If you’re thinking of starting to invest in Bitcoin, it’s important that you do your research first. There can be a lot to learn when you first start out, and a lot of concepts to grasp. To help you, we’ve put together the following beginner’s guide. We will cover the basics of bitcoin, and how to invest in it. Keep reading to learn more.
What Is Bitcoin?
Bitcoin is a popular form of digital currency first invented in 2008 that has grown hugely in popularity in recent times. It doesn’t have a central bank and is exchanged directly from investor to investor. Real money can be exchanged for Bitcoins, which you can then trade. The price of Bitcoin fluctuates and can be volatile, so do your research before choosing to invest.
What Are Blockchains?
As there are no central banks used for trading Bitcoin, there needs to be a way of recording transaction data. This is where blockchains come in. They are a way to record each transaction made in a “block”. Each time a transaction is made another block of data gets added to the chain. The blockchain is publicly accessible and makes it almost impossible for people to falsify transactions.
Bitcoin Wallets
Bitcoins get stored in online software “wallets”. These have private codes known only to the person who owns the wallet, to keep their Bitcoins secure. You can access your Bitcoin wallet from anywhere as long as you have your code. Your wallet will also have a public address so you can receive Bitcoins from other people. However, this doesn’t mean they will be able to access your wallet and take out Bitcoins.
Mining Bitcoin
Bitcoin mining is when new transaction information (blocks) are added to the public blockchain. Bitcoin mining is incredibly competitive, with people competing globally for the opportunity to add to a blockchain. When they do so they earn rewards which can be more bitcoins or earning transaction fees.
Exchanging Cryptocurrencies
There are other forms of cryptocurrencies such as Ethereum (ETH) available as well as Bitcoin (BTC), and they can be exchanged for each other. This could be due to the values of each fluctuating on the market. You can exchange ETH to BTC by signing up with Paxful.
Is Cryptocurrency Safe?
Many people have concerns about investing in Bitcoin and other cryptocurrencies as they may feel the money they have invested may not be entirely secure. There are many scams that take place to attempt to trick people into investing in fake Cryptocurrencies. So, it’s important to make sure your research a Cryptocurrency before you invest in it. One of the reasons Bitcoin is so popular, is because the blockchain technology makes it a very secure Cryptocurrency to invest in.
What Is The Price Of Bitcoin?
The price of Bitcoin fluctuates a lot from year to year. Therefore, the market can be volatile and like with any form of investment, there is a level of risk involved. Weigh up the personal pros and cons for yourself before you choose to invest in Cryptocurrencies.
