Bitcoin: never a good idea?


Bitcoin currency. Photo courtesy of


By Joseph Marasciullo
Staff Writer

Back in 2008, an anonymous man by the pseudonym Satoshi Nakamoto envisioned Bitcoin, an unmoderated payer-to-payer digital currency. By 2009, Bitcoin was established to have a value of less than one penny, and now, nine years later, bitcoin is worth approximately $11,000 (with some wild price fluctuations).

Just this year, Bitcoin has seen some serious highs and lows. Bitcoin began this year valued at around $1,000, and would eventually grow to its peak all time value of $19,783 on December 17, before falling drastically to $13,000 just five days later. With a value that can climb thousands in days, Bitcoin would seem to be a gold mine. But is investing in an intangible, unregulated, and volatile piece of cryptocurrency really a good investment?

A huge problem with the current state of Bitcoin is its illiquidity. Once you put your money into bitcoin, it’s extremely tough to take it back out. It can take up to four hours for a Bitcoin transaction to get approved, since it must be verified by six separate Bitcoin miners. For the uninitiated, Bitcoin miners are people who use their computer’s processing power to generate Bitcoin. When the market crashes, the timing lag exacerbates the issue, with investors losing thousands of dollars waiting for the system to let them withdraw.

Another problem is the prevalence of transaction fees, which hurt smaller investors. A normal fee for a Bitcoin transaction, whether a transfer or a withdrawal, is around $20-25, regardless of how much money you’re sending over. Users are also required to link their bank accounts to the Bitcoin selling services, which are not always trustworthy

Bitcoin itself is only the tip of the cryptomarket iceberg. There exists more than a thousand publicly traded cryptocurrencies, trading online for as much as thousands of dollars or as little as less than a dollar. Most may not ever reach Bitcoin status, but some have grown in value over the past year alone (including Ethereum and Ripple, which have both seen considerable price spikes.)

Both Ethereum and Ripple promise to improve upon the lackluster illiquidity of Bitcoin through more reliable purchasing methods. Bitcoin, in the same vein, seeks to do this through ‘Bitcoin Cash,’ a separate offshoot with improvements to reliability and speed of transactions.

Bitcoin is an investment by nature, and a very volatile one at that. The value of a single Bitcoin is only backed by its scarcity, and the market is extremely sensitive to massive influxes and outflows of the currency. Cyber thieves are also a huge problem, with more than $70 million being stolen last month alone through mining of websites such as ‘NiceHash.’

Bitcoin itself is too outdated, too vulnerable, and too volatile to recommend as a serious investment opportunity. Buying Bitcoin should be viewed as gambling: go in with a set amount of money you’re willing to lose.