An Ambergate resident who has found success trading in cryptocurrency will hold a seminar in Busselton to share her knowledge about trading in virtual currency.
Cryptocurrency is a digital or virtual currency using cryptotechnology as security. The the most commonly known cryptocurrency is bitcoin, at the time of writing this article, according to coindesk.com/price, one bitcoin was worth $8,249.73.
Experienced in trading on the stock market, Chantelle McKeag started researching cryptocurrency for three months before taking her first plunge into digital currency trading.
Ms McKeag said since she started trading she had made a small fortune in a short amount of time and wanted to show other people how to do it.
“I have found a system where you can trade your own money and earn commissions too,” she said.
Ms McKeag said cyrptocurrency used decentralised technology to let people make secure payments and store money without the need to use their name or go to a bank.
“They run on a distributed public ledger called a block chain, which is a record of all transactions held by currency holders,” she said.
“People see value in money free from government control and fees which banks charge.”
In Australia, bitcoin has become a taxable currency, has been accepted as an asset for loans, rent payments and can be withdrawn as cash in AUD from an ATM, said Ms McKeag.
“I personally use a bitcoin swipe card to pay for my groceries, fuel and withdraw cash out of an ATM.”
Curtin University head of accounting professor Saurav Dutta said that the value of bitcoin had doubled in the last three months but warned there were always risks when investing to make greater returns.
Professor Dutta said the basic concept of finance says, any investment opportunity that promises a greater than average return comes with with a greater than average risk.
“It implies you could lose your entire money and there is a very fine line between investing and speculating, when you invest there is some kind of assurance and regulations that keeps the game fair,” he said.
“When you are speculating you are going into uncharted territory and the government regulations are not in place yet, hence some people – less savvy ones – lose money very quickly.”
- Curtin University head of accounting professor Saurav Dutta
Professor Dutta said he would not go to the extreme and call bitcoin a fraud, but would say it was not for people who were not technically savvy.
Professor Dutta said trading in cryptocurrency was suitable for teenagers or 20-year olds who were comfortable with computers and understood it better. He said it was not a good or an advisable investment for retirees or people on a fixed income.
“The main reason is the value of bitcoin is very volatile, it goes up and down very quickly so you have to time it extremely well to make money,” he said.
“Especially for older people, when the value drops it would take a very long time for it to come back to what it was, whereas younger people have more time to recover and ride out the waves.
Professor Dutta said there were many cryptocurrencies, which was similiar to the number of online merchants back in the 1990’s, however not each and every online retailer survived.
He said a few big ones like Amazon survived and become more mainstream but many failed to find the same success.
“Similar with bitcoin, there will be many of those cryptocurrencies coming across, not all of them will survive and some people will lose a lot of money from the ones that do not survive.
“However, if you picked the right one – if you had picked Amazon – then you would make a lot of money.”
Professor Dutta said some investment funds now offered cryptocurrencies and suggested that people who were not technically savvy to go with recognised trading companies.
He said while people heard mostly negative things about bitcoin there were positive things, such as block chain which was revolutionising the way that contracts were written.
In addition, transactions were instantaneous so people did not have to wait for money to be transferred and it was less costly compared to credit card transactions.
The downside of transacting with bitcoin, Professor Dutta said there was more privacy which meant it was more difficult to follow the money trail and you could be trading with arms dealers, poachers or drug dealers.
“If I want to buy coffee why would I not want the world to know I buy coffee, but when you buy something that is illegal then people would want to hide where the money is coming from.
“While it has the advantage of creating a lot of privacy, it also raises the question of what is it you are transacting in.”
Have your say: Have you traded in cryptocurrency? What was your experience like? Email editorial.bdmail@fairfaxmedia.com.au.
