Is it wise to use bitcoin for your retirement savings?

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Bitcoin is the flavour of the month, and a rash of reports of the rise and rise of the stateless digital currency has turned it into one of the world’s largest commodities.

Now there are rumblings that we could see bitcoin in retirement accounts.

Bitcoin is a cryptocurrency created around nine years ago when it was worth about 9c a coin. Its value has increased to a whopping US$14,141 as of 4 December 2017.

One of the reasons for the popularity of this type of currency is that it cuts out the need for banks and financial institutions to act as a middle man. No surprise, with trust in banks at a low point. It is little wonder it has attracted the focus of investors, making it (in theory) an appealing option for retirement investment.

However, there is speculation as to whether the incredible surge in bitcoin value will also lead to the biggest bubble since the 2000 dotcom crash.

Since bitcoin’s creation, there have been around 1000 other cryptocurrencies developed in its wake. While most will end up being worthless, many predict that bitcoin will at least survive.

But at what value, no one can predict.

Still, the loss of faith in financial institutions may make cryptocurrencies ‘the new black’, with the appeal of “a peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution”.

There are currently 16.7 million bitcoins in circulation at a total value of US$277 billion (at the time of writing). The number of bitcoins to be circulated will be capped at 21 million, meaning their ‘exclusivity’ may further increase their value.

But is it a safe investment?

The code upon which bitcoin works has never been hacked, although individual online wallets that hold bitcoin cash have been robbed by hackers.

There have been a number of ‘heists’ that have yielded hackers almost US$90 million in total and such attacks are what make bitcoin such a high risk.

And the nature of a cryptocurrency is such that should you be hacked or lose the password to your digital wallet, your money is gone with no recourse.

In other words, once it’s gone, it’s gone for good. One bitcoin tracker estimates that around US$61 billion has been lost through mislaid passwords or corrupt hard drives.

But this risk is not enough to thwart potential bitcoin investors.

Venture capital company Blockchain Capital published statistics showing that two per cent of adults held bitcoin but 19 per cent planned to within five years.

This could push the value up to hundreds of thousands of dollars, or not, no one can safely say.

The underlying lesson is that if you’re willing to take a risk and have expendable funds, then bitcoin may be a good investment. But with the risk comes the chance that you lose it all. Such is the nature of cryptocurrencies.

Read more at The Australian

Would you be willing to bet your retirement on it? Or would you rather sit back and play it safe? Have you invested in bitcoin? How have you fared from your investment?

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?



Total Comments: 71
  1. 0

    One needs to understand that a move from fiat currency to cryptos is well under way. Whether we end up with Bitcoin or another government designated crypto is anybody’s guess. What is certain is that money as we know it is dead.
    Some large online businesses are already accepting Bitcoin. The writing is on the wall.

    • 0

      I knew MICK would be the first to comment, he is an investment expert,travel expert, skiing expert and Government expert, where does it all end? MICK for PM.
      Please do not give financial advice unless you are qualified and authorised MICK, you could be in big trouble.

    • 0

      Don’t bother taking twaddle roy. You really have no idea do you.
      Jealousy is a curse mate.

    • 0

      MICK has another name which we all know: FIG JAM

      HOwever, MICK is welcome to have and to express his opinions. We just don’t have to believe or agree with them.

      I actually agree with one part of his note: “The writing is on the wall.” I know…I looked. It’s indisputable. Or indisputible (choose 1).

    • 0

      Is it like the ‘paperless office’ of the 80’s?

      I think it is as sure an investment scheme as tulips were –

    • 0

      Roy, if my financial advisor/investor manager gave me the generalised comments Mick provided he’d be out the door! Mick has pretty much said what business journals have been floating around for ages. He’s probably right – ‘money’ is on the way out but I think we’ll be dead before it dies! BTW, Roy there’s a big difference between advice and comment.

    • 0

      Do you have a comment roy or is it you just don’t like MICK?

    • 0

      If you think about it Puglet we already use plastic cards which have displaced paper money. Given that there is a growing number of businesses using Bitcoin, and some are multinational, I don’t think one has to think too hard to see where we are headed.
      Remember also that governments will love it. No more cash economy means they lose not $1 in tax.
      The other bad aspects aspect are governments who may decide they are going to have negative interest rates to force people into risky assets. Also, if we have a GFC then your money will be frozen as well as banks charging you for keeping your digital money on their books with negative rates.

      Hope you are right Puglet. I give it 5 to 10 years. Put it in your book and ‘tell me off’ if not done and dusted within that time period. I’ll eat humble pie. Seriously.

    • 0

      Rae, I absolutely adore MICK, he is such an expert on all things and I seriously think he should be our PM, don’t you?
      He holds the record for comments on this site and is so repetitive mainly knocking Mr Turnbull and often uses expletives that really have no place on this site but that’s the nature of the man I suppose, he must be great to sit next to at dinner parties or just imagine him next to one on a transatlantic flight.

    • 0

      roy, MICK is right to knock Mr Turdball and his inept Lieberal-Hillybilly COALition.

    • 0

      Knows-a-lot, yes we would be much better off with Shanghai Sam Dastyari and Shifty Shorten the used car dealer in charge of our “lucky country”. I want MICK in charge, no more no less, he is he most astute man on this site, do you agree?

  2. 0

    Bitcoins nice and fine, but only invest the amount you can loose without going broke

  3. 0

    At my age (84) with a satisfactory amount of investments to keep my wife and myself I won’t try Bitcoin or any other crypto money, but I reckon 50 years ago I would have tried a small fling on it.

