New advances in computing technology provide a direct incentive for miners to upgrade their equipment. In the race to mine coins (of which there are a limited quantity), the race truly does belong to the fastest miners.
Then, there’s the massive volatility associated with the currency (which, as noted earlier, has seen its value swing wildly) coupled with the fact that bitcoin is not a stock, not a bond, and not a recognized currency that any government issues or supports.
In a world where most people can’t even explain how a light bulb or cell phone works (much less a digital currency), the biggest player in Bitcoin didn’t even understand the technology well enough to protects itself from being robbed and going out of business.
With its secretive founding and shady clientele, it’s difficult to say whether Bitcoin itself will survive or remain the dominant cryptocurrency. Even so, Bitcoin represents a technological breakthrough that has the potential to change the way the world banks.
Along the way, this technology is likely create some very successful investors. In the near future, investors can look for exchange-traded funds that focus on Bitcoin-related businesses (the Winklevoss twins of Facebook fame have been hyping their as-yet unlaunched Bitcoin ETF for years).
The underlying value in cryptocurrencies may turn out be all about the movement of money (think Western Union (WU WU The Western Union Company 19.65 +0.51% ), checking accounts, Visa (V V Visa Inc 111.97 +1.04% ), PayPal, and Venmo rolled into one) resulting in vast investment opportunities for those in the know. After all, digital currency is indeed a new frontier and that frontier is in its infancy.