It’s not money, but it’s currency – cryptocurrency. Bitcoin has been a buzzword and fodder for late-night comedians and business analysts for over a decade. But what is that?
Bitcoin was introduced more than a decade ago and is the world’s first cryptocurrency money that is only available online. Unlike regular currency, Bitcoin is not issued by a government, and no banks are involved in transactions. These transactions are reported in a digital ledger called the blockchain. Anyone can download the blockchain and see every transaction that has ever been made. Any attempt to forge a transaction is quickly spotted as it conflicts with all other copies of the blockchain around the world. There is a much higher level of security. In that sense it is not packable. And while some people buy cryptocurrencies to pay for things, others treat them as an investment like stocks or real estate. And so, people buy bitcoin hoping to pay for $ 50,000 today. Maybe they can sell it for $ 100,000 within a year. In contrast to stocks and real estate, there is no intrinsic value behind Bitcoin. Just a few years ago, each Bitcoin only cost a few cents. Today, a single bitcoin costs more than $ 50,000. The prices of these cryptocurrencies can be very volatile. You can move up or down 20% over the course of a week. It’s that growth and the dream of getting rich quick. As a result, more casual and inexperienced investors are taking the plunge into cryptocurrencies. It’s pretty much a casino where you don’t know your roles. And like a casino, the rewards can be spectacular. The Bitcoin bubble could burst at any time. Yes, you have to be ready to lose everything you invest in the cryptocurrency Bitcoin – groundbreaking, advanced finance and technology with high boom and bust potential as an investment. Chris Pallone, NBC News.