What is a bitcoin?
A bitcoin is a cryptocurrency. cryptocurrencies are a virtual or a digital currency that are designed to work as a medium of exchange and it uses cryptography to secure transactions. The cryptography has made it very hard to counterfeit bitcoins. Investors are going for bitcoins due to the fact that it is organic in nature; the digital currencies are not subject to government interference since they aren’t issued by any central authority.
Cryptocurrencies began in 2009 when Satoshi Nakamoto unknowingly invented Bitcoin while he was trying to develop a digital cash system. He invented it so as to prevent double spending as the digital currency will be completely decentralized and with no server or a central authority to interfere with it.
Which is the best cryptocurrency to invest in?
There are several cryptocurrencies currently available that it is quite confusing for most people to know which one to invest in. The best cryptocurrency to invest in at the moment is Bitcoin. Even though Bitcoin has been shaky for the past few weeks, it still remains the strongest as it trades around $2542.55 per Bitcoin. The current value change over the past 24 hours is at +0.51%.
Ethereum has been gaining value as it currently trades at $305.98 per ethereum. This has seen some investors shift over to this cryptocurrency with a value change of +3.80%. However, Bitcoin still remains the most valuable cryptocurrency currently on the market.
Is bitcoin transaction secure?
Yes. Bitcoins are currently the most secure means of transactions. The cryptography used by bitcoins has made them to be very secure. It is very difficult to counterfeit bitcoins or other cryptocurrencies, unlike the normal paper currencies we are used to.
Though bitcoins are very secure, they can be attacked via the exchanges and the wallets. You have to take certain measures to protect your bitcoins. Do not fall for cryptocurrency scams that can occur in any of these ways:
- Exchange scams.
- Wallet scams.
- Ponzi schemes.
- Mining investment scams
These are the following ways that you can lose your bitcoins. You should trade with only trusted sources to avoid scams.
Where can I buy bitcoins?
There are people that have decided to invest in bitcoin but they don’t know where to buy them. note that bitcoins are not bought offline. They are bought and the whole exchange happens online.
There are several cryptocurrency exchanges online but finding a trusted exchanger is a big problem. The first thing you have to do is consider how safe and trusted that exchanger is. If you have established that, then you can proceed to begin the transaction.
Here is a list of the top 5 sites to buy cryptocurrencies.
You can pay for the bitcoin via several methods like PayPal, direct bank transfer and use cards.
How can I trade cryptocurrencies?
The main reason why we buy bitcoins is either to use them for transactions or to sell them at a later date for a profit. These are the steps involved in trading bitcoins.
The first step is to buy a bitcoin. You can purchase it from a broker or through the exchange.
The next step is to find a trusted exchange. There are several trusted exchange platforms with few listed above
Follow the crypto-world news and know what is happening on a daily basis. Knowing how bitcoins is fairing in the market is very important.
You then begin to trade. The most important thing to remember is to buy low and sell high.
How does Bitcoin work?
The first thing to do as a new user is to have a bitcoin wallet installed on your PC or mobile phone, the wallet will generate a bitcoin address that you will use for your transactions and it will generate subsequent ones when the need arises. This address generated is used for receiving or making payment using Bitcoin. The bitcoin wallet transactions and others are viewed and shared using blockchain. The blockchain is the public ledger that the entire Bitcoin network relies on. If your transactions are completed, it will be visible on the block chain.
To ensure security, each bitcoin wallet has a data called a private key or a seed and they are used to sign for transactions. This process provides a mathematical proof that the bitcoin being transacted actually came from the owner of the wallet and prevents alteration of the transaction by another person once it has been initiated. The transaction is broadcasted between the users and confirmed within 10 minutes through a process known as mining.
The mining process is the last stage and it is the consensus between the systems to confirm the transactions by including them in the block chain. The mining process performs functions like bringing a chronological order in the block chain, ensuring that the neutrality of the systems remain intact and allow the participating computers to agree on the state of the system. Mining also prevents individuals from adding new blocks consecutively on the block chain.
Bitcoin market cap is…
The current market cap of bitcoin is USD 42,432,151,930.97. This figure is an increment from the value posted three days ago when the figure stood at USD 40,796,834,459.09. The value of bitcoin has been fluctuating these past few weeks but it still remains the strongest. Investing in Bitcoin at this stage will definitely pay off as analysts have projected it to even go higher.
Is Ethereum set to overtake Bitcoin?
Financial analysts have projected that Ethereum is set to overtake Bitcoin by next year. The value of bitcoin has skyrocketed to over 500% since last year and it still has the highest market share and price. However, ethereum has grown even at a faster rate with the cryptocurrency now worth more than 20 times its value in just four months.
Ethereum has also slowly entered into the bitcoin market share with over 90% of its recent turnaround from bitcoin. In that same period, ethereum has almost quadrupled its market share to a whopping 30% from mere 8%.
The advantages that ethereum has over Bitcoin is what is driving it forward. Chief amongst this is the smart contract system ran by Ethereum. They allow decentralized apps to be built on their block chain and this creates a synergistic effect that increases the value of ethereum as more projects are added to the system.
How to select a broker and exchanges?
To trade cryptocurrencies, you will need to have a trusted exchange or a broker. Exchange are websites where you can buy, sell or exchange cryptocurrencies while brokers are those that buy and sell cryptocurrencies behind the counter. Here are steps you should take to select excellent brokers or exchange.
Reputation: find reviews about the broker or exchange before embarking on a transaction.
Fees: you will have to check the commission fee that a broker charges for every transaction as fees can differ depending on the exchange you use.
Payment method: It is best if you choose an exchange that has several payment methods as that will be more convenient.
Verification processes: Exchanges that require some sort of verification are better as your funds are more secured in such cases.
Location: To get the best out of an exchange, it is best to choose an exchange that is in your country so that you can have full access to all tools and functions necessary for trading.
Exchange rate: exchanges have different exchange rates. You will have to conduct a proper research to find out which exchange rate best suits you.
Why do people trust bitcoins?
There are reasons why people trust bitcoins. Let us look at them.
Unlike paper currencies that are backed by central authorities, bitcoins are backed by a widely distributed network that shields the currency from what modern currencies are subjected to such as shortages.
They are more secure than the paper currencies. They use cryptography for their security and this has made it difficult to produce counterfeit.
Anonymity given during bitcoins transactions is a plus. Your details cannot be traced through such transactions unlike a credit card or bank transactions.
It is digital goods that cannot be duplicated as they are more or less similar to physical goods.
These are some of the reasons why people trust these cryptocurrencies.