What is Bitcoin?
In a Nutshell, what is Bitcoin?
A Bitcoin is essentially a type of digital currency which uses complicated encryption techniques to regulate how their units are generated, and how funds get transferred between owners. The point of Bitcoin (and also the reason why it has attracted so much negative attention amongst short-sited investors), is that it operates independently of the world banks. This affords it a number of benefits and risks, which we will discuss later; but also puts the Bitcoin in the unique position of being traded as both a commodity and a currency. View Bitcoin to Rand Price.
As a commodity, it works because new units are difficult to come by (through a process of mining) and there is also a finite amount which has been set at 21 million units, and since each of these possible units have inherent value, they can be traded as a commodity.
Benefits associated with Investing in Bitcoin
Bitcoin also has a tendency to inflate rapidly without suffering too many deflation’s. Even when losses are incurred from a drop in value, investors can generally expect their investment to return after some time.
As a commodity, Bitcoins generate interest fairly quickly, so by investing in them, you are essentially gaining proceeds from their value as well as their interest, especially when you hold them for a long time.
The Risk of Investing in Bitcoin
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