Currently valued at around $10,500 USD, the value of Bitcoin could be set to increase rapidly over the next five years. After reaching a peak in 2017, there has been more mainstream demand for cryptocurrency in the last three years. As investors add legitimacy to this new form of currency, millions of people are choosing to put their funds into Bitcoin and other forms of cryptocurrency.
Like any investment, there’s no guarantee that buying Bitcoin will lead to good returns. However, Bloomberg analyst, Mike McGlone has predicted that the cryptocurrency will hit a value of $100,000 USD by 2025. If correct, many early investors could be in for a big payday.
Of course, you don’t have to hold on to your Bitcoin. If you’d rather spend it, there are plenty of ways to do so. As more merchants accept cryptocurrency as a form of payment, you can now buy virtually any type of goods or services using Bitcoin. From grocery shopping to playing Bitcoin poker, there are endless ways you can use cryptocurrency in day-to-day life.
How Does Bitcoin Work?
Bitcoin is essentially a digital currency that can be used online. When you want to buy a product using Bitcoin, for example, you send a specific number of Bitcoins (or percentage of a Bitcoin) to the vendor virtually. Once this payment is received, the vendor prepares your order and ships your goods.
Crucially, every Bitcoin transaction made is recorded publicly. Known as a ‘blockchain’, the public ledger is secured via cryptography but is allows transactions to be verified. This reduces the risk of fraud and ensures that the user ‘spending’ the Bitcoin is their genuine owner.
You may have heard of the term ‘Bitcoin mining’. Mining occurs when a pending transaction is confirmed in the blockchain. A distributed consensus system is used to facilitate Bitcoin mining, although the vast majority of users never need to look this far into how Bitcoin actually works. Essentially, the process of Bitcoin mining ensures that blocks, or transactions, are added to the chain randomly and non-consecutively. This prevents them from being rolled back, modified or altered in any way and preserves the integrity of users and their transactions.
Is Bitcoin Safe?
When digital currencies were first launched, there were widespread concerns regarding safety and security. Of course, you should take steps to ensure any potential online transaction is legitimate before moving forward with it. However, Bitcoin is a safe method of transferring or holding funds, providing you use reputable wallet providers and exchanges.
Should You Invest in Bitcoin?
Just because Bitcoin trading is generally safe, doesn’t mean that your investment will be successful. The value of cryptocurrencies is dependent on numerous factors, so your investment can rise and fall over time. However, if you’re looking for alternative investment opportunities, Bitcoin could be a viable option for you. As with all types of investment, it’s important to do your due diligence first. By doing so, you can determine whether investing in virtual currency carries the right level of risk for you and, if so, how much you could stand to gain.
