I know someone who did very well buying and selling bitcoin. She made nearly $10,000 over the course of one summer. Should you do the same? Should I?

Is bitcoin a worthy investment?

To me, there are two types of investments that a person can make: investments that take time and investments that are just for the short-term.

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Investments that take time come primarily in the form of mutual funds in the stock market. By doing this, you can pretty easily become a multimillionaire in your lifetime. You won’t be able to buy everything, but you’ll be able to buy pretty much anything. The downside? You’ll probably have gone gray before you get to call yourself wealthy.

The other type of investments are short-term investments. To me, there aren’t very many sound short-term investments. Some short-term investments I consider are buying and selling homes and investing in a company you control. “But isn’t investing in a company long-term?” you may ask.

Hopefully, yes. But any decent company will become profitable in just a few years, and then you can begin taking a salary, so I look at that as short-term investing. Since the company will soon begin paying you, and the company can sustain itself, your personal funds will be out of the picture.

Some people strongly prefer these short-term options. You are more in control of a home sale or a small company.

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As some very wise people say, “Don’t bet on things you can’t control.”

Investing in bitcoin can be seen as either a long-term investment or a short-term investment. Where it gets messy is that it hasn’t proven itself as a currency. When investing in the stock market, the safest form of investing is by investing in blue-chip companies that have proven themselves – even better if you can cram all those companies into one tidy mutual fund. That’s safety. Bitcoin provides no such safety.

You are betting on whether an intangible, unregulated, and untraceable currency will do well or do poorly.

Bitcoin has swung from about $13 to more than $1000 since it came out in January 2013.  Up. Down. Up. Down.  This means that it has not done well over the “long term” and has no stable track record like the Standard & Poor’s 500 index.

For me, the volatility makes it a lousy long-term investment.

But wait. Let’s zoom out for a second and look at the big picture. Why does bitcoin exist? It's a disruptor. It’s a totally digital form of internationally accepted currency that has no regulatory banking system.

What does this mean? It means that bitcoin could displace traditional currency altogether.

If bitcoin becomes the preferred method of payment, then in the United States alone, the value of a bitcoin investment now would be astronomical. Let’s look at a few easy numbers.

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There is about $70 trillion in U.S. dollars. There are currently about 3.5 billion bitcoins. So if it replaces the USD, the price per coin would have to go up 20,000 times. That means one dollar of bitcoin would be worth $20,000. This could become a reality. As the world becomes more and more interconnected, people will be looking for an international currency.

Forget currency exchanges— cryptocurrencies know no boundaries.

Bitcoin could climb for the same reason that the Dow Jones keeps climbing decade after decade. The world is becoming more and more developed, and the Dow is posting positive numbers as a result of money coming into the U.S.

As the world develops, each bitcoin will likely grow with the stock market as the world expands, but at a greater rate. Physical currency will likely die. A universal currency then may emerge. If it becomes bitcoin, now may be a very good time to invest.

But keep in mind that there are many forms of cryptocurrency competing with bitcoin.

These currencies may take off, as well. All cryptocurrencies have the same things going for them. It’s best to survey each one and see which horse you’d like to bet on.

How can you invest in bitcoin? Simply buy them on one of the many bitcoin exchanges. Hold them. No need for a broker. But if you get in a pinch, you can easily sell off part of your investment without paying any penalties. Go to places like Overstock.com or CheapAir.com – or whoever accepts bitcoin – and buy something you need.

Now, here's a surprise: I would say there's no such thing as “investing in bitcoin. There's just speculating.

If the idea of speculating excites you, then go for it. But don’t count on it for your retirement.

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They say that it takes money to make money — that’s absolutely true. Most people only recommend speculating with bitcoin if you have the money to lose.

If you only have $100, probably invest it instead.

And remember, you can lose so much by speculating on bitcoin. I don’t mean to pull the rug out from under you, but bitcoin is a risk, and it’s not a risk many young people can make. I’m not saying that based on emotion. I’m looking at real data that suggests it’s too risky to partake in unless you have the money to lose. Most young people don’t.

I don’t mean to pull the rug out from under you, but bitcoin is a risk, and it’s not a risk many young people can make. I’m not saying that based on emotion. I’m looking at real data that suggests it’s too risky to partake in unless you have the money to lose. Most young people don’t.

There’s a reason I said my friend did very well with bitcoin. It’s not something a person could have invested in long ago and made a killing by selling at any point. Opportunity for making money with bitcoin has ebbed and flowed up to this point. Historically, it has not been a good “set it and forget it” investment.

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Bitcoin could climb for the same reason that the Dow Jones keeps climbing decade after decade.