Not many of us know, but modern accounting finds its roots in the land of pizzas, Italy. Luca Pacioli, an Italian mathematician is regarded as the modern accounting and practices. With the passage of time, this accounting has evolved itself to the needs of economies and banks. Since the arrival of the computing and internet, accounting has virtually shifted itself to the smart binary codes.
Double accounting problem: Known to almost all, the double accounting problem has been a consistent bugger to the process. It not only creates a misunderstanding of the accounting process, but is also causing a lot of problem in the internet transaction systems.
Recently, Bitcoin, a blockchain based cryptocurrency has been regarded as a solution to the problem, but does it really have the potential to take our investments and reap safer and huge returns for us? Is Bitcoin the investment to the future?
This is one of the most important questions when you are listening from 100’s of people about bitcoins, about investing in Bitcoins and much more. Bitcoins are now a new trending topic in the Newsrooms, social media, and in general conversations. So basically let us look what exactly are Bitcoins.
Bitcoin is a cryptocurrency and hence is a digital payment system. This was basically invented by a group of programmers bearing the name Satoshi Nakamoto. Back in 2009, it was an open-source software. This actually works on peer-to-peer transactions without any intermediary. Hence, you can sell this currency to anyone and hence is just like the money you have in your hand regardless of the country you are in.
This currency is verified by different network nodes and is noted down in a distributed ledger which is public to all. This is basically known as Blockchain. Bitcoin turns out to be the first decentralized digital currency. Bitcoins earlier was used to exchange for products and services in black markets. As these can be exchanged for real world money.
As the Bitcoins are the new trend, hence we must actually see and get to know some of the risks involved in investing in Bitcoins before actually going and investing in it straight away. But first, let us have a look on how does Bitcoin work.
When you go to buy a Bitcoin, it will first generate a bitcoin address, which you can create more whenever you need one. These addresses are only for one-time use, rest is the same as what we saw in the email ID concept. The Blockchain, i.e., the shared public ledger, which is the main thing on which the whole Bitcoin network relays. The confirmed transactions are entered into the block chain. The Blockchain is enforced with cryptography, hence is really tough to break.
When we do a transaction, the value transfers from wallet to wallet through the block chain using a data called the private key. This private key is used to sign transactions. This signature also is used to prevent the transaction from being misused, and loss of money.
Should We Invest in Bitcoin?
Now coming to the main objective i.e., should we invest in Bitcoins or not. Now the first thing you have to think about is that, you need to invest thinking that you will get an increase in the value in the future and hence it will be beneficial or want to invest in a Bitcoin based investment company.
Now if you are going to buy Bitcoins and hold them, so when they get a bit of a hike, then you can sell and make some money or profit out of it. Then you need to keep these points in mind, before going ahead and buying them
- The first and the most important thing, you must keep in mind is never invest the money that you will need in future, i.e., always invest the money that you can lose. Bitcoins investment is one of the riskiest investments and hence this turns out to be the most important point for the Investment plan.
- You must always use a wallet to store the Bitcoins and doesn’t leave them at the exchange itself. Most of the times people will recommend using a hardware wallet, but sometimes due to some or the other money problems, you can also go with a paper wallet.
- Before investing and buying from a place which is having the bitcoins at a cheaper rate, always look about its reputation and validations, as when something hikes, many of its fake alternatives come in order to look for some free bucks.
- What if when you are thinking about a major investment into Bitcoins? If you are thinking to buy around 7-8 Bitcoins then you must not go and buy them in bulk, but actually buy 0.05 – 2 Bitcoins weekly. This is something as the Dollar cost averaging scheme. Good part is that Bitcoins can be bought in decimals too.
Now if you are looking to trade these bitcoins, then it is a bit of different concepts. This will not be as taking the bitcoins holding for around a year and then selling. It will be like buying at a lower price and then trading at a higher price within 7 – 10 days. This requires pure practice and knowledge at your own level, hence there is no personalized tips and tricks for this kind of trading of bitcoins.
If you are a newbie then you are at risk because thousands of large players are there who aims at such people, and then make money out of their armature-form. You can also invest in Bitcoin companies to grow the bitcoins. But this is the worst way to lose your money. There are many websites which claim to double your money, and we might fall for it because there are referral programs and many others with which we might think that they are for sure original, and can help us have a better return. But after the age of around 8 – 9 Months these websites go down, and you cannot track them. Resulting in a huge loss of many peoples.
These are some of the precautions you can take while you are having some good amount in your bank account, and you need to test your luck out of the same, and that is the point when you can actually invest in the Bitcoins and keep, which can be advantageous when you will sell them in future. You are the only one who can answer this question, but we have helped you by giving some of the tips, do comment if these tips helped you, and you resulted in some profit or loss via this.