Bitcoin is a digital currency which was launched in 2009. The person who invented bitcoin remains a mystery although it follows that, ideas about this where set out by Satoshi Nakamoto. It is considered as the largest crypto-currency in the world by market cap. Unlike other government issued currency, Bitcoin is operated by a decentralized authority.
How it began
In August 2008, the domain name of Bitcoin, Bitcoin.org, was registered. The person who actually registered the domain remains a mystery, not known. Later, Satoshi Nakamoto, the person who is believed to have ideas about it, announced that he had been working on an electric cash system which did not require a third party. In early January 2009, the first Bitcoin block was mined after which the cryptography mailing list was announced. Later that month, it commenced fully operated by a decentralized authority, unlike flat currencies.
Risks of Bitcoin investing
Bitcoin is the most successful cryptocurrency in the world though it tries to navigate its way through towards becoming the most recognized and volatile world currency. For the past few months now, just like the other crypto-currencies, its price has been dropping. Volatility of the price is one of the risks facing Bitcoin. Apart from that, other security and risks of investing in Bitcoin are; the safety of wallets, growing vulnerability to attacks of Bitcoin exchanges, double spending, and rogue mines engaging in selfish mining. A research from Edinburgh University said that, the weak spots they found in the wallets where easily exploited. Due to that loophole, Bitcoin remains vulnerable to an extend that, funds can be diverted easily to a different account by a burglar. It is hard to retrieve that money back because no third party involved in the process of transaction, is not like a credit card that the person on the other side will be able to be tracked.
Advantages of investing in Bitcoin price
Investing in Bitcoin price has a lot of benefits as opposed to the risks associated with it. Some advantages are; it eliminates risks fraud, no third parties involved, lower transaction fees, it is easy to use, it utilizes smart contracts. Over the lifetime, it has resulted to big returns than the other assets, though many investors refer it as an inappropriate investment because of its risky nature. Bitcoin price has increased to 135% as of 2009 and 180% since it began. The current chart patterns indicate a continuation of the bull market though looking at them one can conclude that the best is no yet to come.
Disadvantages of investing in Bitcoin
As the world’s most popular currency, Bitcoin is also associated with disadvantages. Some disadvantages associated with Bitcoin are; exposure to Bitcoin- Specfic scams and fraud, Black market activity which may destroy reputation and usefulness and its susceptibility to high price.
In conclusion, Bitcoin is succumbed by some risks and disadvantages due to exposure and its price dropping dramatically, however considering the huge returns and other advantages associated with, is an investment to venture into.