We are in the age of cryptocurrency and bitcoin has capitalized as being the premier worldwide decentralized digital currency. As it currently stands, 1 bitcoin is worth about $5300.00 CAD. It’s known for being a volatile/fluctuating investment but generally one that has soared astronomically in value over the past 5 years. Here are some questions we’ve gone through the liberty of asking and answering ourselves:
Why have bitcoins become such a hot commodity? The overall worldwide demand has been growing for them. Investors now see it as a new asset like gold, which can hold and even increase in value amid instability in the global markets. The list of companies who take bitcoins as payment have grown, with prominent names such as Microsoft, Subway and Steam being among them.
“But, why is it so valuable?”, you may ask. Bitcoins, much like gold, are prone to inflation, something regular currencies have become a victim of. While the number of dollars issued are being pumped and inflated from the central banks, there is a finite amount of bitcoins that can be mined and yielded into circulation (approximately 21 million). Creating or mining bitcoins also cost quite a bit as well, thus making them harder to retain and more valuable. Mining bitcoins require a fair amount of processing power/electricity, with some larger mines having to pay north of 1 million per month just to foot their electricity bill.
Should you invest in bitcoins? That’s a relative question. It isn’t just a matter of if you should or shouldn’t invest, but of how and when you should invest. The main thing you should do first it educate yourself. Bitcoins are, after all a risky investment and one you should be prepared for if you’re seriously considering pursuing. After all, the verdict is still out on bitcoins. They’ve only been in existence since 2009, whereas a perpetually valuable commodity such as gold has been around for millenniums.