Perhaps you might have heard of Bitcoin, which has been one of the hottest words on the Internet over the past few years. But have you wonder what is exactly Bitcoin, how to purchase it, and where those advanced technologies come from? Those are a couple of common questions that any smart investors should answer before deciding to invest their money on Bitcoin in 2018.
1. What is exactly Bitcoin?
In simple words, Bitcoin is a digital currency which is applied to implement online transactions. Since it is a crypto, you could not hold Bitcoin with a bare hand just the way you do with pounds, dollars, or any other physical currencies. What make Bitcoin so different lies in its decentralization, meaning that nobody is able to control it. Instead, any computer users all over the world can mine, buy, trade, and store Bitcoin with the help of different applications, wallets, exchanges or free bitcoin generator online.
2. How to get Bitcoin
There are a variety of ways to get Bitcoin just with the Internet connection. These include: –
a) Mining
This is basically the process of solving several computational problems and receiving rewards with Bitcoins. All that you need is a good mining hardware that can be purchased from any computer store.
b) Bitcoin exchange
The easiest way to get Bitcoin is to purchase it from a cryptocurrency exchange. You can simply search for some trusted names and place your order with just the click of a mouse. Make sure to choose a local exchange since it can save you some money and effort.
c) Payment for services or goods
If you own an online store, you might choose to accept Bitcoin as a payment method for services and goods. Then, your customers can pay by Bitcoin via some applications.
3. Which factors determine the price of Bitcoin?
All of us agree that Bitcoin is a profitable yet volatile crypto currency. Its price is mainly determined by the trading market, or the supply and demand. In other words, the ongoing interactions between sellers and buyers will decide the specific value of Bitcoin. However, due to the decentralization, the price of this currency tend to vary significantly just in a few days. For example, one Bitcoin was traded for approximately $7700 at 9th February 2018, which represented a striking drop from its peak at nearly $20,000 at the end of December 2017.
4. Should you invest in Bitcoin?
Just like any other form of investment in stocks or real estates, the final decision depends on personal preference. For example, if you are a risk taker who believe in disruptive technologies that may change the world in a foreseeable future, Bitcoin is a great choice to invest your money. In spite of its volatile price, Bitcoin and blockchain technology would make a significant contribution to many fields in the industrical revolution 4.0. Otherwise, if you are a risk-averse, safer options such as mutual funds and bonds are better.
5. The future of Bitcoin
For the time being, it is still soon to declare that Bitcoin will be the future of technology. Although the underlying technology is disruptive and can be applied in many industries, many countries have not yet accepted this currency. In the first few months of 2018, Bitcoin price has witnessed a sharp decline due to the restriction and ban from some countries, including China, India, and South Korea.
Therefore, it is advisable to consider carefully your personal circumstances, along with possible risks, before deciding to invest your money on Bitcoin.
