Over the past several months I have watched bitcoin’s value rise exponentially. I’d no idea what bitcoin was and never even heard about crypto currency a couple of months ago. But with the recent government and media attention crypto currencies have received, they’ve gotten everyone’s attention.
Crypto currency or even more simply digital money is gaining acceptance quickly all over the world because it makes transactions quicker and cheaper. These transactions are secured by cryptography and each transaction has a unique signature or private key. Having its rise in value and popularity everyone wants a bit of the action. You will find two main methods to generate income with bitcoin. The first is a fairly straightforward method of buying the coin as an investment and hope that its value increases. The second is the process of “mining” bitcoins. Once a transaction has occurred they are then verified over the network by “miners” using complicated algorithms. As an incentive for their work they receive transaction fees and/or freshly minted bitcoins!
From an investing standpoint there is a large risk/reward factor as this currency is relatively new and does not have any intrinsic value causing volatility and big price changes. A confident fact is that there is a large number of money invested in this and companies are signing to use this currency so we have no idea when its value will return to zero!
“Mining” also includes a big risk/reward factor. At first of bitcoin, you was once able to “mine” with an ordinary laptop or home computer fortunejack. However now as more people are carrying it out the difficulty and power needed seriously to “mine” increases. Bitcoins have a maximum amount that may be minted (21 million). And as we get closer and closer to 21 million the total amount of bitcoin rewarded for each successful “mine” gets smaller and smaller. Now “miners” seeking to be profitable have to buy complicated high tech mining rigs and there is still no guarantee they will be profitable as well as make their costs back.
There’s a third and safer option, though. In virtually any sudden happening that promises riches probably the most lucrative venture is selling the tool that helps produce these riches. Like, in a silver rush it will be the shovel and in “mining” for bitcoin it will be mining rigs or powerful graphic cards. If you can produce these as well as get your on the job some cheap you would make a large profit flipping them. Unfortunately, just a select few have the blissful luxury of choosing this option.
With people flocking towards the riches dangling in front of them the scam artists are receiving a subject day as well. Read articles, see the forums, watch the bitcoin market, and research your costs and ROI before even considering investing anything. In my opinion, you need to try this for some weeks before putting any money into play. That is an extremely volatile market and an even riskier investment.