Is Bitcoin a Good Investment?

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Introduction

The question concerning the importance of investing in bitcoins is likely to differ, and that depends on the person you ask. There are people with a future that is fully-distributed whereby the unavailability of centralized overseer creates a great opportunity will have their own opinion. For these people, they believe that bitcoins are expected to have great value in the future. Other individuals believe in traditional trust which is mostly afforded by government institutions and banks. Such individuals will always try to tell you not to take bitcoins as a good investment. However, there are things that you need to consider before making the decision. You have to look at the disadvantages of investing in bitcoins, and that will help you know why they are not.

Volatile and Lack of security

If you think about investing in bitcoins, you first have to find out the cons, and this is crucial. The price of bitcoins keeps changing and this is not a good idea. The prices of bitcoins can change in a short period even up to five days. Also, the idea of a lack of security is something to worry about as an investor. It is only a single company that controls bitcoins, and therefore you may not get help if you make even a single error. For instance, forgetting a password can be a challenge since you don’t have a company to call and have a reset procedure for the password. Additionally, sending your bitcoins to a wrong place means that they are gone and you will never have them.

Government regulations

Government regulations are another aspect that will make you think twice when it comes to investing in bitcoins. There are government regulations that govern the transactions done through bitcoins. An individual can be wondering why government regulations exist. The simple reason is that the anonymous transactions done through bitcoins can lead to significant amounts of challenges to the local governments. Through bitcoins, individuals can pay for illegal activities on the internet without the use of an ID. Moreover, it is a means that people, businesses and other organizations can use to avoid taxes. Particularly, this calls for the government to interfere in the activities done through bitcoins.

It is not an actual investment

Many reasons make us say that dealing with bitcoins is not an investment just like in gold, rare baseball cards, tulip bulbs, and beanie babies. The mentioned items are just things that people used to buy in the past and drove them to absurd prices. Specifically, this is not that they had a social value, produced money or did anything useful but majorly because they believe that someone else will buy them in the future for a high amount of money.

When thinking of also buying bitcoins just like gold and other things, you are just speculating, and this is not something you should do. Speculating is not a significant activity especially for individuals who need to make investments. Speculations imply that you are engaging in a win-lose psychological battle with other people who take money as the only objective. Sometimes you can win through luck, but you have lost energy and time, and that means that you have lost. Through the cons provided, it is evident that investing in bitcoins is not a good idea and therefore finding another form of investment is prudent.

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