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Bitcoin and cryptocurrency. Scam or genuine investment for doctors?

With any investment, there is a risk. Of course, a well-rounded investment portfolio will cater to your attitude towards risk, but if you’re willing to go outside your comfort level and explore new avenues, you could be highly rewarded – or you could lose it all. 

Bitcoin, or cryptocurrency in general, is one such investment opportunity. However, it can be’s extremely volatile and generally unregulated so it’s very easy for investors to get scammed all in the name of earning money. It would be important to point out that not all cryptocurrencies similar to traditional investments are of equal risk and you should do your homework about these.

Here at Medics Money, we get lots of questions about whether or not cryptocurrencybitcoin is a scam or a genuine investment. Let’s take a look at what cryptocurrency is and the benefits and disadvantages of this relatively new investment option so you can decide for yourself. 

What is cryptocurrency?

Cryptocurrency is a digital or virtual currency that is secured by cryptography (the ability to exchange messages that can only be read by the intended recipient). Because of this unique setup, it’s difficult to counterfeit or double-spend. One of the main characteristics is that cryptocurrency is not generally issued by one central authority, it is distributed and decentralised so it is hard to regulate or have governments interfere with the dealings at all.  Cryptocurrencies use a new and powerful technology solution called blockchain.

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What is blockchain?

Essentially, blockchain is a type of distributed, decentralised ledger. Most cryptocurrencies are decentralised networks based on blockchain technology. In other words, blockchain is like a database, but it stores information differently – in sets of blocks that are chained together with these being transparent and available for all to see and validate hence providing a high level of security and auditable trailand once a block is full, it’s then chained to the previous block.. In terms of bitcoin, blockchain is used in a decentralised way so that all users maintain control. 

Are all cryptocurrencies the same?

No, there are currently over 6000 cryptocurrencies listed on Coinmarketcap.com which shows the prices of these different currencies.  

Bitcoin and Ethereum are the two most well established and largest cryptocurrencies based on market cap and are regularly featured in the news.  Bitcoin in particular is taken quite seriously by governments, financial institutions and you can even pay for high street brands such as Lush beauty products using bitcoin.

Pros and cons

Just like any investment, there are advantages and disadvantages to investing with cryptocurrency. On the plus side:

  • There is the potential for high returns quickly with minimal expense and you can get paid as soon as you want. 
  • You also benefit from it being decentralised because cryptocurrency cannot be regulated or valued by a government or a bank, nor can it be created or distributed by them either – essentially, there’s no third party interference. 
  • There’s also a lower risk of fraud because there’s no need to disclose confidential financial information and more freedom as you can conduct transactions on your own time. 

On the other hand, there are some downsides due to its high volatility there is a huge potential for loss as well: 

  • Prices rise and fall quickly. 
  • You could also end up losing the currency due to technological errors or mishaps and is not something you should dabble in without proper knowledge.
  • Additionally, the fact that it is unregulated could also be a disadvantage. Lack of regulatory oversight and differing laws from country to country could lead to fraud and scams. And if something does go wrong, there’s no governing body to help you.

Right for you?

It’s quite possible to have a profitable investment plan with traditional asset classes – cash, stocks, bonds, and property – that doesn’t involve holding any cryptocurrency. So, it’s really up to you whether you incorporate cryptocurrency into your portfolio. 

For an in-depth exploration of this topic, listen to our podcast, featuring Dr Abdullah Albeyatti, CEO and Co-Founder at Medicalchain and MyClinic, health-tech companies that focus on empowering patients to have access to their medical records and providing access to telemedicine service, available in over 78 countries, on top of his duties as a GP. 

And don’t forget to check out our first podcast with Dr Albeyatti to learn more about how he is working to apply blockchain technology to medical records.

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What medical school didn’t teach us about money

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