What is bitcoin?
If you’re here, you’ve heard of bitcoin. It was one of the most frequent headlines in the last year or so – like a rapid enrichment scheme, the end of finance, the birth of a truly international currency, the end of the world, or technology that has perfected the world. But what is bitcoin?
In short, bitcoin is the first decentralized money system used for online transactions, but it will probably be useful to dig a little deeper.
In general, we all know what “money” is and what it is used for. The most significant problem observed with the use of money for bitcoin is that it is centralized and controlled by one entity – the centralized banking system. Bitcoin was invented in 2008/2009 by an unknown creator who has the nickname “Satoshi Nakamoto” to bring decentralization of money globally. The idea is that currency can be traded internationally without any difficulty and fees, checks and balances will be distributed around the world (not just by books of private corporations or governments), and money will become more democratic and equally accessible to all. .
How did bitcoin start?
The concept of bitcoin and cryptocurrency in general was started in 2009 by Satoshi, an unknown researcher. The reason for his invention was to solve the problem of centralization of the use of money, which relied on banks and computers – a problem that was not satisfied by many computer scientists. Attempts to achieve decentralization have been unsuccessful since the late 1990s, so when Satoshi published a decision document in 2008, it was largely welcomed. To date, bitcoin has become a common currency for Internet users and has generated thousands of “altcoins” (cryptocurrencies not related to bitcoins).
How is bitcoin created?
Bitcoin is produced through a process called mining. Just as paper money is obtained through printing and gold is mined from the ground, bitcoins are created by “mining”. Mining involves solving complex mathematical problems involving blocks using computers, and adding them to the general ledger. When it started, mining required a simple processor (such as a home computer), but the level of complexity has increased significantly, and now you will need specialized equipment, including a high-end graphics processor (GPU), to extract bitcoin.
How can I invest?
First, you need to open an account in the trading platform and create a wallet; you can find a few examples by searching Google for a “bitcoin trading platform” – they usually have names that include “coin” or “market”. After joining one of these platforms you click on the assets and then click on the crypto to select the desired currencies. On each platform there are many indicators that are quite important, and before investing they must be met.
Just buy and hold
Although mining is the safest and, in a sense, the easiest way to earn bitcoin, there is too much fuss, and the cost of electricity and specialized computer equipment makes it inaccessible to most of us. To avoid all of this, make it easy for yourself, enter the right amount directly into your bank and click “buy,” and then sit back and watch your investment increase as prices change. This is called an exchange and takes place on many exchange platforms available today with the ability to trade between different fiat currencies (USD, AUD, GBP, etc.) and different cryptocurrencies (Bitcoin, Ethereum, Litecoin, etc.) .
If you are familiar with stocks, bonds or Forex exchanges, then you will easily understand crypto trading. There are bitcoin brokers like e-social trading, FXTM markets.com and many others to choose from. The platforms provide you with Bitcoin-fiat or fiat-bitcoin currency pairs, for example BTC-USD means bitcoin trading for US dollars. Follow price changes to find the perfect pair according to price changes; platforms provide price among other indicators to give you the right trading tips.
Bitcoin as a stock
There are also organizations set up so that you can buy shares of companies that invest in bitcoin – these companies trade back and forth, and you just invest in them and expect your monthly benefits. These companies simply pool the digital money of different investors and invest money on their behalf.
Why invest in bitcoin?
As you can see, investing in bitcoin requires basic knowledge of the currency, as explained above. Like all investments, it involves risk! The question of whether to invest money is entirely up to the individual. However, if I wanted 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 downturn, it is very likely that cryptocurrencies as a whole will continue to increase in value over the next 10 years. Bitcoin is the largest and most well-known of all current cryptocurrencies, so now it is a good place to start and the safest bet. Although volatile in the short term, I guess you will find that bitcoin trading is more profitable than most other businesses.