What is Bitcoin?
Bitcoin is a decentralized, peer-to-peer digital currency system designed to enable online users to process transactions through a digital exchange unit known as Bitcoins. In other words, it is a virtual currency.
The Bitcoin system was created in 2009 by an unknown programmer. Since then, Bitcoin has gained a lot of attention, as well as controversy, as an alternative to the U.S. dollar, euro, and commodity currencies such as gold and silver.
Rise to fame
Bitcoin didn’t get much attention in the business and financial world until 2009. It took center stage in the period 2011-2012, when it gained more than 300%. Bitcoin has grown in value by 400% since August last year. As a result, venture capital firms and investors around the world continue to value cryptocurrency.
In the first half of 2014, venture capital firms invested $ 57 million in Bitcoin in the first quarter, and in the second quarter they invested another $ 73 million, a total of $ 130 million, which is 50% more than last year’s $ 88 million. This is in stark contrast to the 2012 scenario, where Bitcoin companies raised a relatively meager $ 2.2 billion.
These statistics certainly prove that Bitcoin is worth your investment, which begs the question: how can you buy and invest in Bitcoin?
A guide for novice Bitcoin investors
The easiest and most complicated way to invest in Bitcoin is to buy bitcoins. There are many established companies, especially in the US and abroad, that are involved in the business of buying and selling bitcoins, abbreviated as BTC.
If you live in the US, Coinbase is the place for you. Coinbase offers its customers BTC at a 1% mark compared to the existing market price. U.S. residents can sync their Coinbase wallets with their bank accounts. As a result, future payment transfers go smoothly. This company also allows you to buy bitcoin automatically from time to time. For example, if you are interested in buying $ 50 bitcoins at the beginning of each month, Coinbase allows you to set up an automatic purchase for that amount.
Please note the terms and conditions before using this service. If you are subscribed to an automatic bit currency service, you will not be able to control the monthly BTC purchase price. Please note that Coinbase does not operate as a Bitcoin exchange, which means that you buy and sell coins directly from the company. Because the company needs to obtain coins from other buyers, you may experience delays or interruptions in the rapid movement of the market when placing orders.
BitStamp adapts to the requirements of a regular bitcoin exchange. Bitcoin acts as an intermediary, allowing you to trade with other users and not the company. There is more liquidity here and you always have a good chance of finding someone who is willing to negotiate with you. There is a starting fee of 0.5%, which can be reduced to 0.2% if you trade $ 150,000 within 30 days.
Alternative ways to buy bitcoins
Exchange is not the only way to invest in bitcoin. Local Bitcoin is often used to buy BTC offline. The website is designed to connect buyers and sellers. Bitcoin is the seller’s deposit in a bond and can only be released to buyers.
Buying bitcoins offline is not always very reliable or secure. That’s why it’s best to get to know the vendors throughout the day and let a friend tag you if things are going south.
Bitcoin is not just a modern trend. Venture capital companies believe that Bitcoin is a decent alternative to the traditional currency in the long run. There are ways to get Bitcoin into the realm of investing. As mentioned earlier, Coinbase, BitStamp, and Local Bitcoins are the most popular channels for investing in bitcoin in the United States. Do your homework and find out which avenue fills all your boxes.