    • 0

      Probably a smart call. Who knows where Bitcoin is going. The only sure thing is digital currency is coming. Already here so it won’t be long before cash is gone.

  4. 0

    Don’t know anything about it, don’t even understand why it exists, but any (get rich quick money making scheme) has got to be a hell of a risk, where somebody wins and somebody loses.
    Unless its run by Robin Hood, I don’t want any part of it.

    • 0

      Only safe investments even betting on horses should only be done with money you can afford to lose, totally. Then you win or you lose but your still alive financially!
      If you don’t have the spare , don’t involve yourself at all.

      For me Bitcoin I can’t fathom , but stockmarkets have me concerned as well sometimes, its like a giant TAB gambling house, a gamble , sure things which are few and far between are the only way to go.

      So don’t go unless you’re sure.

      And how can you ever be sure.

      Buy a building, then sell it , it’s made of something.

    • 0

      Ah Robin Hood friend “little John”

    • 0

      Bitcoin is an alternative currency not a ‘get rich money making scheme’. No one ever suggested it was.

      Would you call the Swiss Frank or the Euro ‘money making schemes’ if they appreciated against the dollar?

    • 0

      Bitcoin, the chain letter of the naughties. Some will make loads others will lose everything. It reminds me of when we were kids and an enterprising shop owner offered to buy our old useless shillings and pence of us before it was made useless, when changes like this occur there is always people lining up to take advantage.

  5. 0

    Well the fiat money took off after 1971 so it was only a matter of time until someone other than banks started creating money.

    I like the idea of the secrecy of it. There will be no way to know who has how much.

  6. 0

    Why is my inbox full of people trying to sell me bitcoin everyday. I send them to the spam folder, but every day there is more. Where does it end?

    • 0

      Who would know where Bitcoin is going. Some pundits say the run is only the beginning but history tells us that mums and dads get in as the big end of town gets out. What happens after that is always the same.

    • 0

      Please clarify “what happens after the that is always the same”.
      Thank you in advance.

    • 0

      Show a little knowledge.
      When the system collapses mums and dads are always caught out and they lose a lot of money. The big end is for the most part out.
      Surely you understand that? If not do some research or go get papers for the 12 months before a stock market crash and see the poison being pushed onto those who cannot see what is coming.

      There is an old saying in America that when taxi drivers start becoming conversant with the stock market then the end is nigh. No, not the ride!

    • 0

      Casey, I don’t get emails flogging bit-coin but I do get lots from nice Nigerians and Russians called Olaf or Samson wanting to make me a millionaire. All I have to do is send my bank details and pass word. Perhaps we should swap?

  7. 0

    I can’t help thinking if it looks like a pyramid scheme and sounds like a pyramid scheme, well you know what happens sooner or later .

    • 0

      I think you are probably right. Increased Demand is driving the value of bitcoin up just as Mick says. Eventually what goes up must come down. Venture capitalists will do well because they know when the pyramid will fall. The average investor is usually uninformed and they (us) will be left with ginormous losses. Crime bosses, people buying illegal drugs on line etc like bit coin cause there is no regulation, no legal protection and no way to prove who is doing what so it really is buyer beware!

  8. 0

    It will be a very long time before money as we know it goes! Using cards is a mug’s game and all you do is pay the banks fees to use your own money. Wake-up.

    • 0

      The greatest disaster for the working person in Australia and probably all over the modern world , was when your pay packet began being placed straight into your designated bank. No questions or complaints allowed , it just happened.
      In fact I worked with a chap who was the last person in a very large national company to demand and get his money in cash every pay day. Until he retired.
      The rest of us just fell into line.

      Then the thievery and gouging of accounts began and has become such a racket that we need to call a Royal Commission into banking and Insurance and superannuation, probably every ten years! Because the average not that well informed person, has really no idea what is being done to them.

      This has been a tragedy for AUSTRALIA, maybe because we were the perfect population sized, large area nation, that hunting down and understanding generalisations of your banking and loan rules. Sometimes branches separated by a thousand miles, you know head office said this!!! Was magnificently perfectly able to be hidden , in account penalties and bank rates , ATM fees and how much it cost the banks to rob you. We don’t know we have the feeling though that sometimes it just doesn’t feel right.
      In fact a certain north states bank is going to have some problems very soon.
      Its been the greatest racket since the history of human beings.
      But we modern humans just had it pulled over our eyes, hidden in plain site! Corruption in banking in the name of “make your own rules” no politicians wuith the guts to look closer, so what are they getting out of this?

  9. 0

    Yes – put all your super in bitcoin
    Will be worth a trillion dollars soon

    Go on Mick

    • 0

      It MICK does it. I will follow, I would be a fool not to especially as he told me to show a little knowledge above.
      MICK why are you not our PM or Treasurer then Australia really would be the “Lucky Country” I’m really serious not tongue in cheek MICK.

    • 0

      Forgot to ask you MICK, did you buy tulips or Dot Com shares, just taking MICK?

    • 0

      Roy – you think he’ll be better than the worlds greatest treasurer?
      Take us into a trillion dollars in debt maybe at the height of our next economic boom?

      He may well borrow and invest in bitcoin and make Oz the world’s richest country, and we will have universal pension for all, single pension increased to $100k a year, and we all live happily ever after

  10. 0

    Well I clicked onto cryptocurrency, dictionary explanation,describing this , and I have no idea what the hell I was reading. So there you go, that’s why the world has wealthy people and tricked losing people everywhere! No one can understand what is being done to make money or lose money, so I imagine Bitcoin will survive JUST , yes only just , for how long ? Ha ha ha !

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