Is it Worth Getting into Cryptocurrencies?

Is it Worth Getting into Cryptocurrencies?

If you had invested in perhaps the most popular cryptocurreny, Bitcoin, a mere three years ago or so, you’d be smiling right about now because Bitcoin has indeed grown quite nicely in its valuation against fiat currencies. There are many other cryptocurrencies which are fighting for their share of the market, all making use of what appears to be a revolutionary way of making use of the rather simple concept of a publically available ledger, otherwise known as the blockchain.

There was indeed a recent blip in the otherwise upward trend depicted by the valuation placed on Bitcoin specifically, but otherwise this seems to be the future of finance – well certainly in the minds of a lot of people who complete a lot of their trades and transactions online. The main idea is for there to be some sort of independence from the central banking system which largely governs the entire world’s financial system, so if for instance you want to buy something from someone or you want to sell something to them, there is no involvement of the banks and other financial institutions, which means there are no service fees.

What it also means is that there’s no one on the other side who could possibly delay or completely block a transaction between two parties who agree on the terms of the transaction, so naturally one would generally see a future for such technology. I’ll let you in on a little secret too – the blockchain’s use for payment channels such as Bitcoin and other cryptocurrencies has the big players in the financial industry losing some sleep over what appears to be a monopoly on the procurement of money. Cryptocurrencies are definitely seen as a bit of threat to the institutionalised financial sector establishments, but since the value of digital currencies such as Bitcoin is measured against fiat currencies, for now these institutions can rest easy.

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While there’s definitely a future for cryptocurrencies, the burning question is indeed whether or not it’s worth getting into the game at what seems to be such a late stage.

Well, the short answer is yes, definitely, you just have to be a little bit clever about it. Mining is definitely out of the question, unless you’re targeting emerging cryptocurrencies. Even if you team up with other miners to better your collective chances of discovering some new Bitcoins, it’s really getting harder and harder to uncover new cryptocurrencies and the hardware you have to purchase (miner) to start mining is expensive to buy and expensive to operate. It consumes a lot of power and will plough through your data, while you’ll honestly hardly see any success in mining new cryptocurrency units. If you want to take a bet on emerging cryptocurrencies through mining, that alone isn’t enough to justify the cost of running a cryptocurrency miner all by yourself.

The good thing about cryptocurrency miners, if you get the right one that is, is that you can use it for many other purposes related to the fundamentals of blockchain technology. These uses are beyond the scope of this particular post, but all I’ll say is that it has a lot to do with validating “stuff” like transactions and records by way of a public ledger.

At this stage it can still be worth getting into cryptocurrencies however, but either by direct investment or trading, or by pooling your money with investing clubs that specialise in cryptocurrencies. Bitcoin itself is forecast to reach figures of over $1000 per coin unit in the near future, so it’s perhaps worth a punt if you are indeed looking for some short term gains, otherwise it’s still worth a punt if you’re looking towards long-term gains.

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Just keep in mind that there is an originally intended purpose for the development of cryptocurrencies and the blockchain technology they use, which is to decentralise the financial service involved with buying and selling.

Katie

Katie

Finance and Business Blogger at Payday Bunny
Kate is a finance blogger and currently works for one of the big high street banks.In her spare time she likes to educate people on finance and business matters.Married with 3 children she enjoys travel and family time when not in the office.
Katie

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