What is Bitcoin?
Bitcoin is a decentralized, peer to peer, digital currency system, designed to provide network users with the ability to process transactions through a digital exchange unit known as Bitcoins. In other words, it is a virtual currency.
The Bitcoin system was created in 2009 by an undiscovered developer (s). Since then, Bitcoin has garnered a great deal of attention, as well as controversy, as an alternative to the U.S. dollar, the euro, and commodity currencies like gold and silver.
Rise to popularity
Bitcoin did not attract much attention in the world of business and finance before 2009. It stood out in the period from 2011 to 2012 when it gained over 300%. Bitcoin has had a 400% growth in value since August last year. As a result, companies and investors around the world continue to attach importance to cryptocurrencies.
In the first half of 2014, venture capital firms invested $ 57 million in Bitcoin in the first quarter, followed by another $ 73 million in the second quarter for a total of $ 130 million, 50% more than last year’s total of $ 88 million. This is in stark contrast to the 2012 scenario when bitcoin companies raised a relatively meager $ 2.2 million.
These statistics unequivocally prove that Bitcoin is worth your investment, which begs the question of how you can buy and invest in Bitcoin?
A guide for novice Bitcoin investors
The easiest and least complicated method to invest in Bitcoin is to buy bitcoin. There are many established companies, mostly in the US, but also abroad, engaged in the business of buying and selling bitcoin, abbreviated BTC.
If you live in the US, then Coinbase is the place you are looking for. Coinbase provides its customers with BTC at an estimated 1% of the current market price. Residents of the United States have the ability to synchronize Coinbase wallets with their bank accounts. As a result, future payment transfers become free. This company also gives you the option to automatically purchase bitcoin from time to time. For example, if you are interested in buying $ 50 in bitcoins at the beginning of each month, Coinbase allows you to set up an automatic purchase for that amount.
Please note the terms and conditions before using this service. If you have subscribed to an automatic essential money service, then you will not be able to control the price at which BTC is purchased each month. Note that Coinbase does not function as a bitcoin exchange, i.e. you buy and sell coins directly from the company. Because the company has to procure coins from other customers, you may face delays or interruptions when placing an order during rapid market moves.
BitStamp meets the requirements of conventional bitcoin exchange. Bitcoin acts as an intermediary that allows you to trade with other users, not with the company itself. Liquidity is higher here and you always have a good chance of finding someone who is willing to trade with you. The initial fee is 0.5% and can be reduced to 0.2% if you trade $ 150,000 over a 30-day period.
Alternative ways to buy bitcoin
Exchange is not the only method of investing in bitcoin. Local Bitcoin is often used to buy BTC offline. The website is designed to connect potential buyers and sellers. Bitcoins are locked with sellers on escrow and can only be released to buyers.
Buying bitcoin offline is not always very reliable or secure. It is therefore advisable to meet with the vendors during the day and let a friend mark you in case things go south.
Bitcoin is not just a modern trend. Venture capital firms consider Bitcoin to be a decent substitute for a conventional currency in the long run. There are uncertain ways to enter the realm of bitcoin investing. As already mentioned, Coinbase, BitStamp and Local Bitcoins are the most popular channels for investing in bitcoin in the United States. Do your homework and find out which path marks all your boxes.