If you’re here, you’ve heard of Bitcoin. It has been one of the biggest frequent news headlines during the last 12 months – as a get rich quickly scheme, the end of finance, the birth of truly international currency, as the end of the world, or as a technology that has improved the world. But what’s Bitcoin?
In short, you can say Bitcoin is the first decentralised system of money useful for online transactions, but it will probably be useful to dig a little deeper.
We all know, generally, what ‘money’ is and what it is used for. The most important issue that witnessed in money use before Bitcoin relates to it being centralised and controlled by a single entity – the centralised bank operating system. Bitcoin was invented in 2008/2009 by an unknown creator who goes on the pseudonym ‘Satoshi Nakamoto’ to bring decentralisation to money on a global scale. The theory is that the currency could be traded across international lines without difficulty or fees, the checks and balances will be distributed over the entire globe (instead of just on the ledgers of private corporations or governments), and money would are more democratic and equally accessible to all or any.
How did Bitcoin start?
The idea of Bitcoin, and crypto currency generally, was started in 2009 by Satoshi, an unknown researcher. The reason behind its invention was to solve the problem of centralisation in the usage of money which relied on banks and computers, a concern that many computer scientists weren’t happy with. Achieving decentralisation has been attempted because the late 90s without success, when Satoshi published a paper in 2008 providing a solution, it was overwhelmingly welcomed. Today, Bitcoin has turned into a familiar currency for internet users and contains given rise to a large number of ‘altcoins’ (non-Bitcoin cryptocurrencies).
How is Bitcoin made?
Bitcoin is made through a process called mining. Just like paper money is made through printing, and gold is mined from the bottom, Bitcoin is created by ‘mining’. Mining involves solving of complex mathematical problems regarding blocks using computers and adding them to a public ledger. When it began, a simple CPU (like that in your home computer) was all one needed to mine, however, the amount of difficulty has increased significantly and now you will require specialised hardware, including high end Graphics Processing Unit (GPUs), to extract Bitcoin.
How do I invest?
First, you will need to open an account with a trading platform and create a wallet; you can find a few examples by searching Google for ‘Bitcoin trading platform’ – they often have names involving ‘coin’, or ‘market’. After joining one of these platforms, you go through the assets, and then click on crypto to choose your desired currencies. There are a lot of indicators on every platform which are quite important, and you ought to make sure you observe them before investing.
Simply buy and hold
While mining is the surest and, in ways, simplest solution to earn Bitcoin, there is too much hustle involved, and the expense of electricity and specialised computer hardware makes it inaccessible to most of us. To avoid all of this, make it easy for yourself, directly input the total amount you want from your own bank and click “buy’, then sit back and watch as your investment increases based on the price change. This is called exchanging and takes place on many exchanges platforms on the market, having the ability to trade between many different fiat currencies (USD, AUD, GBP, etc) and various crypto coins (Bitcoin, Ethereum, Litecoin, etc).
If you are familiar with stocks, bonds, or Forex exchanges, you then will understand crypto-trading easily. There are Bitcoin brokers like e-social trading, FXTM markets.com, and many others that you can choose from. The platforms give you Bitcoin-fiat or fiat-Bitcoin currency pairs, example BTC-USD means trading Bitcoins for U.S. Dollars. Keep your eyes on the price changes to get the perfect pair according to price changes; the platforms provide price among other indicators to give you proper trading tips.
Bitcoin as Shares
There are also organisations create to allow you to buy shares in companies that invest in Bitcoin – these businesses do the trunk and forth trading, and you just invest in them, and wait for your monthly benefits. These businesses simply pool digital money from different investors and invest with the person.
Why should you invest in Bitcoin?
As you can see, buying Bitcoin demands you have some basic knowledge of the currency, as explained above. As with all investments, it involves risk! The question of if to get depends entirely on the individual. However, if I were to provide advice, I would advise in favor of investing in Bitcoin with grounds that, Bitcoin keeps growing – although there has been one significant boom and bust period, it is highly likely that Cryptocurrencies as a whole will continue to increase in value over the next 10 years. Bitcoin is the biggest, & most well known, of all the current cryptocurrencies, so is an excellent place to begin, and the safest bet, currently. Although volatile for a while, I suspect you will find that Bitcoin trading is more profitable than almost every other ventures.