Think Twice Before Investing in Bitcoins
by Mk Handbag MK handbagThink Twice
Before Investing in Bitcoins
The more I think about the Bitcoin
phenomenon, the more intrigued I am. The creators of the Bitcoin have
established a new, virtual currency that's internationally accepted.
Additionally, we now have legitimate and seasoned technology investors who are
investing in Bitcoin startups. This fact alone makes me take the idea of a
virtual currency more seriously.
One of the things that give me pause,
however, is the reality that the field of virtual currencies is still in its
adolescence. We don't know how many other virtual currencies will come online or
who their backers will be. Will this become a Wild West gold rush? At this
point, I'm not sure if anyone knows.
Just consider, for a moment, the
descriptions I've read recently of Bitcoins and virtual currency: "Currency for
the online mode." "Gold for nerds." "Digital currency". "A protocol currency."
"A software currency." "The democratization of money." "Regulation-free
currency," etc.
Though I think that Bitcoins present an intellectual
feast for economic theorists and other people interested in the creation and
functioning of currencies, I really don't think that Bitcoins present a good
investment opportunity for the average investor.
Leave the investing to
the seasoned technology and venture capital investors who often have the
experience and depth to analyze a potential investment. I just don't think that
the average person should be investing in currencies of any kind, let alone a
newly created virtual currency.
I recently saw a television interview of
a man from an investment company who was telling his audience that he regards
Bitcoins as a necessary part of a diversified investment portfolio. I think that
that was a ridiculous statement. It made me wonder if the company for which this
man works is speculating in Bitcoins.
There have been so many good books
written about smart investing and contrasting investment to speculation. I don't
presently see where investing in Bitcoins at this point is anything but
speculation. What investment tools would you apply to computing present value to
the Bitcoin phenomenon? How can you possibly extrapolate today's value of the
Bitcoin forward 10 years? To do so would require a soothsayer, and soothsayers
have no place in legitimate investing.
There is also the problem of
credit card transactions not being available to everyone throughout the world.
Once again, a virtual currency like Bitcoins would solve this problem in that a
would-be credit card transaction could be made in Bitcoins.
It does
appear that the Bitcoin's creator or creators -- we really aren't sure which is
correct -- have realized that a vacuum exists in international commerce, and
that Bitcoins are a way to fill that vacuum. The big question is, will Bitcoins
be a safe alternative to transactions that, though they may take longer, can be
safely made in international currencies that are backed by a central bank?
One of the things that concern me about Bitcoins is that they really
aren't time-tested yet. There are hazards that could undermine the Bitcoin, some
of which haven't even been conjured up yet. These hazards include Bitcoin
wannabes, startups that could conceivably gain a foothold in the virtual
currency market. This type of phenomenon would affect the value of the Bitcoin
going forward.
Another thing that concerns me are the regulatory issues.
In early May of this year,We provide the latest advances in security enhanced
products such as Custom
passive RFID tag, U.S. authorities seized the assets of the largest Bitcoin
exchange. This might be just the beginning of regulatory intervention in the
virtual currency field. The field is ripe for such intervention because it's
new, it's becoming somewhat widespread, and it's operating outside of a central
banking system Unified Server Monitoring: Free Trial. Click here. and outside of
regulatory controls.
My feeling is that virtual currencies will have
some sort of a long-term role in the legitimate world of currencies. There seems
to be a need for a monetary transfer system that can quickly, efficiently and
seamlessly effectuate the transfer of wealth among corporations and individuals.
If I am right, this need will not be denied.
The biggest caveat that I
can think of about this exciting phenomenon of currency creation is that without
a generally accepted overseer -- most likely a governmental agency -- and
without some regulations, we could see a major change in how virtual currencies
are created, denominated and controlled, all without adequate safeguards.
It's important to keep in mind the distinction between investment and
speculation. People who are using Bitcoins as a means to easily purchase a
product are not very likely to get hurt. However, those of us who are using
Bitcoins as an investment should think twice.
Welcome to Shanghai Careel Technology Co., Ltd Web. If you love it,Please buy it! Welcome to China Solar-LED Lighting Co., Ltd Web. If you love it,Please buy it!
Sponsor Ads
Created on Dec 31st 1969 18:00. Viewed 0 times.