This question is very risky because the dramatic rise and fall of bitcoin has left many investors worried. From the last three years, bitcoin was increasing however, recently it has fallen down and crashed down badly by about 70 percent!
The government does not insure bitcoin as well as other cryptocurrencies, but it still will impose taxes on it. The IRS has made it public that it will start to tax bitcoin. With this decision it is clear that bitcoin highly comes under the risk of being unregulated currency and also gets the disadvantage of tax!
What is bitcoin?
Bitcoin is a type of digital currency which is operated electronically. No one can control it like euro and dollar machines. Bitcoins are produced by people and increasingly used in businesses that run computers all over the world and solves problems related to mathematics. Bitcoin is a growing currency of money that is known as cryptocurrency.
Bitcoin and other currencies
Bitcoins are used to buy stuff electronically just like dollars, yen or euros which also trade digitally. The main difference between bitcoin and other currencies is that bitcoin is decentralized and that it is not controlled by a single organization or body. This is an advantage for some people as a huge bank will not control their money.
No one prints the bitcoin, like other currencies who are printed in large banks and who make their own rules. Instead, bitcoin is created digitally by a group or community of people all welcome to join in. It is said that bitcoins are mined with computerized power in a network which is distributed.
There is a rule that no more than 21 million bitcoins can be made by the miners. These bitcoins can be divided in to smaller units and the smallest divisible amount is known as satoshi which is named after the founder of bitcoin.
How does cloud mining bitcoin work?
If you wish to make an investment in bitcoin mining without managing your own hardware you have the option of using the cloud in order to earn your coins. There are some pros and cons of cloud mining which you should be keeping in mind however such as:
Pros:
Cons:
Bitcoin crash in unavoidable!
At the very present moment, the value of coin is dollars 6331 but on the 28th date the bitcoin fell down as low as 5800 dollars. This value is the lowest that has ever been so far. This decline in the bitcoin also brings about a decline in the interest of the consumer.
However, it is still very hard to conclude that the low value of bitcoin has lessened the interest of the consumer or has increased it. It is also very important to understand that there are many reasons which have contributed to the decline of the coins value. The most common reason and factor are the huge number of hacks which have led to the cryptocurrency exchanges to lose many millions of dollars in the coins.
The main target of these hackers was bitcoin itself, but no one had imaged that it would also shake the confidence of the consumers and lead them to overthink about the security of cryptocurrencies. It also lead the consumers to think twice since there is no central organization which can insure these type of currencies.
Bitcoin continues to lead the rest of the cryptocurrencies in terms of popularity, in the market and among the people. Ethereum and ripple are also gaining popularity and considered as superior to the other currencies. Exactly how these cryptocurrencies will lead the market and how they will get ahead of bitcoin is not known at the moment but only time will reveal their true strength.
