How to Start Investing in Bitcoin
The way Bitcoin works depend on your goals - if you're looking for a shortcut, try the easiest way to buy bitcoins through a Bitcoin market.
22:27 11 May 2022
Bitcoin is a digital currency created in 2009. Bitcoin and the many other digital currencies are primarily online currencies. Bitcoin is like conventional money, but it exists purely electronically. Bitcoin can be used to buy things electronically when you have a Bitcoin wallet (see below).
Bitcoin and the hundreds of other digital currencies exist only online, are not backed by any government, and are decentralized -- Bitcoin activities are not monitored or managed by any one company or organization. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Bitcoin has been referred to as "cash for the Internet."Benefits of trading with a Bitcoin Decoder.
How Bitcoin Works
To understand Bitcoin, you first have to understand digital currency. Digital currency is an online currency that enables instant payments to anyone in the world. It's called "digital" currency because it exists only in electronic form -- it cannot be touched or held.
When you send someone digital currency, you don't connect directly with him or her through some central authority (such as) -- instead, your payment jumps from wallet to wallet until it reaches your recipient. That's why Bitcoin and other digital currencies are called "cryptocurrencies" -- the word comes from cryptography, which is the security technology that makes Bitcoin possible.
Security is an important aspect of Bitcoin. When you send Bitcoin, know that it's similar to sending cash digitally. Bitcoin transactions are irreversible and secure; however, like physical cash, Bitcoins can be stolen if you don't have a plan for keeping track of them.
Originally created in 2009 and traded among a relatively small number of users, Bitcoin was intended to offer a peer-to-peer payment system that completely bypasses banks and the mainstream financial system. Bitcoin has since evolved into a software-based payment system that's traded on online exchanges for conventional currencies like dollars or euros, and its value fluctuates based on user demand. Bitcoin is intended to serve as an alternative currency, rather than a replacement for traditional currencies. The Bitcoin protocol was designed to generate only 21 million Bitcoins entirely through "mining" -- the Bitcoin network's process for generating new units of Bitcoin currency -- but it will ultimately produce far fewer coins than originally planned due to transaction processing delays.
Your Bitcoin Wallet
If you're going to invest in Bitcoin, you need a digital wallet to hold your Bitcoin currency. A digital wallet can reside on your computer, mobile device, or tablet pc, or in the cloud. Bitcoin wallets enable Bitcoin users to generate Bitcoin addresses, which are like accounts in a conventional bank. Bitcoin is completely different from traditional banking; Bitcoin transactions are in some ways similar to cash transactions. Bitcoin transactions don't require middlemen or financial institutions -- you can do business directly with another party and pay with Bitcoin, even if that party doesn't want Bitcoin itself. If you still aren't sure what a Bitcoin wallet is, watch this video: How Bitcoin Works (Official Video).
Getting Started with Bitcoin
The way Bitcoin works depends on your goals - if you're looking for a shortcut, try the easiest way to buy bitcoins, which is probably through an exchange or Bitcoin market. The option is mining it yourself, but Bitcoin mining is only recommended for Bitcoin experts. Bitcoin itself is not a stock, Bitcoin market or exchange, but Bitcoin currency does trade in Bitcoin markets. Bitcoin currency can be used to buy things electronically when it's stored in a Bitcoin wallet -- you can buy products online with Bitcoin just as you would with regular money. Here are some other ways to get Bitcoin:
- Buy Bitcoin Directly
- Accept Bitcoins As Payment
- Earn Free Bitcoins
- Earn With Bitcoin Faucets
- Multiply Your Coins
- Exchange Bitcoins For Dollars And Euros
Banks and the financial system generally aren't yet comfortable dealing directly with Bitcoin businesses or users because it's so different from anything they've dealt with before; however, that could change over time. Bitcoin businesses are developing new Bitcoin software, services, and products for the financial system, which could ultimately become mainstream. The Bitcoin business community understands that Bitcoin will spur financial innovation, which is why many influential members of this community are joining forces to promote Bitcoin.