The answer: It depends…
Deciding on an investment vehicle should first require an understanding of what the investment entails, its pros and cons, what the potential upside is for you, and in what marketplace one is investing.
Cryptocurrencies evolved from the birth of a new financial instrument, known as Bitcoin, that came into existence less than one decade ago. The industry has evolved into one with a current market cap exceeding $100 billion.
Since the introduction of Bitcoin, other cryptocurrencies have evolved, and are also available for mining as an investment vehicle. Bitcoin itself is still a concept that is unfamiliar to many. It is important to understand what Bitcoin is, how Bitcoins are created, followed by what is a Bitcoin or Cryptocurrency Mining Contract, and how it is similar in concept, to other financial contracts that are more familiar to you.
What is Bitcoin (Cryptocurrency)?
Bitcoin is a new asset class, created in 2009 by an unknown person using the alias, “Satoshi Nakamoto”. The goal of the creation of Bitcoin was to create a decentralized form of “virtual currency” that can be used by anyone for peer-to-peer financial transactions. Transactions are made with no middle men, such as banks or Visa/Mastercard clearing houses. Transaction fees for Bitcoin are minimal and there is no need to provide any kind of ID for a successful exchange of “money” to occur. Since the creation of Bitcoin MANY first-adopters have become millionaires. Bitcoin is currently trading at around $2,700 USD. Many experts predict Bitcoin can exceed a valuation of $5,000 in 2017. World-acclaimed, Venture Capitalist, Tim Draper predicts Bitcoin will tip the scale at over $10,000 by 2018. The next one following in Bitcoin’s footsteps, in terms of appreciation and acceptance, is Ethereum. Ethereum was valued at $30 in January 2017. Today, June 12, 2017 it is valued at over $400!
More and more “We Accept Bitcoin” or “Bitcoin Accepted Here” signs are being seen in retail outlets. More merchants are beginning to accept Bitcoin, as demonstrated by the image below.
In Japan, more than 100,000 retail outlets gladly accept Bitcoin.
In the last 2-months, Arizona, Illinois, Nevada, Montana and New Hampshire have all enacted favorable rulings regarding the use and acceptance of Bitcoin in their states. Steve Bullock, the governor of Montana recently approved a $416,000 grant for a Bitcoin Mining farm in the town of Missoula, MT. Countries, such as Japan, Norway, Mexico, Singapore, Australia, China, South Korea, and others have all begun integration of Bitcoin into their monetary system, alongside their fiat currency.
Last year, Canada became the first country to install Bitcoin ATMs. Since then, Europe has installed over 5,000 Bitcoin ATMs, with more to come. In the United States, Florida and California are in the forefront of Bitcoin ATM machine installations.
You can purchase anything from computer services, to pizza, real estate, a Tesla car, a Subway sandwich, airline tickets, women’s lingerie, or even manicures with Bitcoin. Amazon.com offers a 5% discount for any purchase made with Bitcoin.
You can purchase and sell Bitcoin at Bitcoin ATMs, or on exchanges, just as you would when exchanging foreign currencies. And, to make your purchases, you can access your Bitcoin with a Bitcoin Debit Card.
As Ethereum continues to increase in value, it too is destined to join Bitcoin in overall acceptance.
How are Bitcoins and other Cryptocurrencies Created?
For purposes of this discussion we shall discuss Bitcoin, but please know that Ethereum is also mined in the same manner, so the term is being used interchangeably. According to Bitcoin Wiki “New bitcoins are generated by the network through the process of “mining“. In a process that is similar to a continuous raffle draw, mining nodes on the network are awarded bitcoins each time they find the solution to a certain mathematical problem (and thereby create a new block). Creating a block is a proof of work with a difficulty that varies with the overall strength of the network. The reward for solving a block is automatically adjusted so that, ideally, every four years of operation of the Bitcoin network, half the amount of bitcoins created in the prior 4 years are created.”
