bitcoin

How To Learn Everything About Bitcoin

What is ‘Bitcoin’?

Well, the dry facts are that it was created in 2009 by one Satoshi Nakamoto whose identity currently remain anonymous. The main attraction of Bitcoin is the opportunity to incur lower fees on transactions relative to the conventional payment methods found online.

In addition to that, it operates under a decentralized authority. That is of course in contrast to government-based currencies. In any case, it is an idea that has now accumulated a market cap that is well over $7 billion.

And we still do not know the person or persons who came up with it. Strange times indeed.

We realize of course that we have eluded the question asked at the very beginning: What is Bitcoin? Bitcoin is a digital currency. It is, therefore, also a non-physical entity of which balances are retained in a public ledger in the cloud which also records every Bitcoin transaction.

Bitcoins are independent of any involvement from banks or governmentsand they represent no value at all as a commodity. They deal almost exclusively in a whole other realm known asvirtual currencies. We refer to them categorically as Altcoins.

Getting a Grip on Bitcoin

Being a cryptocurrency, Bitcoin balances are kept with use of keys, both public and private. These refer to multiple long strings of numbers that are connected through the same mathematical encryption algorithm by which they were first created.

The public key is very much similar to a bank account number. It is the address to which anyone can send in bitcoins. The private key is the cryptocurrency equivalent of your ATM pin number. So it is a private detail that is used to authorize a bitcoin transmission on your part.

The Mechanics of Bitcoin

Bitcoin was among the first of the digital currencies to integrate peer-to-peer technology make payments virtually instant. “Miners” is the term given to the independent persons and companies that run the underlying computer systems and are also active participants in the network.

Their incentives are based on the release of new bitcoin and payments made in bitcoin. They are the so-called decentralized authority that is so characteristic of the bitcoin network and they keep network credible and valid.

Bitcoin mining explains the process by which bitcoins are released into circulation. The main objective is to solve the complex computational puzzle that would reveal a new block which will then be added to the blockchain and receive a few bitcoins in return.

In 2009, that reward was worth 50 bitcoins and it continues to decrease ever 4 years. With an ever-increasing number of bitcoins being added, the difficulty of the mining process also increases. Back in 2009, the difficulty commenced at 1.0. However, this year, it is north of some 4.24 billion. Naturally, this meant upgrading computing power from a standard desktop computer too way faster hardware such as Application-Specific Integrated Circuits (ASIC), and more advanced processing units like Graphics Processing Units (GPUs).

What Is The Value Of A Bitcoin?

The bottom line is it is a lot. A single bitcoin today is worth well over a thousand US dollars which is exponential growth over last year when it was valued $770. The price of bitcoin is not correlated to the extent of the mining network. As for theprice of bitcoin increases in tandem with the cost of producing it. The mining network has thus far tripled its power in the past year or so.

Who On Earth Was Behind The Whole Thing?

For such a multi-billion dollar idea, you would expect to know a great deal about whoever came up with it in the first place. At least a detailed profile on the internet and the occasional public address to a group of college students or entrepreneurs or even a charity event?

But no, nothing more than aname that could refer to literally anyone has been attributed to such a world-changing idea. That name is the infamous Satoshi Nakamoto. It is thought to be the individual or group of individuals who released the first bitcoin white paper back in 2008 and developed the original computer software to support the network in 2009.

Conclusion

The bottom line is that this is now a highly lucrative enterprise that shows no signs of slowing down for the foreseeable future.

How Do We Buy Bitcoins

buy bitcoinThere is no denying that bitcoin is quickly becoming a popular – and valuable – form of virtual currency. Not only is the currency hitting record highs, there is no so many more avenues available for bitcoin users.

There are a greater number of retailers accepting bitcoin and you can even trade binary options using the currency as there are brokers that accept it. All of this means that buying bitcoin can be a lucrative opportunity. All that remains is to find out just how you can do this:

First Step: Get Yourself a Bitcoin Wallet

Before you start buying bitcoin, you will need a bitcoin wallet. Unlike a wallet where you store physical money, bitcoin isn’t really stored here. Instead, it contains your public and your private keys which are what is used to ensure a secure transaction. There are four types of wallets that you can choose from.

The most common option is to download software onto your computer or mobile device. It can be downloaded onto your phone in the form of an app. There are various vendors offering different versions of a bitcoin wallet.

The other choice that you have is to use a web based service. Here, the keys for your bitcoin are stored on a separate server. Although this means that you can access your wallet from any desktop, it is not the most secure option.

