Aside from the implications that crypto-digital currencies could in fact be the “next medium” by which institutions, multi-national companies or even nations begin to issue (or “back”) payments in. The reason for this is simple to some – technology is the wave of the future, so one might be inclined to think that something like Bitcoin is in fact part of the wave of the future. At any rate, there’s no denying the logic in that; after all, all one needs to do is take a look at history to see how quickly trends can emerge and mutate to see that there’s real potential here. Perhaps a better question to ask is – will Bitcoin have any real “staying power”?
It isn’t really relevant whether or not investing in Bitcoins will net you the type of short term gains you are lusting after. No, the real thing to focus on is how greatly trading in the emerging currency will spike over the length of its lifetime. Just going on recent data, it becomes clear that some people have done quite well for themselves within the context of Bitcoin investing. For instance, there are plenty of cases where individuals from all across the globe have made fortunes by simply holding onto certain amounts in their respective Bitcoin wallets. There’s a fairly well-known story featured here in the Guardian which details one such case.
Outwardly, it would seem that the big goal with Bitcoin is to gradually pull in more and more investors until the overall value of each coin has become significantly inflated. In essence, the more drive or demand that you create for Bitcoins, the greater the chance that significant gain can be made on short or long-term investments. As with any other type of tangible asset, whether corporeal or digital, one could argue that all Bitcoin is really doing is creating “bubbles” which are then later “harvested” by a certain contingent of holders. Moreover, it’s also sensible to assume that some people are subsequently driven out of Bitcoin after each bubble collapses, having not moved funds beforehand, thereby maintaining or transferring value.
However, perhaps the most pressing issue to contend with when it comes to Bitcoins is that of “frequency”. Specifically speaking, how often are these bubbles going to be created, how long are they to be inflated, and lastly, how many of them will there actually be before the currency itself either changes or collapses entirely? These are questions you need to ask yourself (and ponder on) because there’s currently a lot of disagreement within all ranks about how viable Bitcoin is. For example, some analysts feel that there are only a set number of bubbles that can be created before Bitcoin either becomes fairly fixed in price / exchange value, or completely falls apart.
The simple fact of the matter is that we really don’t know how the Bitcoin story is going to play out because it is essentially an ongoing experiment, a work in progress. All you can really do is diversify as expected and perhaps investigate the emergent crypto-currency on your own terms. Prudent investors will naturally want to have a bit of cash in Bitcoin as well as a vigilant eye on its value. If one plays things correctly in these unique circumstances, fairly large sums can be netted from relatively small investments.