Key Takeaways

Can Bitcoin Become Real Money
Is Bitcoin Real Money

What is Bitcoin? | What do you need to invest in Bitcoin? |
How to invest in Bitcoin in 5 steps | Is Bitcoin a good investment? | Different ways to invest in Bitcoin

Over the last several years Bitcoin has become increasingly popular amongst today’s investors. During that same time, there’s been a lot of debate about Bitcoin and other cryptocurrencies—Its proponents argue that it’s the future of currency and investing, while its detractors argue that it’s a risky investment option that may not generate big returns.

To better understand its true value in the marketplace, we must look to its latest movements. Most recently, Bitcoin’s valuation has increased more than 763% in just one year, easily outpacing traditional gains in the stock market. More people are buying into Bitcoin becoming a decentralized, global currency. One tailwind, in particular, is the acceptance of Bitcoin by several high-profile individuals and businesses.

Elon Musk, the mind behind both Tesla and SpaceX, recently announced his automotive empire would not only purchase $1.5 billion in Bitcoin, but it also intends to accept the cryptocurrency as payment in the future. Several popular FinTech (financial technology) companies like Square and PayPal also announced their intentions to start supporting cryptocurrencies moving forward. Despite all of that, however, the most important development for Bitcoin may be the recent IPO (initial public offering) of Coinbase Global, Inc. (NASDAQ: COIN), today’s leading cryptocurrency exchange platform.

There’s no doubt about it: momentum in Bitcoin is certainly building. Recent developments have contributed to Bitcoin’s meteoric rise in value, and proponents of the asset are convinced this is just the beginning.

Unlike banked money, Bitcoin cannot be frozen or stolen by the government. 2) Bitcoin is a way to send value around the world, from one Bitcoin Wallet to another. A great way to explain Bitcoin to a family member (especially someone older) is to say, Bitcoin is like a money order that you can send anywhere in the world. Get your first bitcoin in minutes! Download the Bitcoin.com Wallet app. Setup your payment method (credit/debit, Apple Pay, etc.). Follow the instructions to buy. Payment methods range from credit card to bank transfer, payment app (PayPal, Apple Pay, Google Pay, Samsung Pay, etc.), face-to.

So, what exactly is Bitcoin, and how can you determine whether it’s the right investment for you? Read our beginner’s guide on how to invest in Bitcoin.

What is Bitcoin?

Bitcoin was created by a programmer or group of programmers using the name “Satoshi Nakamoto.” But the real creator(s) of Bitcoin is still unknown to the public.

Bitcoin is one of the most widely used types of cryptocurrency. In a cryptocurrency system, virtual “coins” or “tokens” are used instead of physical cash. Coins have no intrinsic value, and they aren’t backed up by gold or silver.

Bitcoin was created to solve a couple of big cryptocurrency flaws. First, it was designed to prevent crypto coins from being fraudulently duplicated. Think about how easy it is to make copies of your computer’s data—documents, photos, files, etc. Cryptocurrency wouldn’t be possible if anybody could duplicate a coin and create an unlimited amount of currency for oneself. You can’t just make copies of a $20 bill, right? Likewise, there’s a need to prevent people from reproducing crypto coins.

Understanding Blockchain Technology

Bitcoin uses a digital technology called “blockchain,” an advanced coding mechanism that disperses a single code over thousands of different computers. For example, let’s say that your coin is built from the code, “XDA146DDS.” Blockchain segments the code into smaller pieces and stores the pieces of code across many computers. If a hacker wanted to access the code, they’d have to hack various computers to access the entire code.

Blockchain also employs a “public ledger,” which uses thousands of computers (referred to as “nodes”) to keep track of coins and their owners. If a coin’s data is changed, the nodes will cross-reference each other’s records to verify whether the change is accurate and that the coin’s owner initiated it.

What is Bitcoin used for?

Once you purchase coins, you can use them in online transactions wherever they’re accepted. Remember, when you make a transaction with a coin, there’s no actual money being pulled from your bank account. Money only leaves your bank account when you purchase the coin itself—not when you make purchases with a coin.

Like cash currency, the value of a coin may fluctuate. That’s why some investors are getting excited about Bitcoin and other types of cryptocurrency. Investors speculate that Bitcoin’s value may rise significantly if there’s a surge in the market. I’ll explain the arguments for and against cryptocurrency investment later on.

For now, investors should pay special considerations to the rate by which Bitcoin and other relevant cryptocurrencies are being adopted. Not unlike traditional equities, Bitcoin increases in value when more people are interested, and more people are interested in buying Bitcoin today than ever before. Whether it is pure conviction or an inherent fear of missing out on what many predict to be the greatest transfer of wealth in American history, trading volume continues to increase exponentially. For the better part of a year, in fact, Bitcoin trading volume has steadily increased. As a result, Bitcoin is regularly testing new highs.

What Do You Need to Invest in Bitcoin?

You don’t need very much to invest in Bitcoin! You only need the following:

Personal identification documents
Bank account information
A secure internet connection

Keep in mind—if you’re going to be purchasing coins through a stockbroker, you may not need to supply your personal information or financial information because your stockbroker will likely have all that on record.

How to Invest in Bitcoin in 5 Steps

Are you ready to take a dive into cryptocurrency? You’re in luck as buying Bitcoin is simpler than you might think. Here’s how to invest in Bitcoin, in 5 easy steps:

Join a Bitcoin Exchange
Get a Bitcoin Wallet
Connect Your Wallet to a Bank Account
Place Your Bitcoin Order
Manage Your Bitcoin Investments

1. Join a Bitcoin Exchange

First, you’ll need to determine where you want to make a Bitcoin purchase. Most Bitcoin investors use cryptocurrency exchanges. There’s no official “Bitcoin” company because it’s an open-source technology, but there are several different exchanges that facilitate Bitcoin transactions. These exchanges are the middlemen of cryptocurrency investing, like a stock brokerage.

If you decide to purchase from an exchange, you’ll have to decide which exchange you want to buy from. Here are a few of the most popular options:

Coinbase: A very popular crypto exchange that insures losses in the event of a security breach or fraudulent transfers
Binance: Founded in 2017, Binance is a crypto exchange with a strong focus on altcoins
Kraken: This San Francisco-based exchange allows you to invest in Bitcoin using various currencies from around the world
Gemini: Launched in 2015 by Cameron and Tyler Winklevoss, Gemini offers services for casual and veteran Bitcoin investors with different user interfaces and fee structures for both
Bitfinex: The longest-running cryptocurrency exchange that’s optimized for advanced traders and lenders (unfortunately, Bitfinex doesn’t currently accept US customers)

As you might have guessed, choosing a Bitcoin exchange is becoming more difficult for investors as more options begin to popularize. Find everything you need to know about Binance vs. Coinbase and start investing, today.

2. Get a Bitcoin Wallet

When you purchase a coin, it’s stored in a “wallet,” which is where all your cryptocurrency is stored. There are two types of wallets you can get: a “hot wallet” or a “cold wallet.”

A hot wallet is a wallet that’s operated by either your cryptocurrency exchange or by a provider. Some exchanges will automatically provide you with a hot wallet when you open your account. In any case, hot wall