The Bitcoin/Cryptocurrency Boom
Is Cryptocurrency the future of investing? Cryptocurrency is a form of digital money designed to be secure and anonymous. Certain technology allows users access to secure payments and store money without needing to use their name or even go through a bank. While many fund managers at national banks are very skeptical, Bitcoin has rised a great amount in popularity this year; especially in Asia. As the infrastructure around coins continues to grow, cryptocurrencies could find themselves increasing in value just like Bitcoin.
Posing a threat to the money system due to its competitors and popularity, Bitcoin has become the largest digital currency with no central bank or regulator authority backing it up. According to The Guardian, there is a limit of 21 million Bitcoin that can be supplied and there are currently 15 million in circulation, making it subject to inflation. Since the start of the year the value of a single Bitcoin has gone from $1,000 to almost $5,000; there are Bitcoin ATMs that allow the cryptocurrency to be exchanged for cash, and an it is being accepted by an increasing number of businesses.
All record transactions are updated and held by currency holders on a public ledger called Blockchain, which is not regulated by authority. This leading software program for digital assets has the ability to establish identity ownership and record transactions. According to The Guardian, The Financial Conduct Authority said that anyone investing in ICOs (Initial Coin Offering) should be prepared to lose all their money, with some of the schemes floated potentially outright frauds.
Due to the high amount of anonymity they offer, cryptocurrencies are commonly associated with illegal activity. Banks and other financial institutions have been apprehensive about Bitcoin’s associations with money laundering and online crime.
According to coinmarketcap.com, the current value of cryptocurrencies in the market is over 120 billion dollars. Business Insider stated that since China banned ICOs on September 4, Japan has emerged as the largest market for Bitcoin trading.
On September 29th, Japan’s Services Agency granted 11 cryptocurrency exchanges licenses to legally operate in the country. While statistics are stating that Bitcoin is only going to grow, there are still concerns about its security and whether it is just a fad.
According to Business insider, if you are seeking to invest in Bitcoin, the top 6 Blockchain stocks are BTCS, Global Arena Holding, DigitalX, BTL Group, Coinsilium Group and First Bitcoin Capital. In reference to The Economic Times, if you’re interested in trying out cryptocurrencies, you need to take small steps with a lot of caution:
1. Invest in bits
· Due to the market being so volatile, you will not necessarily get a high return with a large investment.
2. Withdraw your principal
· Withdraw your capital investment from Bitcoins quickly and keep only the profits that you have in your cryptocurrency wallet.
3. Keep your key locked up
· Cryptocurrency companies have easy access to your holdings if you are not careful with the “private key” you are provided to access the digital wallet. Plus, digital currencies are stored on your device, which means if it crashes, so do all of your funds, permanently. To secure your cryptocurrencies, store them in an offline wallet instead of an exchange.