Bitcoin appeared a few years ago and has attracted some attention since then. There were a lot of talk about this new idea of a digital currency. It was considered more a test or an idea than a real project. It all has changed since then. In 2017, Bitcoin got in the news for good. It was one of the most commented subjects on finance reviews.
Bitcoin value has reached unprecedented peaks. A great amount of money is currently involved in Bitcoin exchange and, therefore, it started to attract a lot of people.
Most people don’t really know much about Bitcoin, though. It is a new and revolutionary kind of currency. Before deciding to invest in it, it is best to know more about that famous digital currency.
Bitcoin was created in 2008 by Satoshi Nakamoto. The identity of Satoshi is not confirmed, so no one knows if he is really one person or a group of people. The name might as well be an alias. It is a peer-to-peer electronic cash system. It is the world’s first decentralized currency. That means that it is not controlled by any bank or government.
Just like Dollar or Euro, Bitcoin is a currency. The difference between them is that Bitcoin is completely virtual (you can’t find any in your pocket).
To create Bitcoin there is a process called “mining”. During mining, computers connected to a network compete with each other to create the currency. They have to solve complex math problems. The machine that solves it first, gets a Bitcoin block.
The network adjust the level of difficulty of the problems, so that the currency grows within a limited spectrum. The maximum amount of growth is supposed to be 21 million units until 2140.
That number was established by the creator of the Bitcoin, the mysterious Satoshi Nakamoto.
In the beginning, anyone could mine. You would only have to leave your computer on for a few days. The increasing interest, however, made it impossible for common people to mine nowadays. Because of the competition, only supercomputers can now mine for Bitcoin.
If you don’t mine, you have to get your Bitcoins elsewhere. That is how the trading market for Bitcoin has appeared. There is an increasing interest on Bitcoin and, as any other currency, that drives its price up. There are many different online platforms for Bitcoin exchanging. Those Digital Exchanges are different from the usual ones, because they don’t follow the same rules. Although some say that is not a good thing, it has its advantages.
The trade is easier and demands less bureaucracy. You can exchange you regular, physical money for Bitcoins. You can also exchange it directly with the Bitcoin owner, paying a small fee to the Exchange platform.
There are a lot of different Exchanges to use if you want to get some Bitcoins. It is best to research what suits your needs better. There are some that accept a large variety of currency, some even pay or accept payment in gold.
Basically, the transactions you make are anonymous. You don’t know who you’re selling to or buying from. There are some security measures, assured by the Exchange so that no fraud is committed. You have to register at the Exchange and state your personal information as well as a valid payment method. It can be a credit card or a bank account. After that, there will be created a wallet for you on the Exchange.
That is a digital wallet. It is made for keeping your Bitcoin safe and making transactions easier and faster. After you register and get a wallet, a code with letters and numbers is assigned to you.
That is your “address”. It is that code that other people will see when trading with you. Only the Exchange has your real personal information. All the transactions are registered and open to the public, but the addresses are the only thing that can identify the traders.
There is still one other way to get bitcoins: you can accept them as payment. Bitcoin is a currency and can be used as such. There are many places already accepting Bitcoin as payment for their products and services. Some Exchanges offer specific solutions for businesses, permitting the safe trade of Bitcoin for services and products.
In Japan, the projection is that up to 300 thousand establishments accept Bitcoin as payment until the end of 2017.
Bitcoin follows the same market rule as anything else. That has caused its price to reach an unprecedented peak in 2017. Historically, the currency is very volatile. In 2014 it has suffered a major loss in value, but it was able to recover its popularity in the following years.
In 2017, the interest over Bitcoin really exploded. In January, it was valued at approximately one thousand dollars. In December, it is valued at way over 10 thousand dollars.
The digital currency enthusiasts believe that growing interest and acceptance of the Bitcoin will keep rising its value. The critics claim though, that the currency is going trough a bubble and it may be about to burst.
There is a lot of people that have made good money with Bitcoin. It is always recommended to be careful when dealing with such a volatile market. Being informed is the best way to make a decision.