Bitcoin - a complete uneducated review!

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Let’s start by making it clear that I am in no way jealous of those that jumped on this increasingly out of control bandwagon while the price was still cheap – ok, well maybe a little bit.

No one can doubt the meteoric rise of Bitcoins price as being one of the most surprising financial revelations of this year. It’s been on Heads&Heads radar for some time, however we’ve refrained from getting involved, or advising others on the matter. Because, frankly, we don’t know enough. It’s always looked a little risky to us, and as a risk adverse company it didn’t really interest us. All the value seems to have been built on hype rather than anyone actually understanding what is going on. However, even we cannot deny, it is making people plenty of money at the moment – including a some of our members.

The apparent shakiness of the e-currency was made very apparent last week when £52 million (4,700 bitcoins) disappeared over night. What caused this was a cyber-heist – something which even old sci-fi films did not have enough imagination to believe would exist.

The thing that makes this all the more scary for investors, is that due to the uncharted territory Bitcoin is forging in to, there is no real legislation to protect and monitor the currency. So, if the market place/ Bitcoin miner you are buying Bitcoins from gets attacked, there is no safety net. Your money is gone.

This is not the first time this has happened either. Last year, a Hong Kong exchange went offline after hackers stole nearly 120,000 bitcoins. In 2015, hackers were blamed after 19,000 bitcoins vanished from the European exchange, Bitstamp.

Despite all this the price and demand for Bitcoin continues to soar. To give you an idea of just how quickly its price has risen – in January 2017, the price for a single bitcoin was under $2,000, now it is worth over $16,000. Little wonder people are still being attracted to the fastest growing investment to be seen in a long time. Even more shockingly is the fact that if the value of Bitcoin continues to increase at its current rate, the founders of Bitcoin (Winklevoss Brothers) will see their fortune surpass Mark Zuckerberg by the end of next year.

If you are going to invest, then we certainly aren’t going to stop you! But just keep in mind that this has all the makings of a financial bubble, and all bubbles pop…….eventually! If you need any proof of this, then may I recommend a movie called ‘The Big Short’.