Would you invest in your retirement this way?

While flicking through the paper last weekend, I found an article that caught my attention. It was in the finance section and it was the words “retirement savings” that really caught my attention. Although I am still employed right now, I am always looking for the best way to invest, acquire and manage my funds to give me a happy and stress free retirement. And the topic of the article investigated a very unique and somewhat scary way of managing retirement funds… It was all about the bitcoin.

Some of you may have heard of the elusive online currency before and some of you may not. But, the article reported that an increasing number of over 60s are investing in Bitcoin for retirement. Is it a good idea or a bad idea? I don’t truly know, but I thought I would explore the whole topic with you today and find out, what do you think?

What is a bitcoin?

Bitcoin are considered an online currency that is being used for transactional purposes online. To start using bitcoin you just need to download the “wallet” app and start trading your Australian cash for the virtual coins that land in your virtual “wallet”. But, the thing is they aren’t quite on par with the Australian dollar. Right now, if you want to buy just one bitcoin, it will set you back about $509.62. That’s right, they’re expensive little buggers. This is because they are traded freely and unregulated so they cost as much as people are willing to pay for them.

What can I use them for?

Bitcoin can be traded for anything. Several major companies are beginning to integrate bitcoin into their payment schemes including Expedia, AirBnB and some electronics retailers particularly those based in America. You can also receive bitcoin by offering your goods and services in exchange for them. They are used in a similar way to bartering and transferring bitcoin is incredibly simple due to the “wallet” app.

How legal are they?

Using bitcoin is 100% legal. However, this week the ATO released documents outlining their approach to cyber currencies including bitcoin and said they will not be considered as a currency. They will instead be treated as an asset and therefore, anyone who sells bitcoin will be expected to pay capital gains tax.

Is it a wise investment?

I am not a financial advisor, however from the research I have done I can conclude one thing. They have no real baseline value and they don’t pay an income. In 2011 a single bitcoin was valued at US$1, at the end of last year the price soared to US$1200 and now they are back down at the AU$500 mark so their market value is incredibly volatile. I sure couldn’t invest with peace of mind into something like that, but my question is, would you?

So tell us, based on what you have heard, read and seen about bitcoin, would you invest in some for your retirement?  Or, have you already invested in bitcoin? Tell us, have you had success with it?