What is Bitcoin?
The most searched term in the year 2017 is Bitcoin by a wide margin. If you’re not familiar with the currency, here’s what you need to know.
Bitcoin (BTC) is a digital asset and a payment system invented by Satoshi Nakamoto. Bitcoin is a peer-to-peer system where transactions take place directly between users – without an intermediary.
This allows for lower transaction fees than traditional online payment mechanisms and it ensures privacy since there’s no need to exchange personal information. But what really makes Bitcoin so special is its underlying technology.
Bitcoin uses blockchain technology. For those unfamiliar with the term, blockchain is a public ledger of all transactions that have ever been executed. It is constantly growing as new "blocks" are added to it with a new "block" generated approximately every 10 minutes.
Transactions are confirmed via a process called "mining", which involves using computer power to solve complex mathematical problems. New transactions are then added to the end of the "block" in a linear, chronological order, and they are not stored in any central location.
What is Ethereum?
Ethereum is a blockchain-based, open-source software platform that enables developers to build and deploy decentralized applications, also referred to as "smart contracts".
Imanol Pérez de Rozas, co-founder of Ethereum along with Vitalik Buterin, started the project as an open-source software platform to enable developers to build decentralized applications.
The platform is designed to support scripting languages, making it possible for non-coders to create applications running on the Ethereum blockchain and making it vastly more accessible to the hedge fund community.
Ethereum has its own token called ether, which can be traded through exchanges for other cryptocurrencies or fiat money.
Ethereum has gained popularity following bitcoin's success, offering an alternative to bitcoin or as a complement to bitcoin since it allows the creation of a wide variety of applications where bitcoins would be more limited in that respect.
Other Cryptocurrencies
Bitcoin has become increasingly popular, and the value of Bitcoin has gone up. But a lot of other cryptocurrencies are exploding now. There’s a pretty good chance that you’ve heard of Ethereum, Bitcoin cash, or Litecoin.
There are several other cryptocurrencies that are also being traded that aren’t as much in the news, yet they also have the potential to grow at the same rate if not faster.
One of the major reasons why cryptocurrencies are doing so well is because they have some real-world applications. That’s what’s driving their popularity and value. You may have heard of blockchain, which is enabling the use of different products and services in order to apply blockchain technology to everyday life. Ethereum has a lot of potential especially because of their smart contracts feature. You can use Ethereum smart contracts for anything from insurance to real estate, commodities trading, and more.
And there’s no doubt that Ethereum also has the potential to grow as much as Bitcoin.
How Cryptocurrencies Work
Before we talk about the right time to buy cryptocurrency, we need to know more about it. Bitcoins (BTC), the most popular cryptocurrency, was invented by Satoshi Nakamoto in 2008 as an alternative to existing banking systems. The idea was to make online transactions more transparent and easy to track.
The process of transacting with a cryptocurrency like BTC is similar to traditional banking. First, Bitcoins are mined, and then used as currency. However, a major difference is that the BTC blockchain is decentralized. This means there is no central entity governing the currency. Instead, the consensus is maintained by the computers supporting the blockchain.
Today, BTC is mostly used online to buy goods, either on the dark web or from legitimate retailers. A lot of people view it as an investment as opposed to currency.
Unlike centralized currencies, cryptocurrencies run on the principle of peer-to-peer technology. This means that there is no central bank or governing authority that controls it. Instead, all transactions are recorded using blockchain technology. This creates a virtual public ledger that is transparent, robust and secure. However, this also makes cryptocurrencies vulnerable and easier to hack.
So how can you tell the right time to invest in cryptocurrency? In this post, we’ve compiled the some of the unprecedented trends, new research, and technologies that make cryptocurrency an interesting investment alternative.
Blockchain Technology
Blockchain technology is probably one of the most talked about technology of this decade. It has gained popularity not only from the fact that it is a revolutionary technology, but also due to the huge amounts of money being raised through it. In short, it is a distributed public ledger that consists of blocks that have a link to other blocks within the chain. This ledger is open source and can be used for recording transactions between two parties, without the need for a central third party.
Bitcoin Mining
It’s Not-So-Easy To Get Rich Quick Off The Hype Anymore
If you want a better understanding of the mining equipment available, as well as a broader idea of how bitcoin mining works, check out An Idiot’s Guide to Building an Ethereum Mining Rig.
Mining Rigs come with software that lets you control the whole operation from your laptop. But if you obviously aren’t a tech genious-I am not, so, here’s what I recommend you do.
