SECURITY CENTER
COLUMNIST / BLOGS
TOOLS
PODCASTS/VIDEOS
How To Invest and Save Money
Britt Erica Tunick is an award winning financial journalist who has spent the past 17 years writing about virtually every aspect of finance. She has mastered the art of boiling down complicated financial topics for readers to understand. |
Bitcoin is a digital alternative to cash. Now with its increasing popularity, it can be used as a method of payment and can purchase certain goods or even to make investments. What is Bitcoin and Should You Invest in It? By Britt Erica Tunick The odds are pretty good that you’ve heard about bitcoin and how rapidly it has increased in value. But that doesn’t necessarily mean you should run out and invest in it. Created in 2009, bitcoin is a digital alternative to cash a crypto currency that can only be held electronically that circumvents the traditional banking system, allowing for individuals or companies to immediately transfer the currency to one another in an anonymous and secure fashion that can bypass geographical boundaries without fees. Unlike traditional electronic payments that create the possibility of an individual’s account being hacked, one of the most appealing aspects of bitcoin is that is relies on a system known as blockchain, which is basically a decentralized distributed ledger system for recording bitcoin transactions. When bitcoin is transferred from one party to another the transaction is simultaneously recorded and distributed across a system of computers, making it extremely difficult, if not entirely impossible, to counterfeit the currency. Bitcoin can be bought and sold using different currencies through marketplaces known as bitcoin exchanges, and it is stored in what is known as a digital wallet on an individual’s computer or on the cloud. As the idea of bitcoin has gained popularity, it has begun to gain widespread acceptance as a method of payment and can now be used to purchase certain goods or even to make investments. Because of its popularity, bitcoin has rapidly increased in value and one bitcoin is now worth roughly $7,000. But since bitcoin can only be bought from another party, and is supposed to be limited at 21 million shares of the currency, you will likely end up paying more than its current market value because you need to purchase it from someone who already owns it. Yet, as with stocks, the value of bitcoin at any given time is dictated by the market and there is no guarantee that it will not eventually lose its value. Given the relative newness of bitcoin and the fact that it hasn’t yet gained widespread acceptance as a form of payment, while it may be tempting to try and get in on the currency’s rapid rise in value, you should only do so if you can ultimately afford to lose whatever you invest in the currency. |
Archive |