There are also now hardware wallets that are essentially digital devices that are extremely secure and can be used for larger purposes. There is even a paper wallet where you can print out the files with your key data.

So, how do bitcoin wallets work? Well, they contain two 16 digit passwords – they are known as public and private keys. The public key informs the vendor where the bitcoin should be sent while the private key is what you use to confirm that a transaction has been made.

Where Can You Buy Bitcoin?

Bitcoin can be purchased from platforms known as bitcoin exchanges. These are places where you can turn physical currency such as dollars or euros into an equivalent amount of bitcoin. There is another form of exchange that is also gaining popularity. These are bitcoin ATMs where you deposit money into them and the bitcoin are sent to your bitcoin address. There are also individual vendors that are involved in selling or trading bitcoin with you.

Then there are binary options brokers that allow you to use bitcoin as a medium of exchange. This is when you place a trade on a particular asset and in the event that it ends up in the money, you get paid in bitcoin.

How Can You Purchase Bitcoin?

When you are dealing with exchanges, there are several ways that you can buy bitcoin. If you want to purchase bitcoin as fast as possible, credit cards and debit cards are good ways to manage this. This is because you will have access to bitcoins the moment the transfer has been verified. Of course, when using credit cards, you can expect to pay higher processing fees than with other payment options.

Equally as popular are bank transfers. They are particularly useful if you want to purchase a larger volume of bitcoin. With bank transfers, however, the transaction can be quite long. You typically have to wait several days before you can use your bitcoin. With credit cards, debit cards, and bank transfers, you have to use some sort of identification to make the exchange.

Cash exchanges can be utilized by individuals who want to make a quick exchange and don’t want their identity attached to the purchase. Unfortunately, this method can be notorious as you are dealing with individual vendors. Also, the exchange rates tend to be much higher than with other choices.

Officially, payment options such as PayPal will not let you purchase bitcoin with their platforms. Although some people have found creative solutions to this, it still is forbidden by these payment platforms.

Once you have bought bitcoin, you can use exchange systems to both sell and buy bitcoin. There are many exchange systems that offer wallets and vice versa. This allows you to be officially engaged in the bitcoin marketplace.

This is the process involved in purchasing or trading bitcoin with either exchanges or individual vendors.

Is Bitcoin A Scam?

bitcoinBitcoin scams have been around almost as long as the cryptocurrency itself. There has been, however, an increase in the different types of scams that conducted. This can make it quite difficult to determine what bitcoin opportunities are legitimate and which ones are fraudulent. This article will deal with some of the more prevalent cons:

Sham Bitcoin Exchanges

Bitcoin exchanges are utilized as a way of purchasing bitcoin. Users exchange traditional currency for cryptocurrency. Most fraudulent exchanges will begin the process as any exchange would.

They request the individuals to pay a certain amount of money to receive bitcoin in return. However, once the money is transferred there is no bitcoin sent to their wallets.

In most instances, you will be unable to contact these exchanges once the transaction has been made. One of the ways that these exchanges lure customers in is by claiming to have lower credit card processing rates than other exchanges.

See here how you can make money with bitcoin.

Fake Bitcoin Wallets

This is actually a scam that is relatively easy to create. This is because there are so many wallets available on the market, it can be difficult to determine which ones are real and which ones are fake. Some scammers go the extra mile and create wallets that are very similar to popular or well-known ones. Once the bitcoin is entered into the wallet, it is stolen.

Bitcoin Investment Fraud

The problem with bitcoin investment schemes is that you don’t know that you have been swindled until it is too late. These types of scams are very similar to that of a Ponzi scheme. Initially, you invest funds in an investment service.

In the beginning, you will begin to see small return on investment. What’s happening here, however, is that these aren’t profits at all. Instead, the scammers are taking money from the newer investors and giving it to the older investors. Eventually these payments will stop. You will also be unable to withdraw your funds as they have already been transferred elsewhere.

On a similar note, there are also multi-level marketing scams. These promise to reward current customers if they successfully manage to refer their scheme. These types of scams also have an initial payout but this too is from the money brought in by new investors.

False Cloud Mining Services

Some people prefer to mine bitcoin instead of buying it outright. The mining equipment, however, is quite expensive which is why many people join pools. Here, they combine their resources to purchase this equipment so that they can begin mining. Typically, once you have “bought” the equipment, you don’t see any results. Sometimes, the perpetrators may offer low profits before then disappearing with the funds.

