Cryptocurrency. To the everyday consumer, this word may sound like something that hackers use to buy illegal things on the dark web. While public opinion may have thought of this currency that way in the past, the reality is that it’s not! Up until very recently, most businesses and corporations all over America (and the world for that matter) have disregarded the potential that something like Bitcoin, the most prominent form of cryptocurrency, has. But just how did this virtual currency come out of nowhere?
The history of cryptocurrency is inherently brief due to its nature. A currency completely regulated over the Internet can’t be very old, on account of the rather short history of the Internet itself. The first cryptocurrencies were created around the early 1980’s, for purposes other than free trade. These systems were well maintained, but did not last very long because, other than the creators and a few other geniuses, few people knew how to effectively use them. That was until 2009, when a currency called Bitcoin was proposed by a software developer named Satoshi Nakamoto. He suggested the use of a mathematical model to create a currency that was fully regulated by the people. The currency would be decentralized, meaning it could be used between many different businesses and individuals with no central authority or third-party involvement.
Bitcoin is basically a digital form of cash that can be purchased with physical currency. Since its creation in 2009, Bitcoin has seen an enormous (though sometimes highly unstable) amount of growth. Contrasting its starting worth of less than one penny, one Bitcoin is now worth over 11,000 US Dollars. So, how did Bitcoin become worth so much money so quickly?
Around 2013, businesses began realizing the benefits that came with decentralized currencies such as Bitcoin. Ultimately, decentralized currencies create less risk for things such as censorship or fraud of transactions. These businesses started realizing the potential in investing in a currency that can be directly traded and how the use of such a currency could bolster profits through the avoidance of the hidden fees that come from traditional banks. The value skyrocketed within a few years, transforming Bitcoin into one of the highest-grossing investments that businesses are buying into today.
So how does one buy Bitcoin?
It may be easier to comprehend the process of purchasing Bitcoin as making an investment that you can later use to buy other things. One may buy Bitcoin through a simple process that is as easy as three quick steps.
- Pick a Bitcoin wallet. There are a lot of different options out there, and each one has its own unique characteristics.
- Choose a Bitcoin exchange. This is like a stock brokerage, minus the actual broker. Anyone can legally buy and sell Bitcoins on an exchange such as Coinbase, an app that is free to download on any smartphone. Again, there are plenty of options to choose from.
- Buy. Choose the appropriate payment method, and buy some Bitcoins! (It really is that easy!)
What exactly can you do with Bitcoin?
After purchasing some Bitcoins, it’s time to decide on what you would like to do with them. One option is to save: The price of Bitcoin, although not guaranteed, will likely go up in the near future. So being able to sell Bitcoins some time down the road could result in a significant profit.
There is also an option to spend your Bitcoins. Many businesses have begun processes to accept Bitcoin as a form of payment in exchange for goods and services. Microsoft, Dell, Newegg, TigerDirect, and Overstock, to name a few, have all taken measures of their own to accept this new-age form of money. Furthermore, there are plenty of sites that are 100% legal where buyers can use Bitcoins to purchase gift cards to well-known retailers and restaurants such as Walmart, Amazon, TGI Fridays, GameStop, and more.
Things to consider about investing in Bitcoin
Experts say that by the year 2022, Bitcoin might be a common form of transaction in people’s everyday lives. So much so that there may come a point that you can walk into Starbucks and buy a cup of coffee directly with Bitcoin. Although the price may seem expensive now, by that time, the price may double, or even triple. Or it could plummet to nearly nothing. Bitcoin, like stocks, will lose and gain value depending on the demand for the currency in the market that uses it. Right now, the demand is very high, and will therefore likely drive an increase in the value. However, increases in value are never guaranteed, so always be cautious when investing!
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