One of the more interesting financial opportunities available today is the chance to invest in Bitcoin. Like any other currency, Bitcoin can be traded on markets, and like gold, it can be traded independently of any currency. To a great extent, it can serve as a standard for currency value, providing a touchstone from which other currency values are determined.
As a potential growth market, Bitcoin investment is very intriguing to people who want to step away from the traditional stocks and bonds. Its unique nature isolates it from certain other risks in investment markets but also exposes it to others. Here’s an overview of just a few of them.
You Can Be The Miner
One way you can invest in Bitcoin is the very simple process of mining for it. Joining a company like Genesis Mining and letting your computer search for errors in the blockchain will provide you with bitcoin.
That makes it a very direct way to invest! It’s almost like buying a share in a company and then showing up there for work on Monday morning, earning dividends for each task you successfully complete for them.
The involvement of miners is what keeps Bitcoin smooth and efficient, so it’s a unique investment instrument in that you do more to benefit its health than simply holding shares. And every miner actually benefits every other miner, creating an environment where a rising tide truly lifts all ships.
It Is Finite
One of the most effective ways to increase the value of a good is to keep a tight limit on how much of it is produced. That’s why limited-edition artwork and other collectables are more valuable than those that can be produced perpetually. The inability to provide these restrictions has been the undoing of many currencies over the years.
Bitcoin does have a limit–21 million coins. That is in sharp contrast to paper money, which can be printed at the discretion of the issuing government. This is how a currency becomes devalued, leading to inflation. There is no better example of this process than in post-World War I Germany, where massive war debt led to unfettered currency production and hyperinflation.
Bitcoin has no printing press; once those 21 million are issued, production stops–and value increases. And because mining is becoming ever more difficult–just as with real geological resources–the time to invest is earlier, not later.
It’s A Current Currency
Any currency is a highly speculative investment. The value of the dollar, the euro, the peso, the yen, or anything else is tied almost entirely to the desire of people to hold it. Should enough fickle consumers lose interest, the currency collapses.
Bitcoin is not likely to experience such a failure. While there are countless people who still know nothing about Bitcoin, it’s undeniable that the trajectory of the world economy favours its continued growth. Its flexibility, limited supply, and ease of use make it a perfect fit for a global economy that values rapid action and fluid movement. In addition, it’s an open-source system without executives or bankers to manipulate the system for personal gain.
For the tech-savvy investor who holds a good understanding of currency markets, Bitcoin presents a unique opportunity to get in ahead of increasing scarcity and make an investment with long-term value and durability.
Cover Image via FlashBuddy