Should you buy Bitcoin? The pros and cons of the cryptocurrency craze
Interest in Bitcoin has skyrocketed over the last few weeks, rising as quickly as the value of the cryptocurrency.
Bitcoin was trading at more than $18,000 on Monday. It began the year trading below $1,000.
A lot of people have made a lot of money with it, but is it too late to jump on the bandwagon?
Some financial advisors say 'buyer beware' when it comes to investing in digital currency like Bitcoin. Others are on the fence or just don't know enough about it to recommend it as an investment.
However, some locals have done their research and have turned a nice profit.
Matt Hanlon calls himself a cryptocurrency enthusiast. The Bitcoin logo is his phone screensaver.
He first learned about cryptocurrency three years ago and invested in Bitcoin three months later after doing his research.
"I saw this thing was going to be pretty big. At the time it was selling for I think 600 bucks each," Hanlon said.
He started by buying fractions of Bitcoins called Satoshi.
One Bitcoin is made up of 100,000,000 Satoshi.
Describing what a Bitcoin actually is and how it's managed is complicated. It's not issued by any government and the Bitcoin itself is a one-of-a-kind result from a complex computer code.
People store their codes in a digital wallet only they have access to.
"So you have two keys. You have a public key that you can show anybody and that's how they send you money is with your public key, and then you have a private key. That's the key that lets you spend the Bitcoin. They look like those QR codes," Hanlon said.
He uses the digital currency to buy things.
Hundreds of companies around the world now accept Bitcoin as payment.
In addition, a Bitcoin futures market just opened on the Chicago exchange.
Hanlon believes it's the future of commerce.
"It's the people's money," Hanlon said. "No one else owns it because it's verified across the world on the internet. Cryptography is secure. You know if I send you a value you can't send three of those values, you can't duplicate it. It's as good as gold."
Furthermore, Wesley Odom, president of Armada Advisors, an investment advisory firm in Pensacola, warns those who may be interested in making a quick buck with the digital currency.
Odom said, "In essence, you have a situation that could result in which, at some point, someone can say, 'Well we're frozen right now because we don't have any more space where it's not going to, the currency is not going to be transacted until we deal with it.'"
The Bitcoin economy is new, unregulated, and has a bad rap for being used extensively on the black market.
Odom doesn't recommend people use it as a way to make money.
"Until this is more vetted out by the Securities and Exchange Commission and other countries around the world and really research and find out what's going on, I think that you ought to take a backseat to this. There's a lot of other ways you can make money," Odom said.
Hanlon advises those who do consider investing never to invest more than they can afford to lose.
Hanlon has made money, but he wouldn't say how much.