What is bitcoin?
You would have needed to be living under a rock to not know that the world of currency is in a state of evolution. Back in the day, currency was something that was strictly paper and coin based, but times have well and truly changed. The turn of the century saw the digital revolution kick into a higher gear, with experimentation coming in the realm of alternative currencies. Through this term cryptocurrency was first coined. For years, this payment format would remain firmly under the radar, that was until 2009, when a certain version of hit the headlines around the globe. Bitcoin is far and away the leading cryptocurrency in the world today, but it isn’t actually a payment platform that’s too difficult to understand, in spite of what you have read elsewhere. Adhering to its official description, bitcoin is a “peer-to-peer electronic cash operating system”. Furthering that, it is form of currency that operates outside of traditional lines, as it isn’t dependent on a central monetary authority (CMA).
What is really giving bitcoin a noticeable “edge” is the fact it is a currency that is purpose built for the digital realm, owing to the fact that it is more or less untraceable. From a history perspective, it is hard to pinpoint exactly where bitcoin first became more than just an idea, but what is known is that bitcoin as a concept was floated around on the cypherpunk mailing list originally. Following this a mysterious “programmer” Satoshi Nakamoto outlined bitcoin through a research paper in 2008, before the cryptocurrency was first launched sometime in 2009.
How to buy bitcoins
The above has given you a brief introduction to the concept of bitcoin, so it is time to look into how exactly you can acquire bitcoin and make it your own. The fact that this is non-physical currency means that all transactions are made digitally. Anyone who has interest in using bitcoin (whether it is for bitcoin sports betting, bitcoin poker, or general bitcoin gambling purposes) needs to buy bitcoin through a dedicated bitcoin exchange. This is where things become a touch more complicated, as you are going to need to get a grasp on the numbers; as such a transaction resembles something similar to that of forex. The bitcoin exchange that tops the pile is Kraken, which has emerged since the untimely fall of Mt.Gox.
With a Kraken account in your possession you can begin to acquire bitcoins. What makes Kraken the number one bitcoin exchange is that it really does look to adopt a forex trading outlook, with popular features such as stop-loss measures and base level currency purchasing inclusive. If you are wondering how exactly you can buy bitcoin, make Kraken your first port of call, as it is going to give you unrestricted access to the fast paced world of cryptocurrency.
Above briefly touched on bitcoin exchanges and the one in particular that should be on your radar. But to use them effectively you are going to need a little more than just a surface knowledge. Thankfully, we have a quick breakdown for you. An exchange operates as a currency medium, so those who own bitcoin or want to acquire bitcoin will need to set limits for both buying and selling values. With both these values in mind, the exchange will look to match up both buyers and sellers, if a matching figure is applicable. Adding to that, buyers and sellers are able to control how transactions are carried out through the two transactions types available, in the form of market orders and limit orders. It may seem a touch complicated, but buying bitcoin through a bitcoin exchange isn’t as difficult as it seems. Do your research, understand the product, use the exchange tools effectively, and you’ll find snapping up bitcoin a fairly stress free task.
Price of bitcoin
The challenge when it comes to bitcoin isn’t necessarily paying for it, but determining its value, as it does represent a form of investment at the end of the day. Trying to read between the lines certainly isn’t easy, but there are a number of determining factors that every buyer needs to think. First, when it comes to bitcoin the acts of supply and demand are an ever present, as the price of bitcoin will act like a regulated currency in that regard. Reason being that bitcoin is a finite product that is mined via blocks, so as the product becomes more and more limited, it is fair to expect the price to rise.
Real world events can also control the price of bitcoin, much like such will affect the price of paper currency and gold. For example, should real world crises hammer more traditional currencies, then bitcoin tends to mirror gold and spikes as people seek sanctuary in a non-traditional currency investment. A fine case of this was during the Greek financial crisis, as the value of bitcoin was really boosted during such time.
Finally, old-fashioned confidence and faith can have an effect on how bitcoin is priced within the market. If investors are holding onto bitcoin and keeping it close as a viable form of investment, it certainly will show in its value. It may sound old fashioned, but if people believe in bitcoin the price of it tends to respond positively.
By this point you are probably wondering about how bitcoin enters the market in the first place, well it comes about via mining. Mining is actually a rather complicated process, as bitcoin is unearthed digitally through a complex algorithm, before it can then be sold and bought. How the mining process works is that it adds transactions to a block chain, which is then deciphered through an algorithm, with bitcoins being released to the miner or mining group as a result. What the algorithm often takes the form of is a complex puzzle, which requires hours, weeks, days, and possibly months of decoding activity. Bitcoins are also issued at source on a first come first serve basis, so the first to crack the code claims the bitcoin in question.
Bitcoin security really is a hot button topic in 2016, as while it is committed to protecting customers, it also stands by its approach to privacy and anonymity. Looking at the major security element, bitcoins are practically untraceable, but are “tagged”, which means that should bitcoins be stolen, they cannot be reused. A perfect instance of this occurred several years ago when 25,000 bitcoins were stolen, yet since not a single bitcoin has been able to re-enter the market through official means.
The importance of bitcoin
For thousands of years current was dictated by paper and coins, but in the 21st century a shift is occurring. This shift is pushing matters toward digital means, with bitcoin standing at the forefront of this revolution. As it begins to build momentum, the true important of bitcoin in today’s currency landscape is finally coming to light.