Ring up your tech savvy friends, or go to your local tech store, tell them you want to get in on Bitcoin mining, but you don’t know anything about it and need some help/advice. Tell them you need a machine or rig that’s ready to go … all you have to do is plug it in and let it run. That way you won’t need to learn to operate any specialized software. You’ll be mining in a jiff!
Oh, and don’t feel bad being the only person in your town who’s in it to make money. After all, you have to start somewhere.
The Advantages of Bitcoin (And Cryptocurrencies, in General)
Quite lately, cryptocurrencies seem to be all over the web. With the advent of online shopping, cryptocurrencies have found a new application. They are also being used as a combined medium of exchange in the digital gaming community, particularly in the new games like Bitcoin Billionaire. A lot of people are even investing in cryptocurrency as a way to diversify their cash into safe-haven assets. Yet, most think that it’s still a bubble that will eventually burst. But the question remains: when is the right time to invest in cryptocurrency (or should you)?
Here Are the Advantages of Bitcoin (Which Is the Cryptocurrency that Most People Seem to Be Interested In)
{1}. Great potential for investments: With the steady growth and stability of Bitcoin, you can be sure that investments in Bitcoin are more than secure.
{2}. Encouraging return: With the amount of profit that you can get from investing in Bitcoin, you can be sure that you won’t lose your money. You’d get several times of your investment at least.
{3}. Great for the future: Think about how much potential new fields have to offer. With Bitcoin, for example, we get to expand the way banking works.
The Disadvantages of cryptocurrencies
Government Restrictions – the Big X Factor Hanging Over cryptocurrencies
Are you interested in investing in Bitcoin? Have you been intrigued by the wild price fluctuations of Bitcoin? Have your heard of the term cryptocurrency? If so, then you’re not alone!
In short, Bitcoin is a type of cryptocurrency. All cryptocurrencies are digital currencies, but not all digital currencies are cryptocurrencies … so just what is a cryptocurrency?
A cryptocurrency, literally, is a currency that is designed to work as a medium of exchange using cryptography to secure the transactions. Cryptography is a method of storing messages or information that can only be access and read by the intended recipient.
It uses Mathematical algorithms that are run through a computer using encryption. This way only the intended recipient can access and read the message.
It is designed to be secure, using encrypted codes for transactions, so the currency can only be used as intended.
It is similar to online transactions where you need an account to send and receive funds, but they are controlled by an individual rather than a bank.
How Widespread is Bitcoin?
You’ve probably heard a story or two about someone who bought into Bitcoins a few years ago, held onto them, and now finds himself or herself sitting on a pile of money. For the uninitiated, this often stories are hard to believe.
But how widespread is Bitcoin, and is the cryptocurrency newbie hype? (And aren’t cryptocurrencies basically a scam?)
To answer that, we have to take a step back and look at the history of Bitcoin. To understand the current market hype, we have to understand the roots of cryptocurrency.
Let’s get one thing clear: Bitcoin is not a new phenomenon. It first surfaced back in 2008 when a developer by the name of Satoshi Nakamoto published a white paper. But it wasn’t until 2009 when the first batches of Bitcoins were released for trading.
During this time, Bitcoins were actually more like poker chips. Bitcoin’s early adopters were hardcore techies and programmers that mined Bitcoin and participated in trading with each other.
Scams and Risks of Buying cryptocurrencies
Bitcoin is a highly risky investment that could end up costing you a lot of money. Trying to convince others to buy bitcoins is a serious case of throwing caution to the wind. In simple terms, this is an incredibly risky market to begin trading in.
Here I am going to provide you with no nonsense reasons why you need to be very careful with cryptocurrencies. These tips should help to convince anyone who may be about to throw their hard earned money into the cryptocurrency market.
The first thing to consider is the fact that bitcoins are intangible. In essence, they cannot be physically held. That’s right, they cannot be touched or physically examined.
This can be a serious drawback for buyers. There is no way bitcoins can be verified, because there is no way to verify their source.
Of course, you can check the transaction history for all bitcoins, but that can be easily manipulated and does not prove the validity of the coins themselves.
In essence what you are buying is a digital code that has been created by a computer system with no government backing. And you can buy these digital codes from anybody.
That obviously exposes you to scams.
It is possible to get scammed by companies that don’t actually exist, they just take your money and disappear, without giving you anything at all.
Common Cryptocurrency Scams
Investing in cryptocurrency can be an exciting and profitable business. However, it is also riddled with scams.
Before putting your money into any investment, have an exit strategy to ensure you don’t lose all your money along the way.
You should be aware that anyone can create a cryptocurrency or cryptocurrency related asset. There are as many cryptocurrency offerings as there are stocks.
