Before I even continue explaining what Bitcoin is, how it works, or why you should consider adding it to your investment portfolio, let me first state that I’d consider this investment to be extremely risky. If you’re new to investing or just starting out, your money is most likely better suited in traditional investments. With that said, let’s dive in to an area of investing I’m excited to share with you!
Bitcoin is a form of virtual currency or officially named, “cryptocurrency”. Bitcoin is not the only cryptocurrency in existence, however, it’s the most popular hence why I used its name in the title of this post. In fact, by now, you’ve probably at least heard the word Bitcoin before. In this post I’ll actually be discussing the three most popular cryptocurrencies (in my opinion) that exist and which one(s) I’m specifically investing in.
Before we jump in to investing in cryptocurrency I feel I should at least try to give a basic explanation as to what exactly cryptocurrency is and how it works. In my explanation I’ll specifically be discussing Bitcoin since it is by far the most popular cryptocurrency, but please note cryptocurrencies can differ slightly from one another. Overall, they pretty much work the same way so using Bitcoin as our example will suffice for this article.
Bitcoin, in the simplest of definitions, is a currency that works just like cash, yet operates like a debit card.
Bitcoin allows you to send payment between two parties without the need of a third party like a bank or financial institute.
This is what makes Bitcoin cash like. You don’t need a third party to pay someone in cash. You simply hand them your cash and they provide you with a good or service.
However, unlike cash, Bitcoin allows you to pay someone by sending payment through the internet to their personal Bitcoin address. You can think of this as simply sending money to someones email address.
This makes it more like a debit card, however, unlike a debit card you still don’t need any type of third party to complete the transaction.
Because of the way Bitcoin works, this allows you to send payment to anyone in the world without the need to worry about exchange rates, financial institutions or meeting face to face.
I won’t get in to the technical specifics of how this all works and how it’s secure but if you’re interested you should definitely do some research on it!
Why Invest in Cryptocurrencies?
Technology is creating a more global world each day. The internet has opened up the possibility of working with people on a global level.
Personally, I’ve hired people from India and parts of South America from my office here in Ohio. I’ve paid them using services like PayPal.
I’ve bought items and goods from China, Hong Kong, etc. off sites like eBay as I’m sure you have!
It truly is amazing how global the Earth is becoming and eventually we will need a universal currency that allows us to transact with people from all over the world easily, securely and cheaply. Cryptocurrencies provide that.
Bitcoin has rose in price from a few meager cents to ~$700 per Bitcoin in just a few short years.
As I said earlier, Bitcoin isn’t the only cryptocurrency that has done well. There are two other popular coins named Litecoin and Ethereum. Both of these have also rose from a couple cents to Litecoin being worth about ~$3.50 as of this article and Ethereum hovering around ~$10.00 a coin.
Personally, I’ve been investing in Bitcoins and Ethereum as I believe currently those are the two that show the most promise.
I’m sure there will be more that comes out and if you do decide to invest in this field, you’re going to want to pay attention and start studying it as the leaders could change immediately if a better contender emerges.
Again, this is an extremely risky investment and you could lose everything you invest so be cautious!
How Do I Buy Cryptocurrencies?
In order to purchase cryptocurrencies like Bitcoin, Litecoin or Ethereum you must setup an account with a cryptocurrency exchange.
The exchange I use is called Coinbase.
Coinbase allows you to purchase Bitcoin and Ethereum with funds from either a Credit Card or your Bank Account for a small fee.
If you don’t want to pay a fee to purchase cryptocurrencies you can also try buying it using a site like Craigslist and meeting someone face to face paying them cash for cryptocurriences. I’d consider this much more unsafe then using an exchange like Coinbase but I’ve personally used this method as well with no issues.
You could negate purchasing cryptocurrencies altogether and simply find people willing to part with their coins for services on the web. For example, this Reddit page allows people to post jobs in which they’ll pay for the job with Bitcoins.
Are you currently investing in cryptocurriences? If so, comment below and let me know which ones you are investing in! I’d love discussing cryptocurrencies!