoin: A Peer-To-Peer Electronic Cash System along with working model and source code. That time the innovation didn’t interest anyone. But soon BitCoin concept was adopted by SilkRoad, an online marketplace for illegal drug to continue online transaction sans any traces of payment or receive. That time SilkRoad update the version of BitCoin with a transaction feedback system, to avoid dishonest sellers. This add value to the actual innovation, but the association with silkRoad stigmatized BitCoin for long time and hinder its popularity.
BitCoins gradually gain the popularity. Even during the beginning of 2013, BitCoins was treading only around USD 13, in April it reached as high as USD 266 and then the BitCoin bubble burst. Today it is recovered at USD 74.35 at the time of writing this article. You can find the current BTC treading rate here. There are generally three ways to have BitCoin, 1. Buy BitCoin from exchange 2. Trade BitCoin with others for service 3. BitCoin mining. Anyone can mine BitCoin by running specific algorithm in their high end processor. However the process is so complex that on average mining a single coin may take more than three years. The reality is the power consumption and equipment depreciation will cost more than the BitCoins worth. Therefore mining of BitCoins normally done in pool system.
Lets return to our basic question, is it right time to buy Bitcon? Here I found four basic points why you should not buy BitCoins (published in Forbes Magazine). Firstly The Loses, BitCoins has no customer protection as traditional banks. The BitCoin data may got deleted from your system or operator’s server, and you may lost all your savings. Secondly, Regulation, one can think BitCoin as big money laundering machine. BitCoin is more popular among the people who are involve dubious activities. So many country try not to support the growth of Bitcoin. Third, Scaling, at the end there will be only 21 million BitCoins ever exist. The algorithm is developed such a way that the more number of BitCoins are revealing the more harder the solving of the algorithm is becoming. It has became so much harder now that if the person is not exceptionally lucky, there is hardly a chance to mine a single BitCoin. Fourth, Lack of application, till now BitCoin’s usability is very much restricted in the business of drug and gambling. There are only a handful of legitimate organizations and persons that use BitCoin as currency.
Therefore, BitCoin economy may grow rapidly in coming few years but there will be only a limited appreciation, once it reaches 21 million point.
