Investment

There are many site that have been setup that enable you to invest in bitcoins. We will in time get round to reviewing these services. At this time we are focusing on the other aspects of this site. I would however like to offer a word of warning to anyone considering investing bitcoins into a site claiming to offer a return on bitcoins by investing bitcoins.

This is almost certainly a scam called a ponzi scheme whereby the early investors returns are paid out of the later investors deposits. Bitcoins (unlike almost all other world currencies) are ran appreciating currency (It tends to increase in value over time). Hence there is no incentive to lend anyone bitcoins. When a bank lends you money they actually probably just created it in a ledger book. This is one of the reasons banks are very rich – they can just create money – if you don’t believe me have a read of this wikipedia article about fractional reserve banking. For example – a person invests £1000 in bank A. This then enables bank A to create and transfer electronically as much as £10,000 a second party who might take it to bank B and deposit it. Bank B could then theoretically lend £100,000 to a third party – and the cycle continues. The government controls how much lending goes on by through a series of mechanisms such as increasing interest rates or changing banks capital reserve requirements.

With Bitcoins how would you increase the amount you had using bitcoins? I have seen several methods suggested – from allowing other people to use your bitcoins to gamble (inherently risky – and anyone who is good enough at it really doesn’t need your money to do this) to people who pull the money in and out of bitcoins playing the markets (again anyone good enough at this would keep it to themselves).

Proceed with caution before investing in any of these schemes. Remember guys it is the wild west out there with little or no recourse to get back your coins in this highly unregulated industry that is forming.

Do you know of a site that allows you to invest in or invest with bitcoins. If so please comment below and we will consider your site for inclusion on this list.

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