Bitcoin rally above $ 1000 not only to remind those mass media reported about the full digital currency and sparked interest in seeking new ways to generate high returns in the current low interest rate environment.
From the viewpoint of investment point of view, it is more Bitcoin and gold rather than other currencies in comparison. That is because as an asset, Bitcoin and gold have a lot in common. Both are in limited supply, has a function to use, and many people believe, although their price fluctuations are large, but still is a good way of stored value. In contrast to gold and Bitcoin return, the Bitcoin investment performance over the last five years is much better than the so-called precious metals, gold compared to a year earlier loss of 6% annualized rate of return Bitcoin reached 155%. These show good returns, and the prospects for Bitcoin investors to put money into a new asset class so excited.
Compared with the gold standard, Bitcoin rising value of investors and proven performance, it can all be used to measure the opportunities and risks of the investment world's leading digital currency in the future.
opportunity
Many people believe that, just like other currencies like Bitcoin just because people think it has value worthwhile. For this reason, many commentators believe that the price of Bitcoin development is only just foam. However, Bitcoin reflected excellent returns are drivers, and has nothing to do with speculation or speculative opportunism.
Towards cashless society
We are moving toward a cashless society, this is not a secret, electronic payment services such as debit and credit cards, mobile payments and mobile money more and more popular. This phenomenon is not only in the US and the UK, the use of mobile payment systems such as Android and Apple pay payments are rising, and such as India, Prime Minister Modi recently reduced the bill cash in circulation in developing countries is to promote the National People ' the use of electronic payments.
Was in a cash use less and less society, Bitcoin well integrated into the payment system of equations, as it can be from any smartphone worldwide payments and international remittances. Over the past few months and this is one reason why India needs strong growth of digital currency.
Increased demand in emerging markets
As mentioned above, the demand for Bitcoin developing countries is increasing. This demand is largely due to the country's economic crisis and currency weakness. Such as a sharp rise in Venezuela, Bolivia, Brazil, Colombia and Turkey and other countries demand for digital currency, first as an alternative store of value, but also as a kind of sovereignty in the case of their currency devaluation, digital means of payment .
We really need a fully internationalized, and that any money people have an internet connection can be used.
Similar to gold, large-scale economic crisis or whenever there is uncertainty, bitcoin prices are rising trend. So, this rebound at least to some extent driven by real needs, rather than pure price speculation.
People want to manage their funds in the case does not involve the bank
Another reason for global demand growth of Bitcoin is lot of people want to be their own bank. By some or all of the funds stored in bitcoin wallet and use it to pay for goods and services, anyone can become their own bank, without having to make financial transactions through traditional banking intermediaries. Bitcoin's economic growth accelerated this development. The current Bitcoin Bitcoin economy, including savings accounts, prepaid debit cards Bitcoin Bitcoin peer to peer lending and a range of other services.
risk
Although the issue since 2009, the annual rate of return of Bitcoin has been impressive, but the reality is still that the currency is still in its infancy, and no one knows whether it will really be accepted all over the world or eventually disappear. This Bitcoin future uncertainty is reflected in the volatility of its price.
When investing in Bitcoin, investors need to pay attention to the following points:
Regulatory risks
As a currency or an investment categories, the biggest risk facing the future success of Bitcoin may be regulatory risk. For example, if China decided to ban its citizens holding Bitcoin, the digital currency that prices will collapse. China is the largest market for the current Bitcoin transaction, more than 90% of Bitcoin transactions in China. Therefore, any adverse regulatory changes will have a direct impact on the world of bitcoin investments.
For such a major Bitcoin startups center, too, like the United States and the United Kingdom, if any large economy ban Bitcoin, its price will collapse, and it is difficult to recover.
Scalability bit credits
Another risk is the network Bitcoin participants failed to reach an agreement on how to deal with scalability. In order to make Bitcoin success, the block chain needs to be able to handle larger volumes than the transaction currently being processed, and must be able to do it in a shorter period of time. Currently, Bitcoin transaction usually takes 20-40 minutes, this time for the international money transfer business is good, but at the cost of pay coffee may not seem so good.
Bitcoin core development team came up with ideas on how to expand the Bitcoin currently being considered for implementation. However, before implementing any major changes, most of the support block chain Bitcoin miners need to agree to these changes. If there is no agreement, Bitcoin scalability issues may cause long-term predicament into Bitcoin.
Bitcoin for the company's large-scale cyber attacks
Large companies and Bitcoin digital currency exchange network attack may suffer when there is a potential risk and losses, which has been shown to previous price of Bitcoin has created a significant impact. Mt. Gox hack 2014 and August 2016 the Bitfinex hacker was driving down the price of Bitcoin.
Research shows that since 2009 Bitcoin release, about a third of Bitcoin exchanges are being hacked too. Despite efforts to improve exchanges and Bitcoin startups network security, but the risk of large-scale hacker attacks is real, and it could happen again in the future. However, high-profile hacker will only have a short-term impact on the price of Bitcoin, but will not really affect its long-term price developments.
It is replaced Altcoins
Another frequently mentioned risk that one or more of the better digital currency Bitcoin may be exceeded and become a leading investment options. Bitcoin faces some challenges, such as scalability issues can be improved or alleviated by new digital currency, then the currency may continue to grow and replace the position of Bitcoin. However, the first-mover advantage and its development Bitcoin ecosystem has to be firmly positioned as the leading digital currency, such a possibility seems unlikely.
In addition, studies have shown that the actual price of Bitcoin has exceeded the vast majority of the most popular altcoins, so even from an investment perspective, perhaps more than holding Bitcoin Bitcoin will replace bets altcoins be better.
51% attack
A risk that not all investors are aware of the so-called 51% attack. 51% of the attack is a centralized token bit excavating operation, to obtain more than 50% of control block chain, in this case, the deal would be reversed, which will make the entire chain block can not be used because the network there is no trust. In so far, mining operations throughout the world, while the Bitcoin network is highly fragmented. However, if control of a mining block chain of the business significantly closer to 50%, then Bitcoin future may be threatened.
You should now invest Bitcoin it?
In the first week of this year, we have witnessed the price of Bitcoin broke through the $ 1,000 mark, close to the highest point in history. However, in China's central bank issued a warning to its citizens, warning investors to invest in risky Bitcoin, after prudent investment needs, in just 24 hours, the price fell by more than 20%. Since China is the largest bitcoin market, any notice or action by the Chinese authorities are on the global Bitcoin prices have a significant impact. This adjustment scared a lot of investors just follow the trend of investment.
The surprise 20% adjustment reminder that Bitcoin is still a very volatile asset, but only for adventurous investors. If you're looking for a stable value or stabilize prices in a specific time period, then Bitcoin is not for you. However, if you are looking for a possibility to make your own investment than double or triple the potential, and can bear potentially huge losses, will be part of your portfolio invested in Bitcoin might be the right choice.
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