What is Bitcoin?
If you’ve been here, you’ve heard of Bitcoin. It has been in the headlines for the last few years or so – as a scheme to get rich quick, to run out of money, the birth of the true international currency, the end of the world, or the world as advanced technology. But what is Bitcoin?
In short, you might say that Bitcoin is the first decentralized system of money used for online transactions, but it will probably be useful to dig a little deeper.
We all know, in general, what ‘money’ is and what it is used for. The most significant thing about the use of money before Bitcoin is that it is centralized and controlled by a single entity – the centralized banking system. Bitcoin was invented in 2008/2009 by an unknown creator who went by the pseudonym ‘Satoshi Nakamoto’ to bring decentralization of money worldwide. The idea is that currencies can be traded internationally without any hassle or fees, checks and balances will be distributed all over the world (not just in the accounts of private corporations or government), and money will become more democratic. Equally accessible to all.
How did Bitcoin get started?
The concept of Bitcoin, and cryptocurrency in general, was started in 2009 by Satoshi, an unknown researcher. The reason for its invention was to solve the problem of centralization in the use of money which depended on banks and computers, a problem which many computer scientists were not happy with. Attempts to achieve decentralization have been unsuccessful since the late 90’s, so when Satoshi published a research paper providing a solution in 2008, it was irresistibly welcomed. Today, Bitcoin has become a well-known currency for Internet users and has given birth to thousands of ‘altcoins’ (cryptocurrencies outside of Bitcoin).
How is Bitcoin made?
Bitcoin is created through a process called mining. As paper money is made through printing, and gold is mined from the ground, bitcoin is made by ‘mining’. Mining involves solving complex mathematical problems related to blocks using a computer and attaching them to a public ledger. When it started, I needed a simple CPU (like on your home computer), however, the difficulty level increased significantly and now you will need special hardware, including a high end graphics processing unit (GPU). Take out the bitcoin.
How do I invest?
First, you need to open an account with a trading platform and create a wallet; You can find some examples by searching Google for ‘Bitcoin Trading Platform’ – they usually have the name ‘Coin’, or ‘Market’. After joining one of these platforms, you click Resources, and then click Crypto to choose your preferred currency. Each platform has a number of indicators that are important, and you must monitor them before investing.
Simply buy and hold
While mining is the surest and easiest way to earn bitcoin, there is a lot of rush involved, and the cost of electricity and specialized computer hardware makes it accessible to most of us. To avoid all of this, make it easy for yourself, input the amount you want directly from your bank and click “Buy”, then sit back and watch your investment grow as the price changes. This is called exchange and it is performed on many. Exchange platforms available today with the ability to trade between different Fiat currencies (USD, AUD, GBP, etc.) and different crypto coins (Bitcoin, Ethereum, Litecoin, etc.).
If you are familiar with stocks, bonds or forex exchanges, you can easily understand crypto-trading. There are Bitcoin brokers like E-Social Trading, FXTM markets.com and many more that you can choose from. Platforms offer you Bitcoin-fiat or fiat-Bitcoin currency pairs, for example BTC-USD means Bitcoin transactions in US dollars. Keep an eye on price changes to find the perfect pair according to price changes; Platforms provide value among other indicators to give you accurate trading tips.
Bitcoin as a share
Companies are also created to allow companies that invest in Bitcoin to buy shares – these companies trade back and forth, and you simply invest in them and wait for your monthly benefits. These companies simply pull digital money from different investors and invest on their behalf.
Why should you invest in Bitcoin?
As you can see, in order to invest in Bitcoin, you need to have some basic knowledge about currency, as explained above. Like all investments, it involves risk! The question of whether to invest or not depends entirely on the individual. However, if I were to suggest, I would suggest investing in Bitcoin with a reason that Bitcoin continues to grow – although there has been a significant boom and bust period, it is very likely that cryptocurrencies as a whole will continue to rise in value over the next 10 years. Of all the current cryptocurrencies, Bitcoin is the largest, and most well-known, so it is a good place to start and currently the safest bet. Although volatile in the short term, I suspect you will find that the bitcoin business is more profitable than most other ventures.