Bitcoin could be the cryptocurrency that most people talk about today. However, this virtual currency is an enigma to most individuals the world over. This digital money is complex, fascinating, new-age currency. It's only available in the digital form and you can use it somehow anonymously.
Anybody that hasn't heard about Bitcoin might think it's something suspicious. Some people even consider this digital money dangerous. Some people have heard about Bitcoin but are doubtful about its legitimacy. Well, Bitcoin is electronic money that people use the same way they use fiat or traditional cash. But before investing in this electronic money, learn certain things about it.
What is Bitcoin?
First thing is to understand Bitcoin. Most people define Bitcoin as a digital or virtual currency that people use to pay for services and items the same way they use the U.S Dollars or Euros. However, these could be the only similarities between Bitcoin and fiat cash.
Unlike fiat money, Bitcoin is:
- Digital: You can't get physical Bitcoin bills or coins. That's because it is an online or virtual form of money. Blockchain tracks this cryptocurrency and this grows the records of this virtual currency. As such, you can get a complete history of every Bitcoin transaction you complete.
- Decentralized: Bitcoin doesn't have a central bank or government agency that controls its supply.
- Pseudo-anonymous: Bitcoin is tied to the ID of a wallet and not personal information. However, this doesn't mean Bitcoin is entirely anonymous.
Satoshi Nakamoto, an entity with this pseudonym developed Bitcoin in 2008. This entity published the white paper that explained the operations of Bitcoin before people started mining and trading it a year later.
The reason why Bitcoin attracts many people is the absence of banks and intermediaries with hefty fees. And because it's available online only, you use a wallet ID to complete Bitcoin transactions rather than personal information like your name.
You can purchase Bitcoin via BitIQ using a debit or credit card, wire transfer, or hard cash. However, you must download, install, and register with a Bitcoin wallet first. Your Bitcoin wallet will provide the wallet ID that you will need to receive and send Bitcoin. It's also the place where you will store this cryptocurrency, the same way you use a physical wallet to hold credit cards and cash.
Although you can mine Bitcoin, the process will cost you more money and you might not recover your investment. That's because you have to invest in computers with powerful processors. You also need specialized skills to solve mathematical puzzles.
People pay for services and items at online stores that accept cryptocurrencies using Bitcoin. Many companies and businesses around the world accept Bitcoin payments. Also, some airlines allow travelers to pay for flights using this virtual currency. You can also pay for hotel accommodation, foods, and drinks with Bitcoin. However, not every outlet accepts this cryptocurrency. Therefore, take your time to research Bitcoin acceptance where you live or at your travel destination.
Investing in Bitcoin
You can invest in this virtual currency by purchasing it at a low cost and selling it at a higher price. That way, you can make a profit from the price difference. Alternatively, you can purchase and hold onto Bitcoin. That means you can buy this electronic currency and keep it, hoping its value will increase over time.
Learn about Bitcoin to determine whether it's an excellent investment asset. Also, don't invest any amount higher than what you can lose and life goes one. That's because the high volatility of this virtual currency means you can make a lot of profits or lose everything within a short time.