What is the role of the Internet in terms of financial instruments like the buy-sell exchange or Forex? If you have no idea what this term means then ask yourself: “What is the Internet?”, and you will get an answer. The Internet is a technology that allows people to access each other and enables the easy transfer of information.
The Internet is basically a worldwide network of computers, allowing people to post data and ideas to be read by other people all over the world. You might think that this is a very simple concept, but anyone who has ever tried to make a website advertised something on the Internet or even sent an email could easily see that it is not as simple as it seems. Just imagine trying to design a new website, or create a press release for an important business transaction in Pakistan, or Nigeria. You need a team of specialists, hundreds perhaps, who will be required to take your vision and turn it into a reality.
Designing a website, putting a new product out there, or even sending an email involves moving information from your desktop computer to a computer that is linked to the Internet. You could access this computer anywhere in the world, at any time. Of course you could use your local phone line or your laptop computer, but where would you go to find the time, the money, and the expertise needed for such a task? This is exactly how the World Wide Webworks. There are numerous other reasons as well to use the internet beyond this example.
The first reason is simply security. If the Internet was available to all of us today, it would be an embarrassment to use it, and criminals could easily break into our computers. But because the Internet is available to a limited number of people who are connected to the same network, it provides an excellent means of communication and information exchange. You can send a message to another person across the world within seconds. In addition, if you want to send information back in time, you can do so as well.
But beyond these practical considerations, there is a much larger philosophical issue that should be considered before someone starts asking “is bitcoins a good investment for the future?” Is this the end of the road for the human species? What will happen to our personal freedom and the nature of human relationships in the global community of traders starts collapsing? Will humans lose their ability to understand the value based on price and effort and become irrelevant as a competitive entity? These are questions that economists have been debating for years now. And while they may never answer them completely, their arguments do provide an interesting baseline from which to consider the future.
Perhaps the most fundamental argument for investing and buy bitcoins is that it allows us to be freer with our money. With paper currencies such as the US dollar or the Euro yielding near-zero interest payments, it has become impossible for average citizens to accumulate substantial wealth. Because of the volatility in financial markets, even the most disciplined investors are often left holding the bag. By contrast, the value of bitcoins is virtually static over time. This gives the individual’s room to make investments that yield better returns than those offered by traditional banking institutions.
Another fundamental question that you should ask yourself when asking “is bitcoins a good investment for the future?” Relates to your understanding of scarcity. The basic model of economics suggests that in order for any economic system to be sustainable, aggregate demand should be balanced by adequate supply. If the demand exceeds the supply, prices will rise and so will the economy.
Bitcoins are difficult to mine. Only holders of large amounts of virtual currency can enjoy this benefit. As such, most users will invest in large blocks of the digital currency as they fear that the price of one bitcoin is likely to increase in the foreseeable future. Nevertheless, there is a strategy that you can use to minimize your risk while finding that your investment yields a high rate of return. The best plan of action is to use a service that will “mine” the currency for you. This will free you from having to spend time learning how to mine your own coins and instead let a professional do the job.