Wednesday, October 27
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What is Bitcoin and Cryptocurrency?

Blockchain technology was invented around 1991 but Bitcoin was created in 2009 and became the first to use the technology in practice. Information about who created Bitcoin has for a long time been secret. The creator or group of people used the pseudonym Satoshi Nakamoto. In more recent times, there have been numerous people who have said to be the people who have been part of the group that created Bitcoin.

Bitcoin is a digital currency based on a decentralized system without intermediaries such as banks. The advantages are, among other things, that transactions can be made all over the world faster, more secure, and cheaper than today’s money system.  Bitcoin has quite literally exploded in popularity in recent years, which has caused more and more people to buy Bitcoin.

In addition to blockchain technology which makes it possible to handle transactions without banks, Bitcoin has another important key aspect which is “Mining”. The term refers to the process required to keep the blockchain updated with the latest transactions and create new blocks in the chain. It is a process that requires a lot of computing power and those who do this are rewarded with new Bitcoin and parts of transaction fees in the chain.

Mining has proven to be very profitable for those who have the right equipment which has created huge Bitcoin farms around the world, often in places where electricity is cheap as the process of mining requires large computer systems which need to be cooled down.

Cryptocurrencies

What has made Bitcoin so immensely popular is not primarily whether this is the currency of the future, but the astronomical increase in value it has received. Bitcoin has increased dramatically over the years, but also proven to be somewhat volatile.

After such a success, of course, more cryptocurrencies have appeared on the market. Today, there are over 1,300 different cryptocurrencies, many of which have also increased in value significantly.

The highs and lows of cryptocurrencies in general and Bitcoin in particular, as well as the difficulty of actually trading the currencies (largely due to the large ups and downs), have led to some skeptics and banks in the world to call today’s cryptocurrency speculation, but Bitcoin has proven to be so much more than that. It can be considered the new currency.

Cryptocurrencies are not the same as money. The main reasons are that these assets do not have an official issuer and do not currently have the potential to be a well-functioning means of payment, although substantial improvements have happened in recent years.

The arguments for cryptocurrency, on the other hand, are that especially Bitcoin, has so far been a hugely good investment that has performed better than most equities and mutual funds – in all areas. In addition, many proponents believe that it is in the banks’ interest to slander cryptocurrencies as these can be seen as a threat to their existence.

Several major banks have initiated a joint collaboration on blockchain technology. So whether it will be Bitcoin, any other cryptocurrency you trade with in a few years remains to be seen. But that blockchain and digital currency are the future is given.

The technology behind BTC (blockchains)

Blockchain technology is a structure that can store different records for transactions (blocks) in several different databases or in the so-called chain.

Each transaction is verified by a digital signature, with which the owner confirms the transaction and protects it from further tampering.

In this way, the information contained in the blockchain is very secure. The content can be viewed by anyone, but you can not destroy or manipulate it afterward. Most experts believe that blockchains are likely to revolutionize several areas, not just financial services, and money transfers.

How does BTC work?

Each bitcoin is basically a separate data file that is stored in a digital wallet, either on a smartphone or on a computer.

You can also send cryptocurrency to your crypto wallet or send it to others. Each transaction is registered in a public list.

This makes it possible, among other things, to track the currency, and to be able to prevent other people from using money they do not legally own, making copies, or undoing transactions. The currency is completely independent and there is no central bank or any politician who can influence the value (although statements from influential individuals can, just like with any other stock or asset) according to the principle of supply and demand.

What determines the value of BTC?

BTC is not issued or supported by any bank or government, so a BTC has no real commodity value. The cryptocurrency has increasingly been considered legitimate, which means that it continues to rise in popularity and has also contributed to the development of hundreds of other cryptocurrencies.

The demand for a cryptocurrency is the only thing that controls the price, where higher demand causes the price to increase and vice versa.

Bitcoin trading

Investing in BTC may seem a bit complicated, but it is much easier if you divide it into several steps. Buying the currency is becoming easier all the time and the legitimacy of trading platforms and wallets is also increasing.

This means that trading with Bitcoin can be an effective way to make money, but you should also be aware of the risks it entails – just like with any investment. You buy bitcoin in two different ways:

Partly that you buy the cryptocurrency itself and hope to be able to sell it at a profit, or you speculate on the value without even owning the currency. In this case, what you own is a certificate.

When you trade with the cryptocurrency, you do not trade directly on the stock exchange. Instead, you trade with buy and sell prices that are retrieved from a number of stock exchanges.

Trading venues work in the same way as traditional stock exchanges, thus enabling investors to buy or sell the cryptocurrency to each other. 

How to buy BTC

  •  Open a trading account on a crypto platform
  •  Then deposit money into your account
  • Fill in the quantity you want to buy
  • Now you can start trading bitcoin

How to sell BTC

By registering on a cryptocurrency platform, you can buy, sell or hold cryptocurrency. After verifying your identity on the platform, you can now connect a payment method.

You can connect your bank account directly, or enter a debit or credit card. Once you have chosen a platform and connected a payment option, you can now buy and sell BTC and other cryptocurrencies.

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