Cryptocurrency is hardly the new kid on the block anymore and anyone with even a grasp of personal finance or digital trends will know that these digital monetary systems aren’t going anywhere. Indeed, if anything the popularity of currencies such as Bitcoin has risen, in the context of unstable financial markets across the globe. But for the small-time investor, the retiree with some capital to invest or the business owner of the platform Sortlist or other online concerns what, if anything, is the benefit to investing in digital currency and is it always a safe bet?
In this article, we take a look at what the experts say about investment opportunities for the non-professional investor and whether you should take the risk or stick with the more traditional avenues of investment such as stocks, shares or property.
How it All Began
First, let’s take a look at where the most well known of the cryptocurrencies, Bitcoin, began and where it now finds itself. Digital cash or versions of it have been in existence sings the early 2000s. They perhaps weren’t that well known but developers had already seen their potential and particularly liked how much safer they felt during payment. Systems like Ecash began to develop and become, if not widely known, then certainly used regularly by forward-thinking individuals keen to get in on the ground floor of digital currency to see where it might lead.
These interested parties were smart to stay ahead of the game. Towards the end of that first decade into the new Millennium, the domain name ‘Bitcoin’ was registered and to coin a phrase, there was no looking back. Internet legend dictates that the bitcoin.org website was set up by one Satoshi Nakamoto who, by 2009, had mined his first bitcoin.
The truth of the matter is that there’s very little evidence out there to confirm whether Nakamoto was or is a real individual or a group of developers operating in relative secrecy.
Whether group or individual, the idea soon caught the public and the corporate eye and it was perhaps inevitable that giants such as PayPal would soon hop on board the crypto train, offering payment in Bitcoin as well as more established currencies.
The Greatness of Digital Currencies
It seems strange in many ways that there is still so much confusion over the application of cryptocurrency in everyday life when it has and continues to become as mainstream as it is today but yet this form of transaction is still shrouded in a little mystery. This is probably due, in part, to some of the terminology surrounding Bitcoin and other currencies. The idea of mining and creating blockchains is just a step too far for many individuals and for businesses it just sounds impossible to control and regulate either internally or transactionally.
There are many reasons that have persuaded Bitcoin converts over to the digital dark side but perhaps the most convincing is the security element of carrying out transactions on the digital platform, particularly if you are carrying our large scale transfers of currency.
While initially, it was feared that Bitcoin and others would be a huge draw for the criminal elements of the internet, over time it has proved to be a safe and secure way to work. While there are always dangers attached to online transactions, the immediacy and finality of the transaction have proved to be a draw for many businesses. With greater take up has also come greater regulation of the market, which can only help in protecting its users.
The Future of Bitcoin
While Bitcoin is the obvious example to use when talking about the evolution of digital currency, it certainly isn’t the only player out there and there are those who believe that Bitcoin itself will cease to exist in the not-so-distant future replaced by other currencies better adapted to trading on the world exchanges and financial platforms.
Already currencies such as Neo and Steem have been taken up by the financial community and seem unlikely to disappear any time soon. The big question and the one we asked at the beginning of this article, is how safe any of these currencies are for the smaller investor and if you should be swapping up your dollars, sterling or euros for a foray into the world of digital investing.
The answer is a cautious “why not?”, but naturally this comes with a caveat and quite simply it pays to know what you’re getting into. Some research, some time spent reading around the trends and performance history of the currencies you’re interested in, is going to pay dividends. You might also want to ask yourself the more existential question of why you’re looking into cryptocurrency as a route of investment over the more traditional areas. If you want to make a profit quickly and are happy to shoulder the risk, then you might consider if there are quicker and more profitable ways of achieving this.
If you’re looking for longer-term investment and steady, regular returns, then again there may be more reliable ways of achieving this too. The thing with trading, in any form, is that you have to keep such a close eye on the daily fluctuations and have a good sense, built on experience, of what those fluctuations indicate. Buying and selling can be complex or risky or it can be calm and straightforward, very often it’s a mix of all those elements and changes from day-to-day.
One thing is for sure, it can be highly profitable and it is very often very exciting but with all of that does, of course, come risk and would-be traders should think carefully about how much they are willing to take on and have in place an effective risk management strategy.
How to Get in on the Act
The best way to get started is to look for a trading platform that works for you. You’ll find Forex platforms everywhere but they are all a little bit different and need some careful investigating before you commit.
Some of those differences will include the different types of currencies available to you, the leverage (or trading above your initial deposit) and trading features such as hedging which will probably appeal to the more experienced trader. You should also take into account the minimum and maximum amount that’s required from you to start trading and see if that works for you.
It’s important to remember that when you get into trading on systems such as Forex you’re not actually buying up the currency but rather betting on its performance against other currencies, such as the dollar for example.
Bitcoin For Life
So if you’ve decided to bet on Bitcoin in the exchanges and can see a future for it, how about using it in everyday life? News outlets have reported that houses have been bought and sold, that rent is paid in Bitcoin and it really does seem that despite our skepticism, digital currency is going to become more rather than less commonplace.
Want to know who’s already opened up their cash registers to the future? If you go to fast-food giant KFC in Canada you can pay with your Bitcoin loaded card. KFC is in good company with AT&T, Microsoft and indirectly through Amazon. This company allows you to use Purse.io as a proxy to paying in Bitcoin on their sites.
The list of online and offline stores that are willing to accept digital currencies will only grow over the next decade, so if you’re the owner of a small business it might be well worth your while in getting to know how this will affect your trade and how easy it might be to incorporate. For the rest of us, there are huge benefits to dealing in cryptocurrencies and there is much optimism around the everyday use of Bitcoin and the normalization of these currencies as payment options.
The idea of owning a Bitcoin ATM or credit card might seem like a concept that’s pie in the sky but they already exist and have done for quite some time. While many of us are still getting our heads around paying with apps such as Apple Pay, the future will be Bitcoin apps on our phones that allow us to pay for goods in-store, instantly.
From dabbling on Forex, introducing it at your own online checkouts or simply using it as a consumer cryptocurrency is not going anywhere any time soon. They will only become more normalized and might soon even rival the more established currencies in terms of their stability. The future is most definitely on the side of the cryptocurrency and you’d do well to lay your marker down now and get involved. It might not quite be the ground floor but there’s still plenty of time to get in on investing and trading in a market that yields profitable and exciting results.
It seems likely that governments will attempt to centralize and regulate the digital currencies markets over the next few years so take some chances and find a platform that works for you. Carry a little risk and step into the world of cryptocurrency on the global stage.