What is bitcoin?
Bitcoin is a decentralized, peer-to-peer, digital currency system designed to enable Internet users to process transactions through a digital exchange unit known as bitcoin. In other words, it is a virtual currency.
The Bitcoin system was created in 2009 by an undisclosed programmer. Since then, bitcoin has attracted tremendous attention as well as controversy as an alternative to the U.S. dollar, the euro, and commodity currencies such as gold and silver.
Bitcoin did not attract much attention in the world of business and finance until 2009. It became noticeable in the period 2011-2012, when it scored more than 300%. Since August last year, bitcoin has increased its price by 400%. As a result, venture capital firms and investors around the world continue to value cryptocurrency.
In the first half of 2014, venture capital firms invested $ 57 million in bitcoin in the first quarter and then another $ 73 million in the second quarter for a total of $ 130 million, up 50% from last year’s $ 88 million. This is in stark contrast to the scenario in 2012, when bitcoin firms raised a relatively meager $ 2.2 million.
These statistics undoubtedly prove that bitcoin is worth your investment, and the question arises, how can you buy and invest in bitcoin?
A guide for novice bitcoin investors
The easiest and least difficult way to invest in bitcoin is to buy bitcoins. There are many well-known firms, mostly in the US as well as abroad, that are engaged in buying and selling bitcoins, abbreviated BTC.
If you live in the US, then Coinbase is the place you are looking for. Coinbase provides its customers with BTC at a rate that is 1% higher than the current market price. U.S. residents have the ability to sync Coinbase wallets with their bank accounts. As a result, future transfers of payments are made without problems. This company also gives you the ability to automatically purchase bitcoin from time to time. For example, if you are interested in purchasing $ 50 in bitcoins at the beginning of each month, Coinbase allows you to set up an automatic purchase for that amount.
Remember the terms before you start using this service. If you subscribe to the automatic bitcoin service, you will not be able to control the price at which BTC is purchased each month. Note that Coinbase does not work as a bitcoin exchange, meaning you buy and sell coins directly to firms. Because the firm has to receive coins from other buyers, you may experience delays or interruptions in placing orders during rapid market movements.
BitStamp meets the requirements of a regular bitcoin exchange. Bitcoin acts as an intermediary that allows you to trade with other users rather than with the company itself. Here liquidity is higher and you always have a good chance of finding someone who is willing to trade with you. The starting fee is 0.5%, which can be reduced to 0.2% if you trade $ 150,000 over 30 days.
Alternative ways to buy bitcoins
Exchange is not the only way to invest in bitcoin. Local bitcoins are often used to purchase BTC offline. The site is intended for links to potential buyers and sellers. Bitcoins are kept in deposit from the seller and can only be transferred to the buyer.
Buying bitcoins offline is not always very reliable and secure. It is therefore advisable to meet with sellers during the day and allow friends to tag you together just in case it goes south.
Bitcoin is not just a modern trend. Venture capital firms consider bitcoin a decent replacement for regular currency in the long run. There are silly ways to enter the realm of bitcoin investment. As mentioned earlier, Coinbase, BitStamp and Local Bitcoin are the most popular channels for investing in bitcoin in the US. Do your homework and find out which prospectus puts all your boxes.