Bitcoin's value is rising at a satisfactory pace and it was started from merely 0.001 USD and as of writing, the price of a bitcoin has exceeded 30,000 USD. It isn't easy to predict whether the price of the cryptocurrency will rise or crash. No investment is safer than storing all your money in a locker. There are a lot of risks involve while investing in bitcoin. At first, we'll know about the advantages and disadvantages of investing in digital coins such as bitcoin.
Is Bitcoin A Good Investment For Amateurs?
Let's know the advantages as well as disadvantages of investing in bitcoin.
Why you should invest in Bitcoin?
1. Growing opportunities:
Bitcoin is the oldest cryptocurrency and is still growing relatively faster than any other cryptocurrencies. Prices are going high and low depending on the circumstances. There are roughly 20 million bitcoin owners around the world. Some investors own a large amount of bitcoin which contributes significantly to the value of Bitcoin. So yeah, it's reasonable to say that Bitcoin is growing rapidly.
2. Not much effort required:
You do not need a certificate or license to buy or sell any cryptocurrency such as Bitcoin. Though certificate or license is required in case of stock trading. To trade, you must have good knowledge or have expertise in that product.
Moreover, to get a trade license, you will require a lot of documents such as affidavit, address proof, MOA and AOA of the company, NOC from the land-owning agency, lease deed of the constitution, and much more. Though investing in Bitcoin may seem much more complicated, but if you try to break it down into steps, you'll find it a lot easier.
3. You can get rich:
For instance, Ratcliff invested 15,000 USD in 150 bitcoin in 2013 at the price of 100 USD per bitcoin and he has purchased a house for his nephew, paid off his kid's loans and he's now waiting for his 1.4 million USD house to be constructed. Nikki Beesetti paid off the loan which she used to buy a 35k USD Tesla Model 3 with the help of bitcoin. You decide. The value of bitcoin is increasing rapidly if view in the graph.
4. No one governs Bitcoin:
This property of bitcoin made it clear to us that we don't need to worry about external/single agency ruling over Bitcoin's price. Cryptocurrencies are not any legal tender under any authority. For example, national currencies are regulated by the respective governments and can legally impose any change to them. But in the case of bitcoin, you don't need to worry about any change brought by any single authority. Bitcoin is traded at multiple places around the world and in this way, the average prices of Bitcoin are counted.
The price of bitcoin is not regulated and it is determined by the demand and supply of their market. Although they can implement some rules regarding the buying and selling of bitcoin. India is planning to ban cryptocurrencies after a bill passed by Lok Sabha as it is associated with a few sorts of risks.
Do you know why India is planning to ban Bitcoin? Because there is no one to regulate it.
Why you should not invest in Bitcoin, is it risky?
Yes, bitcoin mining is definitely risky work. There are several ways by which your bitcoin can be stolen/hacked, deleted, etc.
1. Bitcoin is hack-able:
Methods by which someone's bitcoin can be hacked. Though it is difficult to hack bitcoin.
1. Keyloggers: It is a type of malware that records the keystrokes by which the passwords/pins can be stolen. It is almost impossible to detect this program whether it is running on your device or not.
2. Fake Wallets: These type of wallets are not any physical wallets but apps which are meant to steal the bitcoin of the users. A fake wallet may look quite secured to the one who is using it because there are several legit-looking logos.
3. Stealing of private keys: A blockchain is a place where the information regarding the addresses is recorded and when someone owns bitcoin, they have a private key for getting access to it. The key is stored in offline as well as online ways. Online services can be responsible for the leaking of private keys. Hackers can break into the database if it isn't secured enough.
2. No one regulates bitcoin:
This may be an advantage as well as a disadvantage because there will be no one to listen to your problem during an emergency. Though bitcoin has its own website where one can talk with the agent. On the other hand, the authority of a nation doesn't have any regulation on Bitcoin. The government won't help to clear the fraud or malpractices related to the trading of bitcoin.
3. Bitcoin is accepted by few merchants:
Most of the companies don't recognize bitcoin as a means of exchange. It is approved by just a few merchants.
4. Government is afraid of bitcoin:
Government cannot let Bitcoin agree with its policies. It can possible that if a lot of people started investing in Bitcoin, then the economy of the country can drastically fall. The banking system will make no sense if all the people started buying and selling Bitcoin.