Seriously what is bitcoin? If you are like most people you have been racking your brain trying to figure it out for months.
The term bitcoin has been in the investment world for years, but people are still confused on exactly what it is. With so much volatility and upside, everyone seems to be curious to learn more about bitcoin.
Over the past couple of months, we have done some in-depth research on the cyber currency and want to share what we have learned.
With any investment, it is critical to understand what you are investing in before putting your money at risk.
Below you should get a much better understanding of what bitcoin is, how it works, and where you can invest. This new form of currency is absolutely fascinating! It will be very interesting to see where it is headed over the next few years.
What is Bitcoin?
Bitcoin is the first decentralized digital currency, aka digital gold or cryptocurrency. Bitcoin was created by an unknown software developer using an alias Satoshi Nakamoto in 2009.
The idea behind the creation of bitcoin was to produce a currency independent of any central authority, can be transferred instantly and has no transaction fees. This means that there are no middlemen or banks involved.
Why Use Bitcoins?
There are many reasons why someone would want to start using bitcoin. One of the most popular is from a pure investment standpoint. As you can see in the picture above bitcoin has increased over 1,200% within the last year alone (screen show took on 11/30/17).
You can purchase as little or as much as you want. This means buying just a small portion of a bitcoin is possible.
International payments are simple and cheap due to bitcoin not being connected to any country or regulation.
More and more merchants are beginning to embrace this new currency. You can use your bitcoins to buy web hosting services, pizza, online products, basically anything you can think of.
Bitcoin is very similar to services like PayPal and Venmo that allow you to send money to your friends and family.
How to acquire bitcoins
Bitcoins are stored in a digital wallet, which exists in the user’s computer, smartphone or in the cloud and can only be accessed by a login password known to the user.
It is like a virtual bank account that allows you the user to receive and send bitcoins from people with similar accounts, save the bitcoins and even pay for goods.
After doing our research, we found Coinbase to be one of the most reputable wallets on the market.
We decided to run an experiment not only for ourselves but also for you guys, our readers. We invested a small portion ($3,000) in this high-risk high reward Cryptocurrency.
So far we have been very pleased. Bitcoin continues to grow as many believed it would. In less than a month, our investment has made close to $1,500 or ~50% profit. Not bad!
You can sign up for Coinbase here and receive a $10 free credit to invest with.
You must install a bitcoin wallet on your computer or mobile device for you to have access and start using this new form of currency.
Once you have installed the wallet, it will generate your first bitcoin address giving you the ability to start mining the bitcoins through the platform known as a Blockchain.
Individuals with bitcoin wallets compete to mine bitcoins using their computers or mobile devices to solve complex mathematical puzzles.
This is how the bitcoins are generated. At the moment, a winner is rewarded with 25 bitcoins after every ten minutes.
There is a cap on how many bitcoins can be mined. As more and more miners compete for bitcoin, the harder it will be to mine.
How do Bitcoins Work?
Simply put, a bitcoin is nothing more than a mobile app or computer software that provides a personal bitcoin wallet and enables you the user to send and receive bitcoins.
Once the wallet has generated your first bitcoin, you can send and receive the same bitcoins with other people on the Blockchain.
The bitcoin network is basically sharing a massive public ledger called the “blockchain”. This ledger contains every single transaction processed which allows a user’s computer to verify the validity of each transaction.
The authenticity of each transaction is protected by digital signatures corresponding to the sending address. This enables users to have full control over sending and receiving bitcoins.
More and more individuals and companies are adopting the use of bitcoins. It is increasingly becoming popular with thousands of new users registering for a bitcoin wallet every day.
Actually, over $1B of investment into bitcoin and blockchain companies have taken place resulting in thousands of companies and hundreds of thousands of individuals taking a piece of the bitcoin pie.
There are still many unknowns in this new cryptocurrency. With lack of regulations and no zero ties to any government, many are very skeptical if bitcoin will be around in the distant future.
I think Warren Buffet said it best, “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”.
Be cautious when it comes to investing in bitcoin. Do you homework and always know what you are getting yourself involved with.
Start with a small amount and scale it once you become more comfortable.
Don’t forget to grab your free $10 credit by signing up with Coinbase using our exclusive link.
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