The internet is going crazy about it.
Bitcoin has become THE frenzy of the 21st century.
Everyone who can take a little risk and wants to invest their money in a once-in-a-lifetime opportunity for earning great returns, is interested in Bitcoin this year. Every coffee machine conversation today is centered on this cryptocurrency that is providing crazy returns to its investors. If you want to dive into this trend, make sure you make informed decisions. Our small guide will help you figure you way around the hotbed of digital investments and find a way out.
Why Bitcoin?
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Bitcoin is the first and the most popular cryptocurrency in the world. As the first digital currency, Bitcoin took the world by storm. However, what began as a project for transferring value digitally between individuals, soon became the hottest investment on the market. It presents a decentralized idea of money that isn’t controlled by any government. It works on blockchain technology (more about it in later posts).
You should buy Bitcoin because rising investor interest has made it one of the most valuable digital assets available today. Though it is highly volatile, there is an upside to its price movement that has continued unhindered, especially in the past 2 years. The liquidity of the market is also high. If you find that cryptos are not for you, you can move out any minute.
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What makes it so special?
Bitcoin has experienced a massive uptick in value since 2010. If you invested $5 of your money to buy 2000 Bitcoins in 2010, you would be worth millions today. In May 2017, your value will have shot up to $4.4 million. By December 2017, your investment’s value would have gone up to $37,579,990. Such humongous increase in value within 7 years is a miracle in its own right. This value increase has increased investor interest in the currency further.
However, what makes Bitcoin really special is its system of record and proof of work. Bitcoin has allowed people to transfer value to each other without having to wait for banks to process their money. The value of your BTC is immune from inflation or even control or influence from central banks and governments. This helps you in working with a currency that is totally democratic at its very core.
How does the Bitcoin network work?
The Bitcoin network is designed as a digital ledger. When you make transactions of value in Bitcoin, you are not transferring value to a bank account or even a company or individual. Instead, you will be making payments to a digital wallet. The wallet addresses also keep the identity of the sender and receiver 100% anonymous. These transactions are then verified by your network (more on this in the next post) and then added to the digital ledger. This is a simpler and easier way to send money.
There are only 21 million Bitcoins in the world. There is no way to create more or less of these coins. However, all of these coins are not in circulation right now. In old days, miners would find gold and other precious metals from mines which will then be used to make coins. A similar, digital process is followed in the Bitcoin network as well. Designated miners use their computers to solve math problems. The more problems they solve, the more Bitcoins are unearthed from the network. They are rewarded with a few coins to do this process.
However, if the number of miners increases, the math puzzles will become harder. This will discourage a few miners from entering the market as coins will become difficult to find. As soon as the status quo is restored, the problems will come back to normal. This process goes on and on to preserve the valuation of the currency. It is suggested that the last Bitcoin will be mined in 2140.
Who should invest in Bitcoin?
Anyone with a high-risk appetite should be investing in Bitcoin. As the currency is highly volatile, short term trading is good only for experienced day traders. Others can buy the currency and go long on it to avoid any short-term volatility affect the value of their coins. If you are familiar with financial markets, trading in Bitcoin will be easier.
When is the right time to invest in Bitcoin?
There is no right time as Bitcoin is an innovative product. However, the momentum is on the upside and everyone wants to have a pie of it. Though, the value of Bitcoin has gone up and experts expect it to go further higher. Hence, investment in bitcoin depends on one’s risk appetite.
Where to get Bitcoin?
You can get Bitcoin transferred to you via your digital wallets. However, this happens only when you are providing a product or a service. If you are a business owner, you can start receiving some of your receipts in Bitcoin. However, if you are an investor, you will have to visit a cryptocurrency exchange. These are markets where people buy and sell their cryptos. Coinbase and BitStamp are some places where you can place an order for a set number of Bitcoins at a certain price. If somebody is interested in selling their coins for the same price, your order will be completed and you will become the owner of this currency.
Are there any risks to buying Bitcoin? Yes. As bitcoin is very volatile, your investment’s value will fluctuate wildly, at least in the short run. However, if bitcoin gets acceptance then there are chances that it can go up further. The founders are reaping the fruits of their belief. So if you are lucky then even you may.
Want to know more about Bitcoin and the technology behind the maiden cryptocurrency of the world? Keep reading the next posts in the series.
Source :
https://medium.com/@cryptohottie/how-to-get-into-bitcoin-150fc325e6ae?source=rss------money-5