Cryptocurrency 101: What You Need To Know About Bitcoin

Cryptocurrency 101: What You Need To Know About Bitcoin

In all honesty, the concept of digital currency is nothing new, but its awareness and use have become more widespread in recent years. That being said, it still feels inaccessible for some people. However, with the right preparation and knowledge at your disposal, you can make a lot of money out of investing and trading with cryptocurrency. One of the most popular cryptocurrencies around today is Bitcoin; let’s get into it.

What is Bitcoin & How Does it Work?

An anonymous entity developed Bitcoin who called themselves Satoshi Nakamoto; decidedly, little is known about the creator as they have never been identified. Bitcoin, as an idea, first emerged back in 2008 when it was mentioned in an email to cryptographers who subscribed to a service. The program itself launched the following year, and its use has been steadily growing ever since.

Bitcoin, in essence, is a form of digital money. There is no physical form to it; it is mined, traded, and used exclusively online. There is no need for any banks because there are no central points of the transaction. Instead, it operates via a global network. Transactions are kept track of through a public record known as a blockchain. Making it hard to remain anonymous. The price of Bitcoin varies too; their value is dictated by supply and demand. Therefore, their popularity directly translates into their price.

It’s Use Today

Bitcoin is still very much in use today as its popularity has remained steady since its conception. It is still one of the most sought-after choices on cryptocurrency trading sites. Users have the option to buy, sell and trade. In order to invest in Bitcoin, you first need to secure yourself a digital wallet that allows you to keep your cryptocurrency secure. The wallet keeps out unauthorized users and contains all of the data you need to send and receive Bitcoins. Most of the time, it is easy to set up a digital wallet; for example, Paxful is a trusted Bitcoin Market that has a number of resources, including all of the information you need to set up a digital wallet.

Bitcoin & Fiat Currency

Fiat currencies are notoriously precarious; there are a lot of factors that can affect their value which makes them volatile. Most countries have a devastating financial crisis in their recent memory to illustrate this point. The purchasing power of fiat currencies can greatly diminish over time, meaning that the money just doesn’t go as far as it once did. Bitcoin, however, is not subject to these same factors. The supply is finite, and it is carefully monitored. Which means it can retain its value over time. 

Investment Strategies

Bitcoin can be a great asset for those interested in investing. That being said, without the correct strategy, it can be a little risky. When it comes to investing in any asset, you need to come up with a solid strategy. Investing in cryptocurrency is often cyclical; it is subject to fluctuations. The best thing that you can do is to start off small. And learn everything you can about investing in cryptocurrencies. To ensure that you aren’t taken advantage of or make mistakes.

You also need to ensure that you are using the best platforms possible. This is because there are both high- and low-quality options. Some cryptocurrencies represent a flash in the pan, are trendy, or are simply technical novelties. One should avoid these. As with any digital asset, there is also the potential for scams. However, they are few and far between. You can avoid scams by doing your due diligence and making sure that you have chosen a credible platform.

Future Possibilities

It is hard to say what could happen in the future when it comes to cryptocurrency. However, it does make logical sense that we can expect to experience a growing dependence on digital currencies in a digital world. There are those out there that believe that digital currencies could one day become the main form of payment. The truth is that either way, this is probably a long way off. This is because cryptocurrencies aren’t subject to the same legislature as traditional forms of money. In order for wider adoption, the government would need to increase its control over them.

The Bottom Line

Bitcoin has made dramatic advancements since its inception, and this shows no sign of stopping. However, as mentioned above, Bitcoins’ numbers are finite. As a result, there is no telling what could happen once they have all been mined, either way, digital currencies are set to increase in use. And hold a lot of potential. Therefore, if you want to invest in cryptocurrency, it is paramount that you do your research beforehand to offset the risks of investing in assets.

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Cryptocurrency 101: What You Need To Know About Bitcoin

Cryptocurrency 101: What You Need To Know About Bitcoin