Over the past year I have watched Bitcoin’s value fluctuate. Until about a year ago (early 2013) I had no idea what Bitcoin was and never even heard of crypto currency. But with the ever-increasing government and media attention crypto currencies have received, they have gotten everyone’s attention.
Crypto currency, or more simply digital money, is gaining acceptance quickly all over the world as it makes transactions quicker and cheaper. These transactions are secured by cryptography and each transaction has its own signature or private key. With its rise in value and popularity everyone wants a piece of the action. There are two main ways to make money with Bitcoin. The first is a pretty straightforward method of purchasing the coin as an investment and hope that its value increases. The second is the process of “mining” bit coins. Once a transaction has occurred they are then verified over the network by “miners” using complicated algorithms. As a reward for their work they receive transaction fees and/or freshly minted bitcoins!
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From an investing standpoint there is an enormous risk and, as most informed Bitcoiners agree, an even greater potential reward factor. Twenty-fourteen is proving to be a watershed year for BTC, as acceptance of the currency seems to spread exponentially; Bitcoin ATMs and all sorts of start-ups popping up worldwide. Even in the face of the Mt. Gox fiasco and subsequent bankruptcy, the value of Bitcoin seems to be slowly increasing. A positive fact is that there is a huge amount of money invested in this and more and more main-stream companies are signing on to use this currency.
In the end, the question isn’t so much should you invest. Rather, the question is how should you participate in the new paradigm, as the old banking systems and government controlled currencies lose credibility.
Dogecoin is a Litecoin-derived cryptocurrency featuring a Shiba Inu from the “Doge” Internet meme on its logo.