What is Bitcoin?
If you’re here, then you’ve heard of Bitcoin. It has been one of the most frequent news headlines in the last year or more – as a get-rich-quick scheme, the end of finance, the birth of a truly international currency, as the end of the world, or as technology that has improved the world. But what is Bitcoin?
In short, it can be said that Bitcoin is the first decentralized money system 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 important problem seen with the use of money before Bitcoin was that it was centralized and controlled by one entity – the centralized banking system. Bitcoin was invented in 2008/2009 by an unknown creator who goes by the pseudonym “Satoshi Nakamoto” to bring decentralization of money on a global scale. The idea is that currency can be traded across international lines without hassles or fees, checks and balances will be distributed around the world (not just on the ledgers of private corporations or governments), and money will become more democratic and equally accessible for everyone.
How did bitcoin start?
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 that relied on banks and computers, a problem that many computer scientists were not happy with. Attempts to achieve decentralization have been made since the late 1990s without success, so when Satoshi published a paper in 2008 proposing a solution, it was widely applauded. Today, Bitcoin has become a familiar currency for Internet users and has spawned thousands of “altcoins” (cryptocurrencies other than Bitcoin).
How is bitcoin made?
Bitcoin is made through a process called mining. Just as paper money is made by printing and gold is mined from the ground, Bitcoins are created by “mining”. Mining involves solving complex mathematical problems regarding blocks using computers and adding them to a public ledger. When I started, a simple CPU (like the one in your home computer) was all that was needed to mine, but the difficulty level has increased significantly and now you’ll need specialized hardware, including a high-end graphics processing unit (GPU), to mine of Bitcoin.
How do I invest?
First, you need to open an account on a trading platform and create a wallet; you can find some examples by Googling “bitcoin trading platform” – they usually have names including “coin” or “market”. After joining one of these platforms, click on assets and then click on crypto to select your desired currencies. There are many indicators in every platform that are quite important and you should make sure you monitor them before investing.
Just buy and hold
Although mining is the safest and in some ways the easiest way to earn bitcoins, there is too much effort involved, and the cost of electricity and specialized computer hardware makes it out of reach for most of us. To avoid all this, make it easy on yourself, directly enter the amount you want from your bank and click ‘buy’, then sit back and watch your investment grow as the price changes. This is called an exchange and is done on many exchange platforms available today, with the ability to trade between many different fiat currencies (USD, AUD, GBP, etc.) and different crypto coins (Bitcoin, Ethereum, Litecoin, etc.). n.).
If you are familiar with stocks, bonds or currency exchanges, then you will easily understand crypto trading. There are bitcoin brokers such as electronic social trading, FXTM markets.com and many more to choose from. The platforms provide you with Bitcoin-Fiat or Fiat-Bitcoin currency pairs, for example BTC-USD means trading Bitcoin for US Dollars. Track price changes to find the perfect pair according to price changes; platforms provide price along with other indicators to give you relevant trading advice.
Bitcoin as a stock
There are also organizations created to allow you to buy shares in companies that invest in bitcoins – these companies do reverse trading, and you just invest in them and wait for your monthly income. These companies simply collect digital money from various investors and invest on their behalf.
Why should you invest in Bitcoin?
As you can see, investing in Bitcoin requires you to have some basic knowledge of the currency as explained above. As with all investments, there is risk involved! Whether to invest or not is entirely up to the individual. However, if I had to give advice, I would advise investing in Bitcoin for the reason that Bitcoin continues to grow – although there has been one significant boom and bust period, it is very likely that cryptocurrencies as a whole will continue to experience an increase in value in the next 10 years. Bitcoin is the biggest and best known of all the current cryptocurrencies, so it’s a good place to start and the safest bet right now. Although volatile in the short term, I suspect you will find that trading Bitcoin is more profitable than most other ventures.