Cryptocurrency is a term used while referring to digital cash that is not controlled by any financial institution.
In simple terms, there are various payment systems as of today in the market apart from Fiat money (paper money controlled by the government) such as M-Pesa, PayPal, Venmo & TransferWise.
These systems enable us to transfer money digitally and are typically controlled by their respective institutions; hence specific regulations have to be met while performing a transaction.
Cryptocurrencies such as Bitcoin, on the other hand, are a peer-to-peer form of digital cash.
They enable you to transfer electronic payment to another person without involving any financial institution that would generally act as a middleman, which ends up collecting revenues from your transactions.
The currency was founded by one unknown individual/group known as Satoshi Nakamoto back in 2008 after a paper published on the internet offering a peer-to-peer form of electronic money transfer, namely Bitcoins, started to circulate.
Similar to gold, among other commodities, the price of Bitcoins has seen a tremendous increase over the years since its inception.
How Does Bitcoin Work?
Without sounding too technical, Bitcoin runs on open-source software, which is decentralized and fully distributed on a peer-to-peer network, meaning any government or authorities do not control it.
Traditional currency goes through a central payment processor, such as your credit company. Still, all bitcoin transactions are processed by a vast distributed network of sophisticated computers running a special kind of software.
Whenever a transaction is processed, the network will record the receivers, and the senders’ bitcoin addresses, including the amount transferred by entering this information onto a ledger, called a blockchain.
The blockchain is usually updated over one hundred times in a single day and later on send to every computer that processes bitcoins making each transaction encrypted with public-key cryptography.
It’s impossible to counterfeit this kind of currency since it’s verified by multiple points in the network to ensure that every single computer processing bitcoins uses identical copies of the blockchain.
It’s no secret that most of today’s money is digital. However, the bank’s ledger is not transparent to the end-user, but with bitcoins, you can have a look at the accounting and see all transactions that are taking place at any given time.
If we take a look at the very first transaction that was transacted with bitcoin (in the picture below)
We can see that a particular address sends some bitcoins to another address on the May of 2010. This is an impossible thing to do with banks acting as a middleman.
Why Should You Invest in Bitcoins?
In the early days of bitcoins inception, you could mine using your computer, but this was quickly replaced by the introduction of high-end graphics cards that became popular among bitcoin miners at the time thanks to their highly optimized crunching architectures.
These days, bitcoins can only be successfully mined by specialized appliances, which are much more powerful than graphics cards and are only meant for the mining tasks.
This specialized equipment can cost thousands of dollars and consume a whole lot of electricity, which is not a feasible thing to do as an average person.
Some people are also mistrustful of banks and other regulatory institutions and have a lot more faith in bitcoin due to its pseudo-anonymity nature, while other people look at it as a mode of investment since not only are bitcoins used today as a form of payment, but also as a way of making money online.
Because of its nature, bitcoin is entirely unregulated and, therefore, no guarantee of its value hence advisable to acquire knowledge first from the experts before investing in this volatile market.
However, the system is designed in a way that by the year 2040, there will be no new bitcoins being produced, leaving many to believe that down the line, it will become a more secure virtual commodity that will provide a hedge against inflation of traditional currencies.
How Can You Invest in Bitcoins?
Most individuals, as of today, have invested in bitcoins by buying when the currency is low and selling when the prices increase by analyzing current markets and projecting the next change in prices. In contrast, other individuals hold on to their coins in hopes of selling them at a later date by making profits.
You can either buy the coins and hold, or trade them using working strategies such as the ones I teach to make profits over time.
To get started, you need to acquire a bitcoin wallet that contains private keys used to access Bitcoin addresses and sign transactions.
There are several types of these wallets, including mobile, web, desktop, and hardware wallets that can be used to store your coins.
The process might seem technical for the non-techy, but believe me, it’s not.
All you need is:
- Trading Knowledge that can be acquired here
- A digital wallet such as Coinbase or Binance
- An internet connection
- An account at a Cryptocurrency Exchange such as Bitcoin Local & Coinbase
In terms of bitcoin wallets, the list is endless but my top recommendations include;
- Software Wallets; –Coinbase
- Hardware Wallets; –Ledger Nano X
In terms of Cryptocurrency Exchange platforms, my top recommendations are;
- Buy Using Cash; –Coinbase (US, Canada, Europe & N. America)
–Luno (S.A, Nigeria, U.K., Zambia)
–Binance (Worldwide)
–Paxful (Worldwide)
–Valr (S. Africa)
- Buy Using Credit Card; –Binance
- Buy Using Gift Cards; –Paxful
- Buy Using Local Payments; –Paxful
In conclusion, Bitcoin investment is a lucrative business or side hustle; however, you want it to be.
It’s essential to invest in yourself first by acquiring knowledge that can be used in trading safely. Enroll here for my classes.
However, it should be noted that the price of a single bitcoin as of this writing is over $9000 and therefore acquiring a single coin can be quite high for many thus, this can be split into smaller units known as Satoshi which can be bought at a fraction of the price of bitcoin depending on your budget.
Tip to Remember: Always trade what you can afford to lose & never let your emotions get the best of you.
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