Bitcoin has been in existence for nearly seven years already, after having been introduced in a paper by Satoshi Nakamoto. Since then, the cryptocurrency has gained much hype, causing price to skyrocket in 2013 and to plummet the following year. Are there really rewards in investing in bitcoin?
Apart from buying and selling bitcoin and profiting from the price changes like any other asset, there are other ways to profit from this digital currency. After all, the lack of volatility and the steady decline in prices over the past months could limit profits in this regard.
Ways of Investing in Bitcoin
Another way to invest in bitcoin is to try mining. This involves the use of high-powered computers to solve complex algorithms that are an essential part of transaction verification in the bitcoin ecosystem. Each bitcoin transaction is recorded in a public ledger called blockchain, which adds a layer of security and anonymity to the cryptocurrency.
However, one drawback to this approach is that the price of bitcoin has dropped so much that it doesn’t make up for the costs incurred in buying mining equipment and the corresponding electricity charges. Apart from that, most of the bitcoin available has already been mined and the current size of the blockchain makes it more difficult for new units to be mined. Despite this trend, some still find potential in selling hardware to bitcoin miners.
Those who are financially savvy can be able to trade bitcoin, as funds based on this cryptocurrency have recently been listed on exchanges or included in trading platforms. These bitcoin-related portfolios are typically diversified with other assets though, to manage the risk associated with price volatility. Wealthier individuals can opt to invest in bitcoin startups, which focus on payment integration, remittances, wallets, or other practical applications of the technology.
Apart from buying and selling bitcoin and profiting from the price changes like any other asset, there are other ways to profit from this digital currency. After […]