What is bitcoin?
If you're here, you've heard of Bitcoin. It was one of the most common headlines last year – as a rapidly getting rich program, the end of finance, the birth of a truly international currency, as the end of the world, or as technology that has improved the world. But what is bitcoin?
In short, you could say that Bitcoin is the first decentralized money system to be used for online transactions, but it will likely be useful to dig a little deeper.
We all generally know what money is and what it is used for. The main problem that has arisen with the use of money before Bitcoin is that it is centralized and controlled by a single entity – the centralized banking system. Bitcoin was invented in 2008/2009 by an unknown creator who, under the pseudonym "Satoshi Nakamoto", is promoting the decentralization of money on a global level. The idea is that the currency can be traded across international borders with no hassle or fees, checks and balances are spread across the globe (and not just through the ledgers of private companies or governments), and money becomes more democratic and for everyone equally accessible.
How did Bitcoin start?
The concept of Bitcoin and the cryptocurrency in general was launched in 2009 by Satoshi, an unknown researcher. The reason for the invention was to solve the problem of centralizing the use of money based on banks and computers, a problem that many computer scientists were not satisfied with. Decentralization has been attempted unsuccessfully since the late 1990s. When Satoshi published a remedy in 2008, it was overwhelmingly welcomed. Today, Bitcoin is a familiar currency for internet users and has spawned thousands of "altcoins" (non-Bitcoin cryptocurrencies).
How is Bitcoin Made?
Bitcoin is made through a process called mining. Just as paper money is produced by printing and gold is mined from the ground, Bitcoin is created by "mining". In mining, complex math problems related to blocks are solved using computers and recorded in a general ledger. When it started, you only needed a simple CPU (like the one in your home computer), but the level of difficulty has increased significantly, and now you need special hardware, including high-end graphics processors (GPUs) to extract Bitcoin.
How do I invest?
First, you need to open an account with a trading platform and create a wallet. You can find some examples by searching for "Bitcoin trading platform" on Google. These generally have names with "coin" or "market". After joining one of these platforms, click on the assets and then click on crypto to select the desired currencies. There are many important indicators on every platform that you should definitely consider before making an investment.
Just buy and hold
While mining is the safest and, in a way, easiest way to earn Bitcoin, it is too much of an effort and the cost of electricity and special computer hardware make it inaccessible to most of us. To avoid all of this, make it easy for yourself, enter the desired amount directly at your bank and click on "Buy". Then sit back and watch your investment increase as the price changes. This is called exchange and takes place on many stock exchange platforms available today with the possibility to trade between many different fiat currencies (USD, AUD, GBP etc.) and different crypto coins (Bitcoin, Ethereum, Litecoin etc.).
If you are familiar with stocks, bonds or forex exchanges, 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 offer you Bitcoin-Fiat or Fiat-Bitcoin currency pairs. Example: BTC-USD means trading bitcoins for US dollars. Keep an eye on the price changes to find the perfect pair according to the price changes. Among other things, the platforms offer price indicators to give you the right trading tips.
Bitcoin as shares
There are also organizations that allow you to buy stocks from companies that invest in Bitcoin. These companies trade back and forth and you only invest in them and wait for your monthly benefits. These companies simply bundle digital money from various investors and invest on their behalf.
Why should you invest in Bitcoin?
As you can see, investing in Bitcoin requires the basic knowledge of the currency explained above. As with all investments, there are risks involved! The question of whether to invest or not depends entirely on the individual. However, if I gave advice, I would advise investing in Bitcoin because Bitcoin continues to grow – although there has been a significant boom and bust period, it is very likely that cryptocurrencies as a whole will continue value will grow in the next 10 years. Bitcoin is the largest and best known of all current cryptocurrencies. This is a good place to start and is currently the safest bet. I suspect you will find that bitcoin trading is more profitable than most other companies, even if it is volatile in the short term.