If you’re not sure of what you’re investing in, you should reconsider. Many successful investors have lost a significant amount of money because they trusted their money with shady people who created functioning cryptocurrency services or products “ only to take off with their funds at the first sign of a downturn.
If you’re in doubt, do your homework. Many scam companies use social media and paid promoters to lure people in. Put in the time and effort to research all the different cryptocurrencies before you invest.
Another notable cryptocurrency scam is a concept called an Initial Coin Offering, or ICO. This is the process of offering a new cryptocurrency in exchange for bitcoins or other tokens. It can be compared to stock market IPOs.
How to Buy cryptocurrency and Bitcoin and Ethereum
Cryptocurrency is an encrypted decentralized digital currency transferred between peers and confirmed in a public ledger via a process known as mining.
Cryptocurrency was invented by a person named Satoshi Nakamoto in 2009. Nakamoto developed Bitcoin and named it as a peer-to-peer currency. It was the first decentralized cryptocurrency which was traded by users through the internet without the involvement of a third party. When other digital currencies (altcoins) started emerging, Bitcoin was often referred to as the mother of all.
Cryptocurrency can be purchased or sold online on exchanges in what is known as a trade. Once you have your cryptocurrency, you can use them to purchase goods or services. You or any other user of cryptocurrency can also send to anyone paying only a small fee. The fee is called the “mining fee,” and it is how miners are paid. Anyone can become a miner.
How to Start Investing in Cryptocurrency
There are, however, some challenges you need to overcome initially with crypto. I have provided some measures below, some of which you may already know.
Buy Cryptocurrency Via a Cryptocurrency Exchange
Storing Your cryptocurrencies
There are several ways you can store your cryptocurrencies, but we recommend using one of the following:
Exchanges – If you would like to invest in existing cryptocurrencies but do not have the technical knowledge to actually buy them, you can use an exchange. This is not a method of storing your cryptocurrency for the long term, but is a good option if you would like to buy specific coins without having to purchase the hardware necessary to store them in a more secure way.
Mobile/Web Wallets – Online wallets are great for creating a quick access to your coins if you would like to use them to purchase goods or services. It is difficult to do this with a hardware or paper wallet, but online wallets are easy to use and easy to access. They also offer a backup feature that allows you to download your wallet onto another device in the case that you lose or break the device you were using.
Hardware Wallets – A hardware wallet is a physical device that you can use to store your cryptocurrency. Hardware wallets are expensive but also extremely secure. If you are looking for security and don’t mind the price, this is a great way to store your cryptocurrency.
Paper Wallets – If you are worried about the security created online wallets but want to avoid the price tag of a hardware wallet, then a paper wallet is what you need.
Other Ways to Invest in Cryptocurrencies
Bitcoin and other cryptocurrencies can be an exciting investment, but they’re also highly volatile and still largely experimental.
Many people who have spent time researching them are worried that cryptocurrencies are a bubble mainly because buying and selling of the currencies is rare, and the prices are mostly being driven by speculation. You can certainly make money on cryptocurrencies, but it’s hard to know what the future will bring, especially since the space continues to evolve rapidly.
Choosing to invest in cryptocurrencies is a big gamble. It’s not like putting money into stocks, where you can generally determine the value of your shares in advance. And because you can’t easily buy and sell cryptocurrencies directly on exchanges, it’s also tricky to determine just how much money you’re making or losing.
The bottom line is it’s not going to be easy for anyone to make a lot of money in cryptocurrencies. But given their growing popularity and improved visibility, you may want to consider getting educated about them and keeping an eye on them.
Like other types of investing, there are plenty of ways to invest in cryptocurrencies without having to fork over thousands of dollars to buy a bitcoin. While you can certainly buy some cryptocurrencies with your U.S. dollars, there are several other virtual currencies you can use and get involved in.
Is it Time to Get on the Bitcoin Bandwagon?
In this article I share 5 good reasons you should invest in bitcoin now. If you haven’t already got a bitcoin wallet, then creating an account and buying bitcoin can be done in minutes. If you’re feeling nervous about the volatility of bitcoin price, you can start with buying a small amount – although the low transaction fees generated by using bitcoin instead of a more traditional payment method mean this won’t cost you much.
There are other reasons why now is an ideal time to buy bitcoin, including:
- Adoption is widespread
- It’s a store of value
- Custody is easy
- It’s getting easier to own bitcoin outright
Two Investment Scenarios
And When Is the Right Time to Invest?
If you know where you want to start your career it’s a good idea to start taking action as soon as possible.
If you start early, you’ll have more time to make a little money and learn from it. When you’re more experienced, you’ll be able to make more serious money and play with even more cash.
Don’t put your investment off until you become successful. The time to start is now.