What is Bitcoin?
Bitcoin is a digital currency that allows for transfer of funds from person to person, avoiding a central authority (bank or payment gateway). Unlike other forms of payment, bitcoin isn’t printed, but instead kept stored on encrypted servers that can be accessed through mobile wallets.
The value of bitcoin constantly fluctuates, with 1 BTC(Bitcoin) being worth $5,888.94 as of Wednesday, May 8, but a week ago was worth $5,316.07. As high as these numbers seem, Bitcoin has lost its value over the past couple months, it previously had a high of $9,266.13 in 2018.
Investing into bitcoin is similar to purchasing stock, in which you have to pay attention to the trends to determine whether to withdraw your bitcoin, or to continue riding the risky waves.
Current Trends of Bitcoin
Currently, comparing April 2019 to May 2019, there has been a 13.02 percent rise in the worth of bitcoin, from $4,994 in April to a high of $5,888.94 in May.
During this year, bitcoin has seen a crash dropping the value drastically from 6K down to 3,179.69, causing either people to withdraw their bitcoins, ride the crash, or invest in more as it’s at an all time low
Investors currently recommend to invest in bitcoin, as it’s just past its crash and is on a steady climb to pass $6,000 by the end of this week.
Why does this matter in Real Estate?
There are ways to purchase a home through bitcoin. Some lenders and/or banks may require you to cash out your bitcoin to treat it as a regular transaction, while others might have you use a designated application to transfer and convert the bitcoin over to your local currency. Through investing in bitcoin, there is a possibility of generating that extra income through the steady climb of the bitcon, and withdrawing it when you feel is the appropriate time.
How to Invest in Bitcoin
When you first hear about investing into bitcoin, you either hear the words buying or mining. Viewing our current economy, it is ideal to buy bitcoin using a wallet such as CoinBase with a bitcoin fee of 1.49%, instead of buying bitcoin at an ATM that has high bitcoin fee of 10%. Your decision on how you want to purchase bitcoin will drastically affect the outcome of how much you make. It’s also important to never invest more than you are willing to lose. For example, don’t invest your life savings into Bitcoin as it tends to have drastic changes within a couple of weeks.
As for mining bitcoin, this is strictly not recommended unless you have access to free electricity, and are working at a large scale. Mining is the process of using a computer to constantly solve computational problems which help form the bitcoin transactions. Graphic Cards on Desktops are known to work well for mining bitcoin, which caused a rise in their prices last year, and have recently dropped down to reasonable prices. As tempting as it might be to buy multiple cards and use them for mining, it’s important to know that mining is not free. Your electric bill will have a drastic price increase, and the amount of bitcoin farmed will be lackluster.
Bitcoin mining calculators demonstrate that with Merced’s electricy hourly charge of $0.10 kW/h along with a decent computer that uses 500 Watts and an average terrahash rate of 12 a second, you’d only profit $24.69. That is spending $440.64 extra on electricity a year to make $465.33 in bitcoin. And note that if the price of bitcoin happens to drop, you will instead lose money.
Bitcoin is a form of currency that constantly rises and falls. There is no direct answer that we can give on whether you should invest into bitcoin or not. Our recommendation is that you do your research and start with small investments to gain a better sense of understanding on whether to invest or not. Bitcoin is on a steady climb, and keeping an eye out and playing your cards right can help you make a profit!