What it is, what it’s used for, and should I invest in it: Everything you need to know about the newest financial craze
Unless you live under a rock, I’m sure you’ve heard about Bitcoin, the elusive cryptocurrency taking the financial world by storm.
Bitcoin is dominating the news: trumping (pun intended) stories from Washington about the Republican tax plan and littering newsfeeds worldwide with articles about the world’s newest “get rich quick” scheme. As the weeks go by, people watch the value of Bitcoin increase by the thousand, and in turn, people watch their confusion increase by the thousand as they think to themselves, “what even is Bitcoin? And should I invest in it??”
For those of you who have no idea what Bitcoin is or how it works, you’re not alone. Here’s the basic run-down on the cryptocurrency that’s doubling, tripling and quadrupling people’s money:
What is Bitcoin?
Bitcoin is a cryptocurrency and global payment system. It is the first digital currency without a centralized system, meaning there’s no middle-man or bank to oversee activity and transactions.
That means that there are no transaction fees (amazing) and that it’s not necessary to reveal your identity (scary).
Why do people use Bitcoin?
No transaction fees, global access and anonymity are the most attractive features of Bitcoin.
With no transaction fees, some vendors and small businesses are now accepting Bitcoin to avoid credit card fees. In the business world, Bitcoin’s global access and decentralized system is utilized for making large money transfers across international borders. Large money transfers between countries can sometimes take weeks to go through a bank, but with Bitcoin it’s almost instantaneous.
Thanks to its anonymity, Bitcoin is also (not surprisingly) popular among criminals, since anyone can create an address and exchange Bitcoin without exposing their identity. Earlier this year, criminals used a malware software to find loopholes in Window’s security system and locked thousands of computers worldwide. The attackers demanded money (payable in Bitcoin) from the victims in order to unlock their computer.
Moral of that story: get a Mac.
But despite the many uses of Bitcoin, the simplest and most common use is a get rich quick scheme: buying/selling Bitcoin and estimating its future prices.
Should I buy Bitcoin?
If you do, proceed with caution. While Bitcoin has multiplied people’s money in some cases, it’s still new and unpredictable. Many speculate that a crash is in the near future, so don’t invest any money that you wouldn’t mind losing the next day.
Basically, use your common sense and invest smart.
Learn more at www.grifin.com
All words by Lauren Vehar