How does bitcoin or other cryptovaluta work?
Some time ago we invested, just a bit, in bitcoin for our first time. We had for a long time been doing some research, trying to figure out how it actually works. Without a lot success, we guess. Bitcoin had increased a lot for a long time, and we finally decided to give it a try. We already knew that we would loose some money at first by investing (which was already annoying), but then, within a few hours we had lost almost half of our investment as bitcoin decreased much more than it had been doing for as long as we started our reasearch. Bad luck indeed!
Anyway, the big question is now:
Can someone explain for us a bit about how it actually works in an easily understandable way?
- Is it possible to predict, at least a bit, how it will develope?
- What affect the value the most?
- Which cryptovaluta seems to be the best one to invest in?
- What is the reason for bitcoin to be so up and down at the moment?
- Any ideas about how bitcoin will develope the coming time?
- Something else that could be interesting to know about bitcoin and other cryptovalutas?
We hope for a lot of good answers while sitting here waiting for a bitcoin boost!
-Nina&Hans-
Yes it's possible to predict.
I don't think you should invest in BitCoin at all if you don't understand how it works. People who invest in things because their price is rising is always doomed to lose their money in the end. There are two main reasons for investing in things. Either the asset invested in can convert the capital brought in into production (giving you long-term profits), or you deem the asset undervalued. It is the last mentioned quality that makes serious entities invest in cryptocurrencies. But for now, cryptocurrencies has value because people are willing to buy. And they are willing to buy because they think others are willing to buy at a higher price. This investment strategy is unsustainable, and will only work as long as there are people stupider than you who also have money. They run out.
If you intend to read up on investment and if you can see some inherent value of BitCoin (I do not, therefore I am not invested) I advice you to continue investing. If you do not... Well, since you are already invested, and there seems to be a lot of stupid people with money these days, hold on for a couple years, and sell at a profit (don't get too greedy, or you will lose it all). But I strongly advice you not to further invest, do not speculate. That is gambling!
An interesting topic that was well done is supported by a vote