Introduction Bitcoin is in the news, on social networking sites and almost everywhere. You might be wondering what it is? Bitcoins are becoming popular these days and many people consider it to be a good source of investment. The practice of using or mining bitcoins is legally accepted in many countries but is illegal in certain countries. This article explains a few queries of the common men who are new to bitcoins. Before investing in bitcoins, do a thorough research and learn about it in detail so that you will not end up in trouble.
What is bitcoin? Bitcoin is a cryptocurrency. This digital currency has gained importance in the recent past. May consider it to be a good investment and of course, it has shown a good growth. However, there were falls as well. This currency was created in 2009 by Satoshi, an anonymous person. Bitcoin is abbreviated as BTC. Bitcoins are now even accepted by certain retailers, which will definitely increase its importance. Like cash, you can spend bitcoins and buy products. The advantage being the value for bitcoins can rise, which will fetch you more products.
What is a bitcoin wallet? Like how we keep our cash in our wallet, we need a bitcoin wallet to keep our bitcoins safe online. A secret key is there for every bitcoin address in the wallet, which is required to send and receive money from the wallet. Unlike the normal wallets, bitcoin wallets are software programs. There are different types of bitcoin wallets like the hot wallet and cold wallet. Hot wallets are the ones that are connected to the internet and cold wallets are the ones which are offline. Further, the bitcoin wallets are classified into:
There are other classifications as well. Some of the best bitcoin wallets are Coinbase, Paper wallet, Electrum etc. One has to consider the safety factor while choosing a bitcoin wallet. The bitcoins, if stolen or lost is lost forever as there is no central mechanism to track it and get it back.
What are bitcoin exchanges? Bitcoin exchange is a market where you can buy and sell bitcoins. It is a digital market. Certain fees will be charged by all bitcoin exchanges on all completed transactions. In order to carry out the transaction through an exchange, the user has to first register in the exchange. There are many bitcoin exchanges. You need to select exchanges based on your country of residence, payment method etc. CoinBase, BitCoin, Coinmama, Changelly, BitQuick, BitPanda etc are some of the known bitcoin exchanges.
How do we buy bitcoins? In order to buy bitcoins, you need to first create an account using Bitcoin.org or Coinbase.com, then find a bitcoin exchange. You can purchase bitcoins from the exchange by paying your local currency. The next step is to secure your bitcoins by moving it into a bitcoin wallet which is already created. You can also buy bitcoins through bitcoin ATMs.
What are the various payment methods available? The various payment methods for buying bitcoins are bank transfer, cash, PayPal account, credit card, debit card and so on. You can either buy it online or through bitcoin ATMs. Consider the safety of each payment method before finalizing one.
What is Bitcoin ATMs? Like the normal ATMs, there are bitcoin ATMs as well. Anyone who has an interest in buying bitcoins can use the bitcoin ATMs to buy it, provided they have one near them. By inserting or paying cash, bitcoins will be sent to your wallet. By using Coin ATM Radar, we can find the bitcoin ATMs near our area.
What is a Bitcoin address? A bitcoin address is a unique address used for each transaction involving bitcoins. You need bitcoin address to send and receive bitcoins. When sending bitcoins you will send it to the address of the person whom you want to send it to. Also when you are receiving money, it is better you generate a new bitcoin address every time.
What is Bitcoin Mining? It is a process by which new bitcoins are released. For that one needs to solve puzzles which are complicated. The one who first solves the puzzle will be rewarded. You just need an internet connection and required hardware for bitcoin mining. Application Specific Integrated Circuit (ASIC) is a hardware designed for bitcoin mining.
Conclusion Even though bitcoins has put forward a rapid growth in the past, it is a highly risky investment. The future is unpredictable. It is not related to any government and also its value is subject able to ups and downs. There is no intermediary like a central bank or so involved in trading Bitcoins. This makes it even riskier. But if you know how to deal with the risk, then definitely you can make money out of it. However, one needs to know in and out about Bitcoins before involving themselves in bitcoin trading. The intention of this article is to give you a brief idea about bitcoins, but it has not covered all the aspects. You will have to do a research and understand in depth and accordingly choose the wallet, exchange and payment method.
As bitcoin is not backed by any Govt or Govt agency. It is a very risky investment. The value of bitcoin has gone up considerably in past and that has tempted people to invest in that. Due to this, their demand rose further and the market price shot up.
There are many different bitcoins available in the online but all have not grown up with similar speed as the original bitcoin by Santoshi.
The mining of bitcoin will come to at an end at a predetermined value and after that no new bitcoins will be added to the kitty which eventually may fuel its price to higher levels.
This is a virtual currency masterminded by its creator using complex mathematical puzzle method to mine it and as it became popular the craze to hold it increased day by day.
Now at the present juncture, it is very difficult to predict its future but any adverse thing can bring it down drastically and people may incur heavy losses.
While the author made good attempt to portray about the pros and cons of bitcoins, as for as India is concerned the crypto currency is banned and therefore we should not give much importance to such information. It is just like share market and we do not know the velocity of the demand for the coin and its upsurge. Better to keep away.
Nicely explained about bitcoin. But as far as India is concerned cryptocurrency is banned. A few years back one of my colleagues told me the benefits of buying it and he tried to convince that I should buy it as money will grow in the future. But I didn't buy it whereas few of my other colleagues bought it but after two years the value of the bitcoin reduced and whatever money they put on it was lost.