News Question of the Week: Buy Bitcoins – Does It Make Sense?
Friday, 26.05.17 , written by Annabell Meyer Bitcoins are currently on everyone’s lips. Because the Internet currency has gone through a rapid rise this week alone. For our editors the reason, the virtual money once more to get to the bottom. We’ve collected what Bitcoins are all about and how to get
The value of bitcoins is currently rising rapidly
Bitcoins are currently enjoying a special high and the hype surrounding the digital currency is huge. While the virtual monetary units at the beginning of the year were still worth less than 1,000 euros, the price for a single Bitcoin is now around 2,210 euros or more than 2,470 dollars. Within the last month alone, the value of bitcoins has increased by about $ 1,000 .
Meanwhile, Japan has recognized digital money as an official form of payment and the US Securities and Exchange Commission is apparently on the verge of introducing a Bitcoin-based index fund . Both should be part of the fact that the Bitcoin course is currently going through the roof. But despite the current positive development, bitcoins are also threatening investors.
Update August 10, 2018: Even after the split in Bitcoins and Bitcoins Cash, the price is at record levels. Interested parties should not be blinded by it. The cryptocurrency is subject to strong price fluctuations and generally vulnerable to hacker attacks. If you are looking for a certain degree of security when investing your money, you should consider stock funds better. The returns on investment are shown by the investment comparison calculator.
What are Bitcoins?
Put simply, bitcoins are virtual money. The first bitcoins were already created at the beginning of 2009. At that time, they were introduced in response to the global financial crisis. The basic idea of the digital currency is to find a means of payment that is independent of banks and governments . Unlike the euro or the dollar, the value of bitcoins is not linked to other currencies and their price performance, but merely depends on supply and demand. The number of available bitcoins is limited by a mathematical formula. This means that at a certain point in time no new bitcoins can be generated anymore, which should drive demand even higher.
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How can users buy bitcoins?
Interested parties can either buy bitcoins by exchanging them online for real money via special exchanges, or even create or “mine” them on their own computer. Bitcoins are generated by solving highly complex mathematical equations . For this, however, users need a particularly powerful computer. The created or acquired Bitcoins are then available in a database, to which customers have access via an individual security code.
In order to use Bitcoins, customers need to download a specific piece of software, with which the virtual money flows into a digital wallet. From this, products in various online shops can ultimately be paid for virtually. In “real” local trading, only a handful of businesses accept the digital currency.
What are the risks of Bitcoins?
Like real money, bitcoins can also be stolen, because the corresponding databases can be hacked due to security gaps. One of the main criticisms of the Internet currency is that it is often used for criminal activity . Thus, the payment methods for bitcoins are hardly comprehensible. For many criminals reason enough to use bitcoins in the so-called Darknet for the acquisition of illegal goods such as weapons or drugs.
Financial experts also warn against strong fluctuations in the Bitcoin price. So it was at the beginning of the year still under 800 euros and has now rocketed. However, he can crash again just as rapidly, emphasizes, for example, the market research institute Sentix. The Bundesbank describes the trade in bitcoins as pure speculation business , with the utmost caution is required. For a security investors have when buying Bitcoins rather not. Therefore, you should not rely solely on the current high price, but think carefully about their investment. Investors who are not sure about Bitcoins or who are not just looking for quick money should look for an investment that promises long term success and provides a little more security.
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