What is Bitcoin? Whether you are interested in investing and finances or not, chances are that you’ve at least heard about Bitcoin cryptocurrency. But what exactly is it and how does it work? How do you know if you should invest, or how do you even invest?
It is coming increasingly popular, as many consumers are using crypto due to high convenience and ultimate security. The media is in a frenzy over the boom in value, thus making it even more attractive. Bitcoin is here and it isn’t going anywhere.
If not for my husband, I would not have cared too much about Bitcoin and investing. He is extremely into crypto and follows all of the crypto news. I have learned that investing is very beneficial, and Bitcoin is a great way to do that. I feel that it’s important for everyone, especially women, to learn more about investing. If done correctly, it’s a great way to secure your financial future.
I am not a licensed financial advisor, this article is created from personal experience and extensive research.
What is Bitcoin?
By definition, bitcoin is a unit of digital currency where a record of transactions is maintained and new units of currency are generated by a computational solution of mathematical problems, and it operates independently of a central bank. In simpler terms, a Bitcoin is basically a computer file that is stored in a digital wallet app on a smartphone or computer. No one entity controls it, and transactions can’t be altered. The United States of America Dollar is by definition backed by the full faith and credit of the United States of America, Bitcoin is backed by mathematical Algorithms that are backed by faith in the math, security, and proven record of Bitcoin.
Bitcoin cryptocurrency was released in 2009. There are no physical coins, everything is completely digital and balances are kept on a public ledger that everyone can access, which is the blockchain. Bitcoin exchanges (marketplaces) allow you to buy or sell coins using different currencies. You can easily trade your coin for another type of crypto or sell it and have your account value transferred to your bank account- hello money! (But do not forget about Uncle Sam, but more on that at a later time.)
What is the difference between Bitcoin and Bitcoin Cash?
For a full-length in-depth article that explains the differences between Bitcoin and Bitcoin cash, I have found this amazing article. It explains things in great detail and it is written by a long-time bitcoinist. I personally don’t have any experience with Bitcoin Cash yet, only with Bitcoin. So, this article will answer more of your in-depth questions and explain the differences properly.
How to Buy and Invest
Investing for Beginners
The first step to buying and investing in Bitcoin is to sign up for an exchange that will allow you to buy, sell, and hold a cryptocurrency. There are a few options to choose from when it comes to cryptocurrency exchanges. I personally use Coinbase. You can sign up online or through the app, and it’s a very quick and easy process.
An ID will be necessary, such as a driver’s license, to verify your identity with the site and a bank account that you can connect to your exchange in order to purchase crypto. You can check the daily value of the coin within your exchange account. It is always ready on display and easy to read.
Worried that you can’t afford to invest? You can purchase any amount of Bitcoin, even as little as a dollar.
Is it Safe?
As long as you keep your private key private and don’t fall for scams, your Bitcoin will be safe. However, as with any type of investing, you may lose some of the money you invest at times. It all depends on how the market goes, and the market changes very frequently.
Be sure to stay away from free Bitcoin offers, emails, and posts on social media. Those are scams- Bitcoin is never just given away for free. Unless of course, it’s from someone that you know and trust. This is the same with anything online, if you aren’t 100% sure that you can trust the source, don’t interact with it.
This is a pretty in-depth process, creating a new Bitcoin by solving a computational puzzle. I do not personally mine Bitcoin and I am not very familiar with it yet, here is a fantastic article if you’re interested in mining crypto.
There are thousands of cryptocurrencies. Some of the top cryptocurrencies, besides Bitcoin, are Ethereum, Litecoin, Cardano, Stellar Lumens, Dogecoin, and Bitcoin Cash. Once you have an account on an exchange, you can invest in many different cryptocurrencies. You can also see the current and forecasted trends of crypto to help you make a more educated investment.
Is Bitcoin A Good Investment?
Benefits of investing:
- Elimination of banking fees
- Low-cost transactions
- Low inflation risk
- No one can block or censor your transactions
- Fast and easy to use
- Provides anonymity
Investing in Bitcoin or any cryptocurrency for that matter can pose certain risks. However, there’s no more risk involved than in traditional investing, actually, it’s safer and more secure. If you are smart about investing, it can become very beneficial to you in the future. Many businesses are starting to accept Bitcoin as a form of payment. And if you decide that you want your money out and don’t want to risk anything, it’s simple to sell your coin and have the value transferred into your bank account. As of the writing of this article, Bitcoin is hovering just over $53,000.00, In 2020 you could have bought a whole Bitcoin for under $4,000.00, there are some projections putting 1 Bitcoin around $1,000,000.00 in the next few decades.
There are many educational sites and resources if you want to learn more. Also, Coindesk has an amazing in-depth overview of crypto, including very useful and informational videos. Are you currently an investor in crypto? Drop a comment and let me know how long you’ve been at it and how it’s going.