The Bitcoin craze doesn’t seem to be waning. Investors are even mortgaging their homes to pour money into the cryptocurrency that began in 2009. The value of Bitcoin had set a cryptocurrency record, passing the $17,500 mark in 2017. Perhaps you too want to take a position in Bitcoin, but you’re not sure how. Here’s a guide.
Just to be 100% clear, this is not an endorsement for any cryptocurrency – Bitcoin, Ethereum, Ripple, or otherwise. It’s also not our suggestion that you should consider investing in cryptocurrency in any way. What we do know is that the markets for these mostly untested, unproven digital assets are unpredictable. Just check out the volatile ride Bitcoin was on over the past years.
– What Is Bitcoin?
Bitcoins, which also are called BTC for short, are the units of currency in the Bitcoin system. The term “cryptocurrency,” applies to any digital currency that uses cryptography to form a secure transaction between two people instantly, anywhere within the world. Created in 2009, Bitcoin is the original cryptocurrency.
Bitcoin is a decentralized (controlled by several entities rather than a single one.) digital currency that can be bought, sold, or traded as a commodity. It can also be used to buy stuff – like pizza, beer, cars, or whatever you’d like. Bitcoin is different from fiat money because it uses peer-to-peer technology to work. That means that there’s no central authority like the U.S. Treasury to track transactions or print new money. These functions are built into Bitcoin itself through the use of blockchain technology. Blockchain powers Bitcoin and other cryptocurrencies, which is one reason it’s such an innovative concept. What is the blockchain you ask? Consider it as sort of a digital version of a public ledger, during which all transactions are recorded for everybody to ascertain. It is the first mechanism for trust during the transactional system.
– How Is Bitcoin Made?
The network creates Bitcoins as a gift for the “mining” process, a computational effort during which blockchain transactions are verified. The details of this process are a bit technical. It involves severe mathematical problems, software to unravel the issues, and a schedule to ensure that the solutions are discovered on a highly regulated basis. But all you need to understand is that each time a mathematical solution is found, a replacement “block” on the chain is made. And Blocks cannot be altered or removed once accepted by the network. The Bitcoin manufacturing system allows six blocks to be mined every hour. Because it gets harder over time, the system is predicted to get fewer Bitcoins over time.
– How to Buy Bitcoins
You can buy Bitcoins directly from people using online marketplaces, no different than any other product or service. Alternatively, you can make use of digital currency exchanges or brokers like Coinbase, Bitstamp, Kraken, and Gatehub. Coinbase is arguably one of the most reputable cryptocurrency exchanges. For a beginner, it’s the safest and easiest to use.
You’ll also need a wallet, which acts as an area to store your digital currency. You’ll need one regardless of which exchange you decide to use. The wallet will store your private key (a secret 256-bit string number that gives you access to your Bitcoin. Your private key also allows you the liberty to maneuver across marketplaces.
– Trading Bitcoin
Bitcoin trading is typically done on exchanges that provide varying degrees of privacy, safety, security, and control over your investment and personal information. To learn more about Bitcoin trading, visit the bitcoin era login page to get started.