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Will You Take into Account Investing in Bitcoin?
Many have seen how the value of bitcoin has grown exponentially but barely a few have an idea about it. However, the government and media have given attention to crypto currencies or digital money and this has caused getting everyone’s attention also. It has quickly earned acceptance since it makes quicker and cheaper transactions that are secured by cryptography and each transaction has its own signature or private key.
Because of its rise in popularity and value, everyone wants to take part and there are two main ways make money with bitcoin. You can either purchase the coin as an investment hopeful that its value grows or you can become a bitcoin miner. During bitcoin mining, any transaction that took place will be verified over the network by miners using complex algorithms and they will receive fees and /or newly minted bitcoins as reward.
From an investing point of view, it is seen to have a big risk/reward factor as the currency is relatively new. Also, it does not have intrinsic value, which causes volatility and big price changes. However, a large amount of money is invested into this and more companies sign in to use this currency, so there is no clue when the value will return to zero.
Bitcoin miners have a big risk/reward factor due to the many changes during mining and it has become more complicated. At the beginning, a bitcoin miner can mine by having an ordinary laptop or home computer. However, more people are already mining that the level of difficulty has risen in addition to the power need to mine. A maximum amount of 21 million can be minted and as you get closer to it, you get smaller and smaller amount of bitcoin being rewarded for each successful mine. That is why miners who want to earn more profit need to invest in complicated and high tech mining rigs, but there is still no guarantee that they will be profitable or they can get their costs back.
There is a third preference and this is safer compared to the two. In case of something unexpectedly happens that promises riches, the most rewarding venture is to sell the tool that helps to produce these riches. In mining for bitcoin, you require mining rigs or powerful graphic cards to make a significant profit. However, barely a few miners have the luxury to prefer this option.
As more and more people flock to the riches, plenty of scam artists are in the lookout also for their next victim. It helps to watch the bitcoin market, read articles, browse the forums and research your costs and ROI prior to thinking of investing in bitcoin. Do this prior to putting in some money since the market is really volatile and the investment is even riskier.