A few years ago my grandmother came over to my apartment and as we were talking she handed me an article and asked if I knew anything about something called Bitcoin. That was the first time I’d heard of it, so I simply shook my head. After what my grandmother could describe and a brief Google search, I learned that Bitcoin was a cryptocurrency that people obtained by having their computers “mine” data for them. It certainly sounded interesting, and it caught my curiosity, but I was already busy with high school and knew I wouldn’t have time to really look any further into the matter, so I just put it aside and forgot about it. Now, years later, I probably should have put more time into understanding an obtaining this cryptocurrency.
That sentiment is probably one many share or did share up until a few weeks ago. Almost everyone at this point has at least heard of Bitcoin. Even if they know next to nothing about current or recent technology, its impossible to escape the news and not have at least heard of buzzwords such as “cryptocurrency” and “blockchain”. But, many probably don’t know much beyond that. Using Bitcoin as a prime example, a cryptocurrency is simply that, digital currency with no physical form. In the simplest terms a cryptocurrency such as Bitcoin is created by having your computer solve a large amount of extremely complicated math problems, which is called “mining”. Then, whenever a transaction with bitcoin occurs, that transaction is recorded in a blockchain, which can be compared to a massive ledger that records all transactions.
Ignoring the technical aspect, everyone seems to know how valuable Bitcoins were by the end of 2017. Nearing almost 20k a coin, it seemed almost like a miracle. However, very recently the bitcoin has seen a tremendously steep decline in value, proving that it’s not the miracle money maker everyone thought it was. In the end, the currency is akin to a stock, except without a company to back it up. So if a large amount of people decide it’s losing value and start to sell, it’s going to drop, and continue to do so. This is mainly what kept me out of investing the past few months. I knew that it would be too big a gamble considering the limited amount of knowledge I had. In the end, Bitcoin, and other cryptocurrencies like it such as Ethereum, are simply a very volatile gamble that have the potential to earn a profit, but are just as likely not to.
I remember first reading about Bitcoin in high school too, about five years ago. At that point, it was a topic of discussion in one of my classes, and the opinion shared was that it was a scam, and wouldn’t amount to anything profitable. With the media excitement of cryptocurrencies last year, I do think back to what would have happened if I had jumped on board year ago. Its volatility, however, is definitely a gamble that only in hindsight would have been worth taking.