Thinking of Investing? Think the Bitcoin Way
What is Bitcoin?
If you’re here, you’ve heard of Bitcoin. It has been one of the biggest frequent news headlines over the last year or so – as a get high quick scheme, the end of finance, the birth of truly international money, as the end of the world, or as a technology that has improved the world. But what is Bitcoin?
In short, you could say Bitcoin is the first decentralised system of money used for online transactions, but it will probably be useful to dig a bit deeper.
We all know, in general, what ‘money’ is and what it is used for. The most meaningful issue that witnessed in money use before Bitcoin relates to it being centralised and controlled by a single entity – the centralised banking system. Bitcoin was invented in 2008/2009 by an unknown creator who goes by the pseudonym ‘Satoshi Nakamoto’ to bring decentralisation to money on a global extent. The idea is that the money can be traded across international lines with no difficulty or fees, the checks and balances would be distributed across the complete globe (instead of just on the ledgers of private corporations or governments), and money would become more democratic and equally easy to reach 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 its invention was to solve the issue of centralisation in the use of money which relied on edges and computers, an issue that many computer scientists weren’t happy with. Achieving decentralisation has been attempted since the late 90s without success, so when Satoshi published a paper in 2008 providing a solution, it was overwhelmingly welcomed. Today, Bitcoin has become a familiar money for internet users and has given rise to thousands of ‘altcoins’ (non-Bitcoin cryptocurrencies).
How is Bitcoin made?
Bitcoin is made by a course of action called mining. Just like paper money is made by printing, and gold is mined from the ground, Bitcoin is produced by ‘mining’. Mining involves solving of complicate mathematical problems regarding blocks using computers and adding them to a public ledger. When it began, a simple CPU (like that in your home computer) was all one needed to mine, however, the level of difficulty has increased considerably and now you will need specialised hardware, including high end Graphics Processing Unit (GPUs), to extract Bitcoin.
How do I invest?
First, you have to open an account with a trading platform and create a wallet; you can find some examples by searching Google for ‘Bitcoin trading platform’ – they generally have names involving ‘coin’, or ‘market’. After joining one of these platforms, you click on the assets, and then click on crypto to choose your desired currencies. There are a lot of indicators on every platform that are quite important, and you should be sure to observe them before investing.
Simply buy and keep up
While mining is the surest and, in a way, simplest way to earn Bitcoin, there is too much hustle involved, and the cost of electricity and specialised computer hardware makes it far away to most of us. To avoid all this, make it easy for yourself, directly input the amount you want from your bank and click “buy’, then sit back and watch as your investment increases according to the price change. This is called exchanging and takes place on many exchanges platforms obtainable today, with the ability 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, then you will understand crypto-trading easily. There are Bitcoin brokers like e-social trading, FXTM markets.com, and many others that you can choose from. The platforms provide you with Bitcoin-fiat or fiat-Bitcoin money pairs, example BTC-USD method trading Bitcoins for U.S. Dollars. Keep your eyes on the price changes to find the perfect pair according to price changes; the platforms provide price among other indicators to give you proper trading tips.
Bitcoin as Shares
There are also organisations set up to allow you to buy shares in companies that invest in Bitcoin – these companies do the back and forth trading, and you just invest in them, and wait for your monthly benefits. These companies simply pool digital money from different investors and invest on their behalf.
Why should you invest in Bitcoin?
As you can see, investing in Bitcoin demands that you have some basic knowledge of the money, as explained above. As with all investments, it involves risk! The question of whether or not to invest depends thoroughly on the individual. However, if I were to give advice, I would advise in favor of investing in Bitcoin with a reason that, Bitcoin keeps growing – although there has been one meaningful expansion and bust period, it is highly likely that Cryptocurrencies as a whole will continue to increase in value over the next 10 years. Bitcoin is the biggest, and most well known, of all the current cryptocurrencies, so is a good place to start, and the safest bet, currently. Although volatile in the short term, I speculate you will find that Bitcoin trading is more profitable than most other ventures.