What exactly is Bitcoin?
Bitcoin is a decentralized, peer to peer, digital currency system, designed to give online users the ability to process transactions via digital unit of trade known as Bitcoins. In other words, it is a virtual currency.
The Bitcoin system was created in the year 2009 by an undisclosed programmer(s). Since then, Bitcoin has garnered huge attention as well as controversy as an alternative to US dollar, Euros and commodity currencies such as gold and silver.
Increase to Popularity
Bitcoin had not achieved much attention in the world of business plus finance before the year 2009. This rose to prominence in the 2011-2012 period when it gained over 300%. Bitcoin has had a 400% growth in its value since the August of last year.
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As a result, venture capital firms plus investors around the world continue to pay significance to the cryptocurrency.
In the first half of 2014, venture capital firms invested $57 million in Bitcoin in the very first quarter, followed by another $73 mil in the second quarter amounting to a total of $130 million, that is 50% greater than last year’s complete of $88 million. This is a full contrast to the scenario in 2012 exactly where Bitcoin firms amassed a relatively meagre sum of $2. 2 million.
These statistics prove beyond doubt that Bitcoin is worth your investment, which begs the question, how can you buy and spend money on Bitcoin?
A guideline for beginner investors in Bitcoin
The easiest and least complicated method to invest in Bitcoin is by purchasing bitcoins. There are a lot of established firms, mainly in the US as well as abroad, that are involved in the business of buying and selling bitcoins, abbreviated as BTC.
If you are living in the U. S i9000. then Coinbase is the place you would like. Coinbase provides it’s clients along with BTC at an estimated mark up of 1% over the existing market price. Residents of the United States have the option to synchronize their Coinbase wallets with their checking accounts. As a result, future payment transfers are made hassle free. This company also gives you the choice of automatic bitcoin buying from time to time. For instance, if you’re interested to purchase $50 in bitcoins at the beginning of each month, Coinbase allows you to set up an auto buy for that amount.
Be mindful of the terms and conditions before you begin to make use of this service. If you have subscribed for an automatic bit coin service, you will not be able to control the price from which the BTC is bought every month. Note that Coinbase is does not function as Bitcoin exchange i. e. you purchase and sell the coins directly from the firm. Since the firm has to source the coins from other buyers, you may face delays or disruptions whenever laying orders during fast marketplace moves.
BitStamp suits the requirements of a conventional bitcoin exchange. Bitcoin acts as an intermediary which allows you to trade with other users and not the organization itself. Here the liquidity is usually higher and you always have a good opportunity to find someone who is willing to business with you. There is an initial fee associated with 0. 5% which can be reduced in order to 0. 2% if you trade $150, 000 in a period of 30 days.
Alternative ways to purchase Bitcoins
Exchanging isn’t the only method of expenditure in bitcoins. Local Bitcoins is usually used to buy BTC offline. The website is designed to link potential buyers and retailers. The bitcoins are locker from the seller in an escrow and can only be released to buyers.
Purchasing bitcoins offline isn’t always extremely reliable or safe. Hence they have preferable to meet the sellers during day time and let a friend tag along with you just in case things go south.