Should I Invest in Bitcoin?

Over the past few months I have watched bitcoin’s value rise exponentially. I had no idea what bitcoin was and never even heard of crypto currency a few months ago. But with the recent government and media attention crypto currencies have received, they have gotten everyone’s attention.

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Crypto currency or more simply digital money is gaining acceptance quickly all over the world as it makes transactions quicker and cheaper. These transactions are secured by cryptography and each transaction has its own signature or private key signal cryptocurrency. With its rise in value and popularity everyone wants a piece of the action. There are two main ways to make money with bitcoin. The first is a pretty straightforward method of purchasing the coin as an investment and hope that its value increases. The second is the process of “mining” bitcoins. Once a transaction has occurred they are then verified over the network by “miners” using complicated algorithms. As a reward for their work they receive transaction fees and/or freshly minted bitcoins!

From an investing standpoint there is a big risk/reward factor as this currency is relatively new and has no intrinsic value causing volatility and big price changes best paid crypto signals. A positive fact is that there is a huge amount of money invested in this and companies are signing on to use this currency so we have no idea when its value will go back to zero!

“Mining” also has a big risk/reward factor. In the beginning of bitcoin, you used to be able to “mine” with an ordinary laptop or home computer. But now as more people are doing it the difficulty and power needed to “mine” increases. Bitcoins have a maximum amount that can be minted (21 million). And as we get closer and closer to 21 million the amount of bitcoin rewarded for each successful “mine” gets smaller and smaller. Now “miners” looking to be profitable have to invest in complicated high tech mining rigs and there is still no guarantee they will be profitable or even make their costs back.

There is a third and safer option, though. In any sudden happening that promises riches the most lucrative venture is selling the tool that helps produce these riches. For example, in a gold rush it would be the shovel and in “mining” for bitcoin it would be mining rigs or powerful graphic cards. If you can produce these or even get your hands on some cheap you would make a considerable profit flipping them. Unfortunately, only a select few have the luxury of choosing this option.

What is the future of Dogecoin, now that it has been around for several months and we’ve seen wild fluctuations in prices? Can Dogecoin survive and thrive and make a niche for itself within the crypto-currency space or is it doomed to oblivion?

To answer where the future of Dogecoin lies, we first need to look at what makes Dogecoin special and why it is in the top 10 market caps in the first place. On the technical side of things, Dogecoin is another Litecoin clone with different parameters, so it cannot sustain itself based on technical innovation. So what makes it popular in the first place?

Dogecoin started as a meme-based joke currency but everything around it took off and today it has a huge community of supporters around it. It is this community that Dogecoin needs to leverage in order to be relevant in the future. That is Dogecoin’s most important strength, without which, it doesn’t stand much of a chance in the brutal world of crypto-currencies.

What made Dogecoin special was that people didn’t take it very seriously, and so it became an incredibly popular tipping tool on Reddit and the rest of the internet too. Then there were many projects started by enthusiasts around Dogecoin, and people felt safe experimenting in this sphere. Dogecoin therefore has value as long as it can sustain this concept of being a safe experimentation haven while being generous.

The future of Dogecoin will therefore depend on how this community bands together and works on future projects that will benefit the currency. There are many works in progress and it is hard to judge their feasibility in the real world. However, the community needs to remember what makes Dogecoin special and not let that slip away because competition in this space can be fierce.

Dogecoin also did a lot of newsworthy things like funding an Olympic bobsled team and other charity work. This gave it a lot of attention and also a nice increase in price. However, now that the news cycle has died down, the price of Dogecoin is also steadily coming down, from a peak of 220 odd satoshi to under 130 satoshi. This will probably fluctuate, but you get an idea of where things are headed. Dogecoin community needs to take more initiatives around this currency and make sure it still remains relevant and newsworthy for both the short term and the long term

Categorized as Tech

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