Welcome to the world of cryptocurrency, where millions have been made and fortunes lost. Numerous cryptocurrencies are available, including Ethereum, Litecoin and Ripple, but the most well-known is Bitcoin. You can’t touch a Bitcoin – it’s a virtual asset. Yet one Bitcoin, as at May 31, 2018, was worth $9,802. The current value is at cbix.ca.
First, you open a digital wallet online where you hold cryptocurrencies, make transactions and view your balance. You purchase Bitcoins – or fractions of a Bitcoin – from an online cryptocurrency exchange or from one of over 450 Bitcoin ATMs across Canada. These purchases and all other Bitcoin transactions are recorded with other people’s transactions on a virtual block, like a page in a ledger. When the block is full, new transactions are recorded on the next block in the chain. Through blockchain technology, individual users can make secure, encrypted transactions without a central agency in control.
You can make purchases and pay bills with Bitcoin, but the bigger story is its value as an investment. If you spent $10,000 to buy Bitcoins on January 1, 2017, those Bitcoins would’ve been worth about $160,000 by the end of the year. However, if you spent $10,000 to buy Bitcoins on January 1, 2018, they would’ve been worth about $5,000 three months later. Cryptocurrency is an investment for speculators, not typically for investors saving for retirement. Those who invest in cryptocurrency may be wise to invest no more than they’re prepared to lose.