Thinking of investing in bitcoin? You might want to think again.
The first rule of investing is – don’t invest in something you don’t understand.
Bitcoin is a bunch of computer code that its backers insist is worth “real money.” Yet, the currency is literally backed by nothing at all. There is no government nor really any financial institution that stands behind this “currency.” Yes, there a bunch of speculators, idealists and, frankly, criminals who insist it is a valid currency. Yet, its value against the world’s hard currencies swings wildly (which simply reflects demand for bitcoin). Finally, do you know any place you can exchange your bitcoin holdings for a loaf of bread, college tuition or a new car?
If some “financial advisor” starts talking about bitcoin being based on “blockchain” technology – this is also just computer code. It's not magical.
Remember, if you don’t understand it, it's probably not smart to put your money there. Just ask the people who didn’t really know how the internet functioned back in the 1990s and dumped their savings into dot-coms that went bust.