Bitcoin has been attracting a lot of attention among investors and financial experts, good and bad. In this short article, we will introduce Bitcoin for people who haven’t been following its development closely, and will also help you decide if it’s a good investment.
Bitcoin was created in 2009 by a computer hacker working under the name Satoshi Nakamoto. The creator wanted to create an alternative to traditional currencies backed by national governments. Instead, a community of computer users would “mine” Bitcoins using their computing power and the currency would be managed using a peer-to-peer network.
So is Bitcoin a good investment? We’ll put it this way: don’t go and take out a second mortgage on your house or risk your child’s college fund to invest in it. That being said, if you have a bit of money that you want to park in a high-risk investment so you can cross your fingers and wait and see, why not?
Bitcoin has suffered a lot of setbacks. The Chinese government went from supporting it, to cracking down heavily on it. Millions of dollars’ worth of Bitcoins were stolen when the massive Bitcoin exchange Mt. Gox was hacked. The U.S. government has rejected its status as a currency, at least for tax purposes.
Still, more and more companies are accepting it. Online retailer Overstock.com accepts Bitcoin. The Dish Network is putting a system in place to accept it. Meanwhile, the American government has acknowledged that while it may not be a currency, it is at the very least a valuable property worthy of legal protection. If Bitcoin does take off and you happened to have park a small amount of money in it, you could stand to create a lot of profits.