Are bitcoins safe to buy?
I know very little about bitcoins. But two things I do know are:
1) The value of bitcoins compared to the US Dollar has skyrocketed in the last few months: https://gold.net/chart/currency/BTCUSD/
2) The US government seems to be doing whatever they can to eliminate them.
So I was wondering... are bitcoins safe to buy?
Will we probably continue to see huge market fluctuations in their value? Legally, will they eventually be outlawed in the US? Do I run the risk of losing all of my money if I buy some?
Bitcoins are a very speculative investment / currency. Given the amount of appreciation, anyone that has spent a bitcoin probably feels like a Google employee pre IPO that gave away their options.
They are safe to buy from reputable folks - any too good to be true offer is probably a fraud.
Other than the novelty or speculative investment / collection, I'd stay away. Bitcoins aren't going to be outlawed - perse - but they are trying to find ways to monitor them as they are being used for tax avoidance and other illegal activities. Feds don't care about bit coins used for pizza.
I think the biggest issue with bitcoin value going forward is going to be regulation as an approved currency. I don't think the US wants to eliminate them, I think the US wants to regulate them. There is money to made there and I think Uncle Sam wants a piece.
As Johnathan points out, a reputable source for bitcoin is safe, but watch for fraud.
As Mary-Alice points out, "official" steps are already being taken to remove bitcoin's "rogue" currency status. Part of the value of bitcoin is its relative privacy (similar to cash) and the lack of bank interference (no fees or the like to qualify for it or use it). If the US decides to start regulating bitcoin, then value will most likely drop precipitously.
Bit coin for the average Joe is going to be a speculative investment. The chances you would ever actually use bitcoin are slim considering Walmart and the like don't take it. But if that changes, while your ability to use it grows, the value decreases.
In my mind, bitcoin is like day trading penny stocks. The fluctuations are huge and you have to keep a close eye on what is happening to profit. The big difference is that unloading bitcoin in a crash may prove much more difficult than unloading a pumped stock on the way down before you lose your shirt. Still the lure of big returns makes it very attractive.
IMHO they are about as safe as crossing a busy street with your eyes shut. All those bandwagons!
Did you know you can generate your own bitcoins?
I'd treat bitcoins like any bubble economy. All you have to do is figure out when the bubble is going to burst.
Great question. I know the US Senate confirmed it is a legal form of currency. That said, there are a lot of discussions starting around how to regulate it. For example, institutions trading in bitcoins need to comply with anti-money laundering laws, but how this will be enforced will be interesting to see. Also, how will various tax laws apply and be enforced? My guess is this is a risky investment, but am interested in hearing what others think.
I would not buy it. Safe to buy? Relatively yes. Once you have it though, you can't convert it to cash, you can only sell it to other bitcoin buyers. Bussiness Insider had an article claiming that bitcoin value is now at 700 USD, but it fluctuates easily like a heartbeat. There is even another bandwagon rider, called the Litecoin and trying to cash in from all the speculative propaganda being run to make bitcoin valuable. Litecoin on the other hand has another angle:
Once the taxes and regulations move in, the value will fall like apples on top of Newton's head.
Bitcoin is like the Emperor's new clothes.
Litecoin is like the Emperor's imaginary friend's new clothes.
Bitcoin owners claim they lost thousands and even millions of bitcoin and there is no way to trace or take it back.
Waiting for the bubble to burst.
Here is a link to an article I read recently on the subject:
I hope it will help answer you question.
No. They are like being part of a barter bank. Great idea until you realize that the conversion fees to buy and sell are far more than a credit card processing fees and you can't readily convert your barter dollars to cash. With cash, it isn't a problem.
I regard Bitcoins as similar to junk bonds and penny stocks.
Bitcoins featured in wired magazine
this may help you clarify your doubts
When Bitcoins only developed as a currency and handing out free 5 pcs for registering on the site, even if I got those first 5 Bitcoins. After half a year, they began to rise sharply in price, and I realized that I needed to buy more. Now I'm always in control of price changes on http://mining-profit.com/bitcoin and say that after a sharp fall will be a sharp rise.
I am writing a lot of educational material and information about Bitcoin regulations in each country (including i the US) . and i can tell you that Bitcoin is here to stay. Many countries have welcomed Bitcoin including Switzerland, Sweden, Singapore, Iceland and many others. For the most part most countries institute regulation which usually consist of KY C (Know Your Customer) policies when you sign up to a cryptocurrency exchange in order to buy Bitcoin or any other coin.
You can find a lot of information on Bitcoin at bitcoinprice.org