Bitcoin An Alternative Investment

According to bitcoin news site CoinDesk, 2014 venture capital has flooded the bitcoin ecosystem reaching over $110 Million. Marc Andreessen, a well-known entrepreneur and investor, is betting big on the future of bitcoin with investments totaling upwards of $50 million. The Wall Street Journal’s Gregory Zuckerman reports that Andreessen has no plan on slowing down, claiming that he will invest “hundreds of millions” more in bitcoin related businesses. “You know, magic markets don’t appear all the time, so you take advantage of them.”- Marc Andreessen

The beauty with this revolutionary “magic market” is that there are ample opportunities for high net worth individuals to get their “piece of the pie”. Wallet providers and exchanges, such as Coinbase, charge a premium on the bitcoins sold through their website. Someone interested in investing millions should realize the accessibility of the vast market in front of them. There is not only money to be made through capital gains, but also in creating, stabilizing, and maintaining the bitcoin network.

Investors have an alternative to purchasing bitcoins through exchanges; they can create their own through a process known as “mining”. Cloud mining contracts have arisen recently as a new form of an alternative investment. Investors can purchase a specific amount of hash power for a pre-determined amount of time. Furthermore, there are no additional costs associated with mining; such as electricity and maintenance. The customer pays an upfront amount and in turn receives bitcoin payouts for the length of the contract. There is No need to worry about the increasing difficulty of the network because once the contract period is over, you can renew with an increased amount of hash power to maintain your anticipated profit margin.

The opportunity to mine bitcoin will only be available for the next few years. A predetermined amount is set within the network at 21 million bitcoins. Once all have been mined, the network protocol will switch its incentive method to transaction fees only. The technology was designed to be inflation free so inevitably the demand for a single bitcoin will go up, in turn driving up the price.