Phishing Scams

These can take different shapes and forms. The main goal with these is to get you to go to a fraudulent website. You can be led there by emails claiming you have won something or offering you a business opportunity. In many instances, the websites may sound or appear to be ones that you are familiar with. Once there, they may trick you into handing over your information about your bitcoin wallet and then draining it.

How to Avoid Bitcoin Scams

As you may noticed, some of these scams are quite subtle and often lead you on for quite a while. Therefore, it can be difficult to determine which opportunity is a scam and which one is not.

The best thing that you can do is to always stick with exchanges and institutions that you can verify and that have been established. For instance, if you want to buy or exchange bitcoin, make sure to only do business with agencies that are well-known. Or, use reputable binary options brokers to trade bitcoin so that you can be certain about receiving what you have traded for.

You should also never believe claims that seem too good to be true. For example, suspiciously low exchange rates, free services, and similar tactics are all considered to be red flags. You should refrain from doing business over social media platforms or any sites that may seem unsecure.

Since cryptocurrency is largely not monitored by the company, it is important to avoid these bitcoin scams. If you do lose money or bitcoin due to these schemes, it is quite likely that you will not receive any compensation.

How to Make Money with Bitcoin

make money with bitcoinOne of the main reasons to get involved in bitcoin is so that you can make money from the cryptocurrency. Although bitcoin is gaining in popularity, there are still only a few ways to make a real profit.

Here are some of the avenues that you have at your disposal with bitcoin:

1) Mining for Bitcoin

Bitcoin mining is the original way of earning bitcoin. The bitcoin mining process is where recent transactions are compiled into blocks. It also involves essentially solving a very complicated computational puzzle.

Through this method, the first person to solve the puzzle receives bitcoin in return. Bitcoin mining is a surefire way to earn bitcoin. At the same time, it is an expensive and complex process that requires highly specialized equipment.

By joining a mining pool, you can reduce some of the cost involved although the bitcoin that you receive is also shared. Mining is also losing favor as the process is becoming more popular at an organizational level rather than for independent miners.

2) Buying and Holding Bitcoin

Then you can treat bitcoin much as you would forex trading. Here, you buy bitcoin when it is at a lower value. You then wait for the price to increase and sell it to make a profit. This is actually a viable option for a couple of reasons. First, recent spikes in the value of bitcoin have made it quite valuable. Then there is the other fact that there is a limited number of bitcoin available to be mined. The total amount of bitcoin that can ever be in existence is 21 million.

It is estimated that by next year, 80 percent of this supply will not only have been mined but also be in circulation. Now, it can be difficult to predict what will happen since bitcoin doesn’t necessarily behave or perform the same way as regular currency. Nonetheless, there is a good chance that there will be an increase in demand as fewer number of bitcoin are made available. This will automatically drive the price up.

3) Binary Options Trading with Bitcoin

The other form of trading that you engage in with bitcoin is binary options trading. The brokers that do deal with bitcoin typically give you one of two options. You can deposit bitcoin into your account and use it to place trades on any asset with. If the trade that you have invested in ends up in the money, your original investment, inflated by the payout rate will be paid back to you in bitcoin.

The other choice that you have is to use bitcoin as a trading asset. This means that you will have to depend whether the price of bitcoin is going to increase or decrease within a certain period of time. If you are right about the price movement, you win that trade and receive a greater number of bitcoin.

4) Set up a Bitcoin Faucet

Most people that get started with bitcoin have visited at least one bitcoin faucet. These are websites that give people minute portions of bitcoin for playing a game or completing some small task. A great way to make money would be to start your own faucet.

Yes, you will be required to part with small amounts of bitcoin. However, advertisers use these types of faucets to place their ads or run videos. They will pay you for the privilege. This means that you will have to give up a lot less than you have to give in.

5) Get Bitcoin as an Income

If you want to earn bitcoin as a regular income, this could be managed as well. You just need to find a job that will pay you in bitcoin. It can be quite difficult to find a full-time job in a traditional industry that will give you your salary in cryptocurrency. In fact, there are only a handful of companies around the world that even offer this as an option.

However, there are many bitcoin-related sites and forums that do post part-time or freelance jobs that pay in bitcoin. Therefore, engaging in these activities means that you will have a steady flow of bitcoin.

These are some of the ways that you can make money with bitcoin. They each come with their own advantages and disadvantages so you will need to decide which one is right for your requirements and skill level.