Did you know that Bitcoins are a lot like other more traditional commodities, mutual funds, and stocks? They are traded with a going exchange rate, just like these other items are! That’s because their value is dependent on the value that others place on them. That’s why there can be massive shifts in the value of Bitcoins over the course of any given day. As of right now, 1 Bitcoin is worth over $800. Not that long ago, Bitcoins were worth over $1,000!
Knowing the ups and downs of the Bitcon exchange rate can help you make the most out of your investment and use of this digital currency. Let’s see how you could benefit from it right now!
Bitcoins Are At Their Core a Form of Cryptocurrency
Although businesses from the Sacramento Kings to the bar down the street are starting to accept this digital currency, Bitcoins came to the forefront of the general public thanks to the efforts of the Silk Road. The Silk Road was an online trading place for black market items, primarily drugs considered to be illegal in many areas, and Bitcoins were the sole currency. Why? Because they are a form of cryptocurrency.
Cryptocurrency is simply a fancy term for saying that the digital transactions initiated through a Bitcoin wallet are scrambled and secure. Much like a good internet security password has over 60 characters in it, these transactions are randomized and encrypted so that no one can just reach out, intercept the transaction, and move your Bitcoins into their wallet.
Exchange Rates Can Benefit or Hurt Local Businesses
The decision to utilize Bitcoins for local goods and services is a tough one, but only if you’re looking to immediately convert Bitcoins into real currency. Because the Bitcoin exchange rate is always fluctuating, you could charge someone 0.1 BTC for a product [rough value $80 at the time of writing], only to find that the next day the value of 0.1 BTC is now $65. On the other hand, it could also go up to $95 overnight. It’s a roll of the dice.
For that reason, retailers who have chosen to accept Bitcoins are actually keeping their own Bitcoin wallets open and utilizing this currency as a form of direct trade instead of converting the currency into cash like a daily batch run for the credit cards. This eliminates the uncertainty of the Bitcoin exchange rate while still opening up business opportunities for customers who wish to primarily use this digital cryptocurrency.
Is Bitcoin Right For You?
If you’re already familiar with the way commodities, mutual funds, or stocks are bought and sold, then you’re familiar with the Bitcoin exchange rate. As with any investment of this type, there will always be a certain amount of risk involved that could cause financial losses. If you think Bitcoin might be right for you, then you may wish to speak with your financial counselor about the pros and cons of Bitcoin right now to see if the investment makes sense.
One this is for certain: Bitcoin is an investment in the global future. Are you ready to be apart of that?