Investing In Bitcoin

I just read an article that stated the CIO of Fortress Investment Group recommended investing in Bitcoin, “Put a little money in Bitcoin…Come back in a few years and it’s going to be worth a lot,” was the statement attributed to the CIO.

I read the remainder of the article as well as the comment section. I often gain a bit more clarity upon reading the comments. Anyway, I’ve now read several articles in which Bitcoin has been mentioned. After reading this recent article, it piqued my interest to the point that I decided to research further.

According to Bitcoin’s introductory video, Bitcoin is the first decentralized digital currency. Bitcoins are digital coins that can be sent through the internet directly from one person to another person (or merchant). Since there’s no middleman such as a bank, the first advantage is that the fees are lower. Other advantages are that the “coins” can be used in every country, that your account cannot be frozen, and that there are no arbitrary limits.

The more challenging part is understanding exactly how Bitcoins come into existence. Basically, people with high power computers “mine” and thereby create these coins. The miners are also involved in verifying the transactions that take place, which are anonymous. The process is more technical and complex than most of us, including me, are going to fully grasp, so I’ll leave the explanation at that.

The first step you’ll need to take in order to begin using Bitcoin is to simply create a digital wallet. That can be done for free and you may use my link to sign up for your own international digital wallet at Coinbase. It took me less than ten minutes to sign up and verify my account to create my own wallet. I found it refreshingly simple. I was also asked to install the Authy application on my smart phone. Again, a very simple process.

Once you have your digital wallet set up and have gone through the verification process, you can begin purchasing Bitcoins. The price of Bitcoins fluctuates depending on a number of factors. If you’re looking for a quote on how much a Bitcoin is worth in terms of dollars, go to Coinbase and click on “Charts.” As I write this article, the current Coinbase buy price of a Bitcoin is just shy of $188 USD. It appears the highest price in terms of dollars for a Bitcoin came on April 9, 2013 when it reached over $234. The value has since leveled off, but began a dramatic upward climb in mid-October of 2013.

I’m tempted to purchase a few coins as a small speculative play. It’s important to note that in addition to the ability to transfer Bitcoin from person to person, there are a growing number of merchants that are accepting Bitcoin as payment for their goods and services. I can’t vouch for its accuracy, but I found this website with a list of merchants that will accept Bitcoin. Supposedly, you can even purchase precious metals using your Bitcoin from AmagiMetals.com.

Whether Bitcoins will go up or down in value over remains to be seen. Personally, if I were going to transfer some dollars into Bitcoin, I’d wait until there’s a dip in the price. I’m not giving investment advice or recommending investing in Bitcoin, but just pointing out that some people are making speculative investments (value may go to zero) in Bitcoins. It definitely is an interesting investment idea. I’ve included several different products below if you’d to learn more about Bitcoin. If you have personal experience with Bitcoin, please share your comments below.

Update October 28, 2013:  I just read an article that Bitcoin ATMs will be installed in five Canadian cities and will allow people to convert Canadian dollars into Bitcoins and Bitcoins in to Canadian dollars. Here’s a video showing the ATMs made by Robocoin:

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2 Responses to “Investing In Bitcoin”

  1. Bitcoin Ticker - InterestingInvestments.com | InterestingInvestments.com says:

    […] install the bitcoin ticker on, search using the keywords bitcoin ticker widget. Since I wrote the article a few weeks ago about investing in Bitcoin, the price has shot up dramatically. I decided to hold […]

  2. […] wrote an article about Bitcoin on this blog about four months ago. At that time, you could purchase one Bitcoin for $188 US. Since […]

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