What is Bitcoin?
Bitcoin is a decentralized, peer to peer, digital currency system, designed to give online users the ability to process transactions through a digital unit of exchange known as Bitcoins. In other words, it’s a virtual currency.
The Bitcoin system was created in 2009 by an undisclosed programmer (s). Since then, Bitcoin has gained a lot of attention as well as controversy as an alternative to the US dollar, Euros and commodity currencies such as gold and silver.
Rise in Popularity
Bitcoin did not receive much attention in the business and financial world before 2009. It became famous during 2011-2012 when it gained more than 300%. Bitcoin has had 400% growth in its value since August last year. As a result, venture capital firms and investors around the world continue to place importance on cryptocurrency.
In the first half of 2014, venture capital firms invested $ 57 million in Bitcoin in the first quarter, followed by another $ 73 million in the second quarter amounting to a total of $ 130 million, which is 50% more than last year a total of $ 88 million. This is a complete contrast to the 2012 scenario where Bitcoin companies amassed a relatively small amount of $ 2.2 million.
These statistics prove beyond a doubt that Bitcoin is worth your investment, which raises the question, how do you buy and invest in Bitcoin?
A guide for new Bitcoin investors
The easiest and least complicated way to invest in Bitcoin is to buy bitcoins. There are many established companies, especially in the US as well as abroad, that are involved in the business of buying and selling bitcoins, abbreviated BTC.
If you live in the US then Coinbase is the place you are looking for. Coinbase offers its clients BTC at the estimated mark of 1% of the current market price. U.S. residents have the option to sync their Coinbase wallets to their bank accounts. As a result, future payment transfers are made without a problem. This company also gives you the option to automatically buy bitcoin every now and then. For example, if you’re interested in buying $ 50 in bitcoins at the beginning of each month, Coinbase allows you to place an auto purchase for that amount.
Consider the terms and conditions before you start using this service. If you have subscribed to an automatic bit coin service, then you cannot control the price at which BTC is purchased each month. Note that Coinbase does not operate as a Bitcoin exchange ie you buy and sell coins directly from the company. Because the company has to take coins from other buyers, you may face delays or interruptions when placing orders during fast-moving market movements.
BitStamp fits the requirements of a traditional bitcoin exchange. Bitcoin acts as an intermediary that allows you to trade with other users and not the company itself. Here liquidity is higher and you always have a good chance of finding someone willing to sell with you. There is an initial fee of 0.5% that can be as low as 0.2% if you sell $ 150,000 in a 30 -day period.
Alternative ways to buy Bitcoins
Exchange is not the only way to invest in bitcoins. Local Bitcoins are often used to buy BTC offline. The website is designed to link potential buyers and sellers. Bitcoin lockers are from the seller in an escrow and can only be issued by buyers.
Buying bitcoins offline is not always reliable or secure. So it’s best to meet with vendors during the day and let a friend be with you when things go south.
Bitcoin is not just a modern trend. Venture capital companies consider Bitcoin to be a decent replacement for conventional money in the long run. There are coinless ways for you to enter the bitcoin investment sphere. As mentioned earlier, Coinbase, BitStamp and Local Bitcoins are the most popular bitcoin investment channels in the United States. Do your homework and figure out how to mark all your boxes.