Chances are by now you’ve heard all about Bitcoin… but you may not know too much about what it really is.
Bitcoin is a type of digital currency known as a cryptocurrency. It operates on a decentralised peer-to-peer networked program on your computer, meaning that transactions can be conducted between a buyer and seller without the need for any third party oversight such as a regulator or bank. The underlying technology that makes all cryptocurrencies possible is the blockchain.
Bitcoin’s ‘wild run’
Bitcoin’s value has oscillated wildly. It peaked at US$20,000 in mid-December 2017, lost 40 per cent of its value within a week, then bounced back and hasn’t stopped bouncing since.
What are the risks?
Bitcoin certainly has all of the hallmarks of a ‘speculative bubble’ and history is littered with plenty of examples of speculative fevers that ultimately collapsed. Another risk is regulation. Some cryptocurrencies are becoming the preferred medium of exchange for criminals due to anonymity, if governments can find a way to crack down they surely will.
Want to know more?
There’s lots of information now available. Have a chat to your financial adviser who can help you work out if Bitcoin or cryptocurrency, merits further investigation or is worth leaving behind.