Yes it is advisable and the below article will give you insights as to why we should invest in Bitcoin.
Bitcoin and its Future Implications on Economy
Bitcoin is a digital addition to the currency that was created in 2009 by Satoshi Nakamoto. The Bitcoin eliminates the concept of middle men i.e. transactions are made without banks interference. One can transfer funds anonymously free of cost and the acceptance of bitcoin in the market has been rising with the gradual passing of days.
Bitcoins were introduced to buy merchandise, to make international payments, to make investments and do many more things anonymously. International payments are easy and cheap as bitcoins are not tied to any country or subject to regulation. Small businesses and medium enterprises are in favour of bitcoins as there are no credit card fees or any transaction charges involved. The recent trend shows a spike in individual buying of bitcoins as an option of investment only by looking into the graph of cost of a bitcoin which has increased in folds in the past 4 years. Few mediums of trading bitcoins are:
Buy Bitcoins on an Exchange
There are several marketplaces which are called “Bitcoin Exchanges” that allow people to buy or sell bitcoins using different currencies. Mt. Gox is the largest bitcoin exchange and many others follow.
Transferring of Bitcoins
There are mobile and computer applications which allow people to transfer bitcoins which resembles to the transfer of digital cash or currency.
Over the past few years, bitcoin has been gaining significant importance throughout the world and the highlight is that it has become the world’s leading cryptocurrency which ended 2015 as the year’s best-performing currency after gaining a staggering 35 percent across the 12 months. Every transaction of bitcoin is recorded in a public log but the names of buyers and sellers are never disclosed however their wallet identity is mentioned in the log. While this anonymity helps prevent the identity of the buyers and sellers at the same time the privilege of buying or selling anything without getting traced or tracked is also provided. That is people can buy or sell anything without revealing their own identity. That’s why it has become the currency of choice for people online buying drugs or other illicit activities. Few benefits of bitcoin are:
- No freezing of money by third party
- No taxes are to be paid for transactions
- No tracking of payments or personal identity
- No transaction costs while performing any transactions
- Bitcoins can never be stolen
However, bitcoin has also gained some bad image as its association with crime such as money laundering and narcotics has created a different perception in the market. Most of the money laundering and narcotics are done through the online black-market. Some of the demerits of Bitcoins are:
- People are not aware about the functionality of the cryptocurrency
- The risk and volatility associated with the currency can never be estimated as there are no policies and framework to support any crisis.
- Bitcoin is still in the initial phase and there will be further development which might restrict the facilities that are at offer now.
In one circular, issued in November 2013, it warned “the users, holders and traders of Virtual currencies (VCs), including Bitcoins, about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to”. The other hazards listed in the document included hacking, dramatic losses due to speculation, and financial disputes that could not be mediated by any third-party authority.
Despite the ban in several countries such as Russia, bitcoin seems to be doing brisk business in India and with bitcoin hitting fresh highs, recent high being $5,846 in the month of October 2017, speculations are there that the price of bitcoin is predicted to rise further in the next 12 months, causing a huge amount of unrest in the mindset of the central banking systems. In the global context the cryptocurrency circulation valuation stands more than the capital valuation of IBM and in future as predicted by the Guardian, the cryptocurrency market along with the addition of blockchain in the mainstream will value more than USD 300-400 billions of annual economic value by the year 2027.
The price of a single bitcoin surged from about $583 a year ago to the current price of above $5000, an increase of 1000 per cent. Its price in June 2013 was about $100. That’s again a phenomenal rise of 5,000 per cent. Bitcoin surpassed the price of gold, which hovers around the $1,200-mark. Data collected from over 100 cryptocurrency companies spread across 38 nations, which makes up for about 75 percent of the crypto-industry. The market size of bitcoin has reduced from 86% to 73% after the Chinese boycotted the use of cryptocurrency, yet the number of users is approaching the million figures.
In Indian, the number of bitcoin users stand at around 100,000 which is a not yet a match to the world financial powerhouses like USA and China. The number of bitcoins in circulations in India stands at around 400,000 which stamps a staggering market value of $500 million. In recent times several cryptocurrency players have popped up in the Indian market as well like Unocoin, Zebpay, BTCXIndia and Coinsecure. Among these Unocoin has bagged major tie ups with popular brands and generates 200-250 trades per day while offering several options to trade in.
To address this hovering issue, one solution that seems possible in every country is that the government should intervene and draft a framework along with amending the existing framework to carve restrictions on the use of cryptocurrency. The government along with the central banks should draft out policies to regulate the growing use of cryptocurrencies which will help in preventing the cases of money laundering and other black money dealings. Special regulations for the start-ups should be in place so that they restrict themselves from trading in bitcoins.
The current picture looks bright to the business world but when considered the banks and other central banking systems, the losses that are being incurred is huge and that in turn is affecting the whole economy. The turmoil is in reckoning in case the issue of cryptocurrency is not dealt with seriously.