Before you can understand how high profits can go and how many risks you could be taking by getting involved with Bitcoin, you must first know what Bitcoin is.
Bitcoin is a decentralized currency that uses technological means from peer to peer to carry out transactions and conduct other financial measures on a single network. Basically, it’s a specific type of currency backed by a technology-based system.
It operates on a technology-based network?
Yes, it does. Which ultimately means that you cannot take the currency out of a machine and hold it in your hands – it’s today’s rendition of internet currency.
There are a few good things about the system, but there are also a few things you should be on the lookout for regarding Bitcoin, too.
Okay, what’s so good about Bitcoin?
Here’s the biggest example that Bitcoin enthusiasts lead with: Your investments can practically double in a 6-hour radius – but the opposite is true, too. Those profits can skyrocket downwards – we’ll get to that later.
If you pick the right time and the right amount, you may end up filthy stinking rich from Bitcoin – there is definitely a high profitability potential with this type of currency. That’s kind of why they call it digital gold.
So, what’s so bad about Bitcoin?
It’s risky, to say the least.
Bitcoin is free of the government, which means that the government cannot control it or interfere with any of its practices. Unfortunately, that means that there’s no central system that regulates the entire process, meaning that a Bitcoin can rise in value or drop in value in as little as a few seconds, depending on how much money a buyer is willing to spend on it.
Another downfall of the technological process is the “mining” involved behind the scenes.
“Mining” is just a fancy term used to describe how the backend works in Bitcoin. Basically, super-powerful computers are used to solve and decode complicated algorithms to exchange currencies. If this system were to crash, the digital money would be lost and irretrievable. Or, even worse, the money could be hacked, and the hacker’s whereabouts could be lost in the ruckus of it all.
It doesn’t stop there, though. Scrutiny is on the rise.
You may be happy about the potential of high investments, and you may be upset about the possibility of losing all of your digital money – but did you stop to think about the third scenario? What if Bitcoin spins out of control and starts slowly increasing its illegal activity?
Being involved with Bitcoin could put you in the middle of money laundering, drug transactions, smuggling goods, and even weapon procurement. You’d most likely know what’s going on – but did you know that if you do get caught participating in any one of these illegal events, you could face a substantial amount of time in prison along with super expensive fines? Just because the government does not regulate the system, doesn’t mean you won’t get caught.
Basically, you need to weigh your options before getting involved with Bitcoin and similar cryptocurrency processes. As long as you’re aware before diving headfirst in, you’ll be relatively safe in your endeavors.