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Hesham Rehman

Hesham Rehman is the co-founder & CEO of Bitxoxo – India’s fastest growing bitcoin exchange company. He oversees the business development and brand management functions of the company. His expertise includes finance management, web development, team management, and market research.

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Bitcoins: The Dawn of New Saving and Investment Era

Many startups are foraying into bitcoin trading and joining hands in the beginning of new concept in India.

Dismayed by the unsatisfying returns on cash investments, the working class investors and business owners today are looking for newer investment alternatives for a more lucrative future. With regulations on buying gold and properties, getting more and more stringent by the day and uncertainties lurking over stock markets, a lot of people are turning their head towards the new age crypto-currency bitcoins.

However, prior to delving deeper into bitcoin as a new investment option, let us first try and understand what bitcoin actually is. Conceptualized by a group of hackers, bitcoin is nothing like the regular currencies, which are legal tender notes. Unlike the traditional currencies, bitcoins are paperless, bank-less, state-less currencies, which exist on computers. In short bitcoins do not have any state or regulatory authorities backing it up. The coins are developed by computers solving a set complex math problem and people utilizing their computers to make coins and records transactions are called miners.

Many startups are foraying into bitcoin trading and joining hands in the beginning of new concept in India. However, regulations in the industry are still awaited in the country post which it is expected to become one of the successful startup verticals of all times.

With more than 15 million in circulation, bitcoin has a finite supply of 21 million in the market. Bitcoin supporters claim the crypto-currency to be more stable than the government-backed currencies that can be easily devalued or demonetized by central banks printing money. Experts also suggest that bitcoin's value will only rise over time, with some claiming the price could top $10, 000 a coin.

Despite a lot of inhibitions, bitcoin has grown strongly with plenty of volatility along the way. Substantiating the fact is the bitcoin currency rate, which in the past 12 months has risen from $220 to $575, which is indicative of a return of approximately 161%. The crypto currency has also exhibited immense resilience despite innumerable negative stories around it. However, it is still way below its all-time spike of $979.45, which happened on November 25th 2013. Factoring all of this in, it can be said that investors should approach with caution and that risk has always been a part any gamble and bitcoin isn’t for the faint hearted.

However, other aspects working in favor of the crypto-currency is its acceptance in various countries such as Japan, Germany, Canada, Singapore, Finland etc. have issued tax guidance on bitcoins. Alongside, there are various other countries such Slovenia, Ireland and Israel indicating similar stance on bitcoins. These developments work in favor of the currency, reducing the associated reservations, while simultaneously raising the currency rates, which again makes it a good investment alternative.

In view of this, I recommend investing slow and in small amounts and brace yourself for massive value swings. The rise in its value shouldn’t be construed as a shortcut to becoming rich, as there are no shortcuts.

Apart from its rising value, what is appealing is the lack of regulation. While there are many who are skeptical about the currency, as it has none of the stability mechanism typically associated with a currency, the very reason makes it volatile. This makes bitcoin a very good investment option for long term purpose and not very perfect for short term traders. However, in the recent years the market has experienced good volume of short term traders earning good profits as well.

As far as the safety of bitcoins is concerned, it cannot be hacked, manipulated or altered, what you should be concerned about is the digital wallets, which are vulnerable, similar to any other bank accounts or wallets.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house

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