The BitCoin movement feels like a bit of a gold rush. As BitCoin ATMs pop up all over North America, the mainstream crowd is now being let in on what tech-savvy individuals have known for many months now. Yes, there's a new currency, and, yes, it's really interesting.
But, are BitCoins worth investing in? I'm going to go with a really bold 'no' as a response right now. Here's why.
Five Facts About BitCoins
1. BitCoins only exist online
2. 12 million BitCoins have been found (approx.)
3. 9 million BitCoins remain to be found (approx.)
4. BitCoins can't be traced
5. BitCoins can only be spent where they are accepted.
There is a very real chance that BitCoins may end up being completely worthless. With this chance comes the risk that investors may just lose everything. That's a risk that most people aren't willing to take. Is there a flip side to this risk? Sure; BitCoins may replace the value that something like gold has. It could, in fact, be a very valuable investment.
Where to Find BitCoins
Taking a risk and buying some BitCoins might pay off in a big way. If you want to take that risk, consider using money that isn't going to break you if it's lost. Realize that BitCoins are a risk. Understand that your money may go up in smoke. Still want to chase the BitCoin dream? Here's how it works.
BitCoins have to be mined by guessing solutions to really complex math problems while also recording BitCoin transfers. As a reward, "miners" receive BitCoins. The competition to find the remaining BitCoins is fierce (the number of BitCoins won't exceed 21 million). You can mine coins by using your home computer, but most miners are now using very complex systems that come with a high price tag.
But, all hope is not lost. You can still buy BitCoins from those that have gone out and mined some.
A List of BitCoin Sellers
Coinbase.com, Mt. Gox, and Bitstamp.net are the most popular resellers of BitCoins. As mentioned above, there are also some BitCoin ATMs across North America where you can exchange your currency for coins.
If you want to buy some BitCoins, realize that this market is anything but stable, and the coins are only going to be worth something if people keep believing in them - it's all very philosophical if you think about it. And, remember, BitCoins only exist online.
How much is one BitCoin? Right now, that price is around $800, which means that investors are still believing in this digital currency. Last February at about the same time, one BitCoin was worth $20.
If you buy one BitCoin right now, it could be worth millions in the future. Or, it might not be worth anything at all.
My advice? If you don't have $800 to toss, don't invest in BitCoins thinking that this will be the investment you can retire with. It might just be that -a retirement fund. But, it could also be just a craze, a foolish endeavour, or something that many will look back on with a shaking head.
Did you invest?