Bitcoin is a type of money that is completely virtual. It is often described as cryptocurrency, a digital or a virtual currency, that emerged after the 2008 financial crisis. Basically it is like an online version of cash and each Bitcoin is a computer file which can be stored on a smartphone or computer in a digital wallet app. People can send Bitcoins and you can further send it to other people, but many shops do not allow Bitcoins and even some countries are completely against it and have banned it altogether. Every single transaction is safe because it relies on the blockchain technology, that means every transaction is recorded in a public list called the blockchain for safety measures so as no person can spend Bitcoins they do not own or undo transactions.
How to get Bitcoins
There are 3 main ways to get Bitcoins
- Buying Bitcoins using real money.
- Accepting them for goods and services, i.e. selling things and letting people pay you Bitcoin in return.
- Mining new Bitcoins, they can be created using a computer.
Why do people want Bitcoins and why are people buying it right now?
Though all transactions are recorded, people are still liking Bitcoins because of the fact they aren’t under the government or banks control. People have the luxury of spending their Bitcoins fairly anonymously and no one can find out which account number is yours unless you tell them. The main reason why people are buying it right now is the hype and sudden rise in it’s value, drawing in hundreds of new buyers looking to make money. Many finance firms are investing in the market as well. Since money is not the only valuable thing, gold and diamond hold a significant value as well, and this is another very important reason why people are buy Bitcoins right now because of it’s comparisons with gold, which also fits in with the trends in the global economy.
How to invest in Bitcoin?
Purchasing Bitcoin Standalone
- One can invest in Bitcoin by purchasing a coin or a fraction of it through apps like Coinbase. To do this one need to enter his personal information to create an account then further deposit the money which would be used in buying bitcoin. Then later on just like any other stock or ETF one can gets the access to Bitcoin’s performance along with the option either to buy or sell. Once you buy it this Bitcoin is kept safe in wallet which is only accessible to you.
- The people who are willing to invest in Bitcoin has another alternative which is Greyscale’s Bitcoin Investment Trust (GBTC) in this Bitcoin can be invested. Use of GBTC make Bitcoin investment a prolific one. The advantage of this is that shares of GBTC are valid to be held in IRA, both IRA and other accounts as well in general it provides with an easy access for all type of investors and accounts respectively.
Is it Completely Secure?
The answer is No! Even though every transaction is recorded publically making it very difficult to copy, make new ones or spend the ones which you don’t own but still they are not completely secure. The FCA has warned about the cryptocurrencies. The city regulator has shown signs of worry that crypto investment firms could be overstating potential payouts, and might be understating the risks. Being a new and relatively lightly regulated market, there is no state-backed compensation for the customers if something goes wrong. There have also been Bitcoin scams from websites that let you store your Bitcoins remotely. There is also one possibility that you lose your Bitcoin wallet or delete your Bitcoins which might be lost permanently. Another important reason why using Bitcoins might be risky is the uncertainty of it’s value. Bitcoins were created in 2009 and since then it’s value has gone up and down n number of times and that is why many people don’t find it save to convert your real money into Bitcoins.
Future of Bitcoin
Is the future of Bitcoin bright?
Many people possess a common view which is that Bitcoin can never be a currency and there are valid reasons behind it;
- Bitcoins aren’t gonna be controlled by the government of the country like currency, it’s being monitored by those who have it in excess.
- The manufacturing cost of Bitcoin is skyrocketing. It’s found that the cost of its production is -1000 USD on an average.
- Being anonymous it’s more susceptible to issues like black money generation, money laundering and untraceable and if it gets hacked the Bitcoins are gone forever.
Investing in Bitcoin might be very risky one can only invest in that if he is capable enough to bear the loss, the ones wishing to invest for the sake of doing it can try investing a little just to take the experience.
Written By- Rituja Roy
Edited By- Priyanka Sukhwani