A Basic Guide to Bitcoin Investment for Beginners

Bitcoin is a digital currency, popular as cryptocurrency. It is the first digitized and decentralized currency in the world.  It was launched in 2009. Bitcoin is the best digital currency for novice investors. You can say it is to be digital gold.

Bitcoin is a decentralized digital currency that you can buy, sell and exchange directly, without the help of any bank. Bitcoin’s inventor, Satoshi Nakamoto, describes it as “an electronic payment system based on cryptographic proof instead of trust.”

How Bitcoin Works

Bitcoin is built on a digital record – blockchain. Blockchain is made up of units named blocks that have information about every transaction, date and time, buyer and seller, and a specific code for each and every exchange.

Whenever a block is added to the blockchain, investors can access it to review it like a public ledger of cryptocurrency transactions. No organization controls Bitcoin, it is like an open google document. Anyone with the link can contribute to Bitcoin investment.

To add the transaction block in the Bitcoin blockchain, it must be verified by the majority of Bitcoin holders. The unique codes are available in Bitcoin to recognize the investors’ transactions. These specific codes are long and random numbers which are important to stop fraudulent activities.

Reasons Behind Bitcoin Popularity

There are several reasons why Bitcoin is so popular among its supporters. Some of them are these:

  • Bitcoin users and their supporters as the currency of the upcoming era. They are buying it prior to becoming more worthy.
  • Another reason is that state banks don’t manage the money supply, and from time to time these banks reduce the money value through inflation.
  • Bitcoin uses blockchain technology, works on decentralized processing and recording systems that’s why it is more secure in comparison with the traditional payment systems.

Is Bitcoin Investment a Good Option?

Bitcoin may go up in worth and value, but many investors see them just as speculation, not genuine investments. Investing in Bitcoin is a bit risky in comparison with stock investment.

Those investors who think that Bitcoin is the currency of the near future should note that any currency needs stability so that traders and consumers can agree on a suitable price for goods. Bitcoin traded at close to 20K dollars in 2017, and afterward, its value dropped to nearly 3.2K dollars per year. And by the year 2020, it traded at a record level.

How Can You Buy Bitcoin?

You can buy Bitcoin with United States dollars, other cryptocurrencies want you to pay via bitcoins or another cryptocurrency. To buy Bitcoin you just need an online app, which holds your currency, a wallet. In exchange, you create an account and then transfer your real money to purchase Bitcoin.

Is Bitcoin A Legitimate Currency?

No doubt Bitcoin is legal in the USA, while it is banned in China. Its legitimacy varies from country to country. Though there are many reasons behind its ban in different countries worldwide. Adding to this all Bitcoin buyers should protect themselves from online cryptocurrency frauds.

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