I mentioned a while ago on my blog that I spent $800 NZD on Bitcoin. I bought in when the rate was $580 per coin. It probably wasn’t the best time to buy because shortly after I bought the price dropped for about a month and I started to wonder if I’d made a horrible mistake.
I held onto it though and was never really worried about it because Bitcoin is something I believe in. The other day the price rose to $740 per coin so I sold my 1.379 Bitcoins for a total of $1010, making a $210 profit. I was pretty happy with that because it was passive income. $210 isn’t that much compared to how much I made in May, but it will make a small difference in my life, especially now that I’m thinking of paying back my $30,000 student loans as soon as possible so I can become tax free legally.
I thought I’d answer some questions on my blog about Bitcoin for those of you who are interested!
What is Bitcoin?
Basically, my understanding of Bitcoin is that it’s a cyprocurrency. It is “mined” online by computers, and the mining gets harder and harder as more people get involved. It is quite hard and slow to mine a Bitcoin now, which means they cannot just be limitlessly created. At present, there are over 50,000 stores that accept Bitcoin online. Bitcoin ATMs are cropping up in a few places and Facebook as well as Amazon have mentioned applications that would allow Bitcoin to be used as a payment. It’s very exciting times.
What Are the Benefits to Bitcoin?
For me, personally, as someone who uses Paypal a lot and gets stung pretty heavily by the 4% fee – I think I paid about $800 in fees last month from my income alone, I see a lot of potential with Bitcoin. If I could be paid in Bitcoin, I could avoid all of those nasty fees and probably get a better currency conversion rate. Bitcoin is also non-traceable which is good and bad… it’ll probably prove quite popular with drug dealers looking to keep their transactions private and not have hoards of cash around their house. It’ll also be quite handy for sending gifts etc to people overseas.
How Did I Make Such a Good Return With Bitcoin?
Basically, the market is really volatile, which makes it a pretty risky investment. I see the potential in Bitcoin so felt confident buying at $560 and holding until it reached a decent price. For me, $800 isn’t really a lot of money so I was comfortable “Risking” that amount. If you’re looking for an investment and planning to use your life savings, I’d suggest going with something a lot less risky.
Would I Buy More Bitcoin?
Sure, when the price drops a bit. I imagine eventually, when more people start to use Bitcoin as an international currency, the price will level out and be a little more predictable. For now, it is very up and down. I’ll wait until it drops down to buy and because I sold my Bitcoin at $740, I really doubt I’d buy it for a lot less than that price.
Have you ever bought or used Bitcoin? What was your experience?
Please bare in mind that this is all my personal opinion and experience and is in no way professional advice. Please do your own research before investing in anything.