Bitcoin: Some important things to know about the cryptocurrency
Bitcoin and cryptocurrencies are all the rage. We explain what this virtual currency is, how it works and how to invest in bitcoin in 2021.
Virtual currencies are an alternative to traditional fiat currencies and have their maximum exponent in Bitcoin. Furthermore, cryptocurrency has become one of the best long-term investments (risky, yes). Someone who invested $ 1,000 today in 2010 would be a millionaire. If you want to know more, we will tell you all about Bitcoin here. When you have savings to invest in, you may have concerns about where to put them, so that you may need a financial advisor.
Table of Contents
What is Bitcoin?
Bitcoin is an independent and intangible virtual currency. What differentiates this cryptocurrency from a common currency such as dollars or euros is that it does not belong to any State. In other words, what are bitcoins, and how do they work? They are basically decentralized currencies since there is no central bank, government or financial institution, or company that acts on it.
In the case of the euro, the central bank can intervene to influence the price through massive money issues or through interest rates. This is not possible with Bitcoin. In addition, the developers have already set a limit on the number of bitcoins in circulation. They will reach 21 million in 2030, and there will be none.
Control of bitcoin rests with the users themselves. They are the ones who validate any operation through exchanges (Point to Point P2P), without state intervention or any institution. In fact, the structure itself makes it impossible to manipulate its value. To make any change, it is necessary for the entire user community to approve it.
Bitcoin is the first electronic currency that managed to be implanted with some solvency, but not the first to appear. What differentiates bitcoin from other attempts is its blockchain technology.
How bitcoin works?
For the end-user, Bitcoin is another means of payment, such as the euro, and an asset in which to invest, such as a share or oil. So, is it secure to invest in bitcoin or not? Faced with this question, it is convenient to know that there is a technology behind this entire market that allows the system to be reliable. It is the blockchain technology or chain of blocks that, among other things, prevents the double spending of the currency, that is, that someone can spend the same bitcoin again.
How to buy bitcoins?
To purchase bitcoins, just go to one of the bitcoin trading platforms. For those who already invest in the stock market, its operation will be similar, although somewhat different from that of a broker to use. These platforms are called bitcoin wallets and it is where virtual currencies are stored. There are different types of bitcoin wallets based on issues such as security and usability.
How to trade bitcoins?
Once you choose your bitcoin portfolio, the operation is very similar to that of buying and selling shares. You can use some tools that can help you get profits. One of them is Bitcoin Trader. For more info regarding the tool, you can visit https://learnbonds.com/bitcoin-trader.
The difference is that, depending on the payment method, the order will take more or less to execute. But just like with a regular broker, you can enter your portfolio and see the evolution of bitcoin and its translation into euros. What does change is that you don’t have to buy 1 whole bitcoin, just choose the amount to invest. That will translate to a portion of bitcoin. In the case of these bitcoin trading platforms, the transactions are controlled by a third party, which is the platform. That is, security depends on them, and it is they who have the private keys of the bitcoins.
You already know the key points about bitcoin. Now is the time to act responsibly!
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