Theoretically, anyone can mine Bitcoin. All that is needed is a computer. During its early stages, mining “geek” enthusiasts did just that – they mined their own Bitcoin at home. In fact, many a Bitcoin millionaire has been created in this manner. As time has gone on, solving the mathematically complex equations, has become more difficult, necessitating more and more computer equipment. These computers are very noisy and give off a lot of heat, since they are all simultaneously, busily working 24/7/365. Consequently, mining at home as a hobby, has become less profitable or attractive, which has given rise to a new industry – Bitcoin Mining on a massive level.
To describe a Bitcoin (Cryptocurrency) Mining Contract, it is best to compare it to a more familiar financial instrument: An annuity. An immediate annuity is a promise to pay, on a contract basis, with an insurance company that provides you an immediate fixed monthly income, for a previously agreed upon, period-of-time. “For this promise to pay, however, you must sign over all the money you have deposited in the annuity to the insurance company, with full knowledge that you will never be able to touch it again, apart from receiving the monthly income.” http://apps.suzeorman.com/igsbase/igstemplate.cfm?SRC=MD012&SRCN=aoedetails&GnavID=20&SnavID=29&TnavID&AreasofExpertiseID=107
Insurance companies can pay you an immediate stream of income because they invest your money with the objective of earning a profit. In turn, they share a portion of that profit with you in the way of a fixed monthly stream of income.
A Bitcoin (Cryptocurrency) Mining Contract is similar in that it too provides you with an immediate stream of income, under a pre-agreed upon contract, in exchange for purchasing the contract. The mining company generates its revenue by operating Bitcoin mining farms, full of high-powered computers, whose job it is to solve complex mathematical equations that are used to generate units of Bitcoin currency. Miners are awarded Bitcoin for their job of verifying and validating the transfer of funds within the international Bitcoin community.
With Bitcoin (Cryptocurrency) Mining Contracts, you receive a stream of income based on the daily profits generated from the mining efforts of the company, as described above. Unlike an annuity, where you receive a fixed monthly income, daily profits with Bitcoin (Cryptocurrency) Mining Contracts are additionally determined by the value of Bitcoin on any given day. As Bitcoin rises in value, your daily profit reflects that rise. Conversely, as the daily value dips, your daily profits also reflect that dip. Currently, Bitcoin (Cryptocurrency) Mining Contracts range from approximately 10% to over 15% per month in profits, depending on the company. This percentage DOES NOT account for the daily value of Bitcoin, which can result in greater daily yield.
As an example, my husband purchased a Bitcoin Mining Contract with one of the premier international Bitcoin mines, on March 16, 2017, when the value of Bitcoin was $900+/-. At the writing of this article, Bitcoin is valued at around $2665+/-. Not only has my husband earned daily profits over the last three months, based on his “contract” rate of return, but because the value of Bitcoin has appreciated, he has enjoyed daily profits that far exceed the “contract” rate of return of his investment. In fact, when you calculate his rate of return from his contract, and add the increase in value of Bitcoin over the last 3 months, he has more than tripled his investment – in less than 3 months. The Bitcoin Mine he chose offers lifetime contracts (of course, for as long as mining remains profitable), so his initial investment has already been more than paid back, and all his daily earnings are now pure profit.
As with any investment, there is a risk/reward ratio… it is up to you to determine your risk/reward profile. Do you believe Bitcoin (cryptocurrency) is on its way up, and here to stay… and do you agree with the experts that Bitcoin’s value will likely increase? Whether you are seeking an additional stream of income to augment your current monthly income, you seek to increase and diversify your investment portfolio by purchasing Bitcoin with your daily profits, or you seek to develop a larger stream of income over time, by reinvesting all or some of your daily profits, a Bitcoin (Cryptocurrency) Mining Contract may be a great adjunct to your current financial strategy.
For more information on Bitcoin (Cryptocurrency) Mining Contracts, and to get you started with reputable Mining Companies please visit: http://bitcoininvestment.news
Co-Founder, Bitcoin Investment News
Dislaimer: This is not investing advice, this website is for educational purposes only.