So many of you will have heard of bitcoin and cryptocurrency. Over the last few years, it has come more and more into the public domain. Something that was once only reserved for the geekiest of geeks is slightly more mainstream. However, there is still a lot of confusion about what it is, how you get it and what you can do with it.
Since my site is all about making money online I have started to take a bit of interest in Bitcoin as it has made the news recently reaching crazy new highs in value. One Bitcoin in 2011 cost $3, it is now $8,000… Ok so if you invested back then you are doing pretty well right now. But what exactly is it? Is it still worth investing it? How do you get it? What can you spend it on? These are the questions I am going to be answering in this blog.
What is Bitcoin?
Bitcoin was the first of now many cryptocurrencies. Bitcoin was created to enable secure transactions between people around the world without the use of banks. They are essentially digital coins you can spend on the internet anywhere in the world.
Why was it created?
The powers that be control our world through governments and banking systems. Printing money, causing inflation, taxing us, setting interest rates etc. So what if we could spend money, without money. Without banks and without the all-powerful people at the top being able to impact on us. Well, this would be great for us but bad for them because they loose control. We no longer need them or the banks.
How is Bitcoin created?
Bitcoin is created by mining, there are only ever a limited number of Bitcoin and you need computer power and programmes to mine, solving mathematical problems. This video will explain better and faster than I ever could.
What are the benefits of Bitcoin?
There are a few main benefits to having Bitcoin and lots of reasons to invest. Having Bitcoin protects you against any impending financial crisis. If you have digital currency when the £ or $ collapses, you will still be able to buy things.
So far the value has only increased (long term, it has fluctuated in the short term), so once again, it looks like a solid investment. That doesn’t mean it will go up forever or that it is unable to decrease. Anything is possible but we can only go by what we have seen so far. And that is a rise from $3 – $8,000…
How do I get Bitcoin?
Ok so you’re interested in getting Bitcoin, you think it sounds like it is worth a shot. Now I am going to break it down for you.
The first thing you need is a Bitcoin Wallet. There are lots of websites where you can host a wallet but the easiest one I have found so far is CoinBase.
If you invest more than £75 using that link, we will both get an extra £7 worth of Bitcoin 😉
Before you can buy you will have to verify your account and this can take a couple of days.
In order to buy Bitcoin, you need to go to a Bitcoin Exchange. You can purchase Bitcoin directly through CoinBase however they are yet to verify my account so I haven’t been able to do that yet. You can also purchase it through Gdax, owned by Coinbase for cheaper.
Another option is to buy it from other people who have it. This can be riskier but there are websites set up for this exact purpose. I have found LocalBitcoins to be the most straightforward and easy to use so far. You will need ID to purchase your first Bitcoin as there is concern about fraud, so expect to take a selfie, with your ID and a piece of paper with your name on.
The person you buy the Bitcoin from will give you the full details once you confirm that you want to make a transaction. You will then be able to transfer money from your bank to theirs. Go with someone who has lots of good reviews, just like you would on ebay.
Once you purchase your Bitcoin you should then move it into your wallet to keep it safe and secure.
Bitcoin Cash Point
Yes that’s right there are actual Bitcoin cash points… check them out here SatoshiPoint
What can I do with Bitcoin?
Some people may want to buy Bitcoin to simply keep it sitting there and hope it increases in value over time. And that is great. Other people want Bitcoin for the freedom it gives them to spend their money internationally without banks.
If you a buying Bitcoin to save then I guess there isn’t much more to say. Buy some Bitcoin and leave it sitting there… See what happens. I think you’ll be pleasantly surprised in a few years.
You can spend Bitcoin in a number of ways. Many websites now accept Bitcoin payments including Amazon! Using a website called Gyft. Many websites will now have Bitcoin as an option at the checkout, just like you would choose MasterCard or Visa.
Another option is to get a Bitcoin card, this is essentially just like a normal bank card but is linked to your Bitcoin wallet so you can literally spend your Bitcoin anywhere you would normally pay by card! How cool it that! Check out Cryptopay.
So trading Bitcoin is just like trading stocks and shares. You buy them when they are low and sell them when they are high, therefore making yourself a profit. This is also known as day trading. This video explains trading in much more details so for anyone looking at trading Bitcoin I would recommend taking a look.
And that is my run down of the basics of Bitcoin. I hope this has cleared things up for some of you who have been wondering what all the fuss was about. Over all I think it’s a great investment and if you plan on just sitting on it the chances are you will make money. But as with everything there is risk involved and of course the market could crash. Anything is possible. I recommend you do your own reseach before investing any money and try and get your head around how it all works. I hope this has helped!