Over the past several years, a new type of currency has become popular. Bitcoin has been discussed in purchases of several items since its debut several years ago. One of its advantages is the ability to be used virtually. But, what is it, exactly? This following information will explain what Bitcoin is, how its price is affected, and how it can be used.
What Is Bitcoin?
Bitcoin has established itself as a popular – yet controversial – virtual currency for over five years. But, what exactly is it? According to The Telegraph, Bitcoin is a digital currency that is used for secure payments using “decentralized technology,” and it doesn’t require banks or people’s names. One of the reasons it was introduced in the first place was to “liberate money” just like the internet liberated information.
What Is It For?
This type of currency is used because people see value in government-free currency, which isn’t charged by banks for its use. It has been used for private, and anonymous transactions. However, there have been some negative ties to it. It is the payment of choice for illegal transactions including drug deals.
Yet, there have been numerous positive reasons to use it. It has helped to fund companies, invest cash, and transfer funds. It’s all done without paying any fees like you normally would with a bank. It can also be spent online, and at certain retailers.
Still, others are holding on to their bitcoins in the same way that people keep stocks. Since its price fluctuates, people can net huge gains. In fact, early investors have done just that.
How Does It Work?
Bitcoin works on a blockchain, which keeps track of all the transactions on a decentralized record. All bitcoin users have access to, and can update, this record.
In order to get involved, a user must generate a block on the network, which uses the user’s computer power. Doing so allows them to create the block, which lets the user earn “money” by keeping the network running. However, there are limits, which protect the value from being diluted.
For those that are skeptical of it’s value, there are some interesting statistics. As of July 2017, one Bitcoin’s value was estimated to be $1,268, which was more than one ounce of gold at the time. However, things have changed since then.
Just prior to Christmas 2017, interest for Bitcoin decreased, and the price plummeted. It went from a high value of $20,000 to approximately $14,000, which has sparked trades, and concern. The price has fluctuated since its debut several years ago. While some are concerned about a “Bitcoin Bubble”, others see this as just the beginning for the currency.
Is It Worth The Investment?
One of the best things about Bitcoin is that users won’t have to deal with fraud or theft since it’s decentralized. Additionally, investors have seen huge gains of over $1,000. In fact, if you invested that much in 2013, you might be a millionaire today. However, it is worth repeating the price is volatile just like most stocks. So, patience could yield a big reward.
While Bitcoin has caused a conundrum for some, others are starting to see the value in the alternative currency. It’s independence from other forms of payment has sparked curiosity, and interest. The ability to pay for things without worrying about fees is a definite plus. However, like a stock, its volatile value makes it problematic for others. The information given in this guide should help answer the basic questions, which should allow you to delve deeper into your own personal investment adventure.A complete guide to Bitcoin by Megan Ritter