Bitcoin is a term that is familiar to most people. This is the most popular cryptocurrency in our modern world, and at the time of writing it has been so for many years. There is also no reason to believe that this is something that will change!
Despite the fact that Bitcoin is the most popular cryptocurrency we have, this does not mean that there are no other cryptocurrencies that provide Bitcoin with tough competition. However, it is not these cryptocurrencies that we are going to focus on in this article.
Below we will get to know Bitcoin better. Because even though this is a concept that has been on everyone’s lips for many years, it is not a matter of course that absolutely everyone has full control over what it really is about. But we will hopefully change that here!
Cryptocurrency for beginners .
What is Bitcoin?
So to the most important question: What exactly is Bitcoin? This is another question that most people asked you in 2009 and in the years that followed when Bitcoin was still relatively new to the market.
This is a question that can be answered in both a very simple and a little more advanced way. In this case, we will go for a middle ground, in that this is an article that contains quite a bit of information about Bitcoin on a general level.
In short, Bitcoin is a cryptocurrency , but this is something most people already know. This cryptocurrency is built on the basis of an open source code, which means that no one has a patent on the source code. In other words, it is something absolutely anyone can use.
In addition, Bitcoin is operated by a peer to peer network. When you combine this with open source, it simply means that you do not have to deal with a third party when using Bitcoin in the same way as you have to when using a traditional bank.
All about: Peer-2-peer network .
This is how Bitcoin works
An open source and peer to peer network is not the only thing Bitcoin is characterized by. It can also be said that this cryptocurrency is based on blockchain technology.
As the name suggests, Bitcoin consists of a number of chains with blocks. And each block contains information about the current transaction. It can thus be information about the person who sent and the person who received the money, as well as how much it was about.
In practice, this means that you are not dependent on a third party to complete a transaction. Another thing that separates cryptocurrencies like Bitcoin from traditional payment methods is that you do not always know who you are paying the money to either. Because there is no requirement here either.
As most people probably understand, this is something that can bring both positive and negative things with it. And this is something we will take a closer look at below.
Benefits of Bitcoin
There are usually many benefits to using cryptocurrency, and Bitcoin is of course no exception. As the most well-known cryptocurrency, the only thing missing is that there are also many benefits to Bitcoin.
Below we will go through some of the benefits that you can take advantage of by completing transactions through Bitcoin.
The transaction takes place immediately
Any transaction that is completed using Bitcoin takes place immediately. This simply means that the money is transferred from sender to recipient as soon as the sender presses the execution button.
It does not matter where you are when you complete transactions. You can be in Great Britain , while the person you are sending the money to is in Denmark or the USA. When it comes to this, there are no restrictions with Bitcoin!
Nor is it important how light or dark it is when you look out of one of the windows in your home. In practice, this means that you can complete a transaction through Bitcoin both at midnight or at the moment your local mall opens – whenever you want.
You do not have to identify yourself
As Bitcoin is a decentralized cryptocurrency , there is no third party involved in the transaction. This simply means that you do not have to identify yourself to complete a transaction.
This applies regardless of whether it is you who is to transfer the money, or whether it is you who is to receive a sum of money from another person. There is thus no requirement that you have to identify yourself to complete a transaction through Bitcoin!
However, it is important to be aware that transactions carried out using Bitcoin are more or less public property. This means that the transactions you or someone else carries out are open so that everyone can see it.
However, the fact that transactions carried out by Bitcoin are public property means that you are faced with other issues that you do not like to think about when using other tools. Then it is important to be extra careful so that both parties remain anonymous!
It is cheap to use Bitcoin
It is no secret that it is not free to complete a transaction. But one thing is for sure, and that is that it is much cheaper to complete a transaction using Bitcoin than to use another player such as a bank or the like.
There are many examples of such actors. Both in Great Britain and in the world in general. If you are a customer of DNB, you have to pay around NOK 75 to complete a transaction ( see the crazy prices here ), while you have to pay a fee of around NOK 60 to do the same in Nordea.
However, it is not as expensive when you complete a transaction using Bitcoin, so here it is definitely money to save! It is up to you how long you want the transaction to take, and this will be reflected in the fee you will have to pay.
But there is one thing we can assure you, and that is that it is cheaper to use Bitcoin than one of the other “traditional” players. Let’s say you want transactions to be validated within the next 4 hours (or the next 24 blocks), then you have to pay around 45 cents.
Disadvantages of Bitcoin
Once we have mentioned the advantages of Bitcoin, then we have to mention some of the disadvantages of using this payment method as well. However, it is important to emphasize that there are not many disadvantages, so the advantages undoubtedly outweigh them here!
Not widely accepted yet
Despite the fact that Bitcoin is considered the most popular cryptocurrency on the crypto market today, it is not a matter of course that it is widely accepted. Because it is not at all – at least not at the present time.
With that said, it is not the case that there are no businesses that accept Bitcoin as a payment method. It certainly does, but it is far from an overwhelming number. At the time of writing, there are around 15,000 businesses that allow customers to pay with Bitcoin.
In comparison, around 45 million businesses accept the Mastercard and Visa payment cards as payment methods. This is what we call an impressive number, so Bitcoin still has a long way to go even though they are undoubtedly on the right track!
It can also be mentioned that Bitcoin is more common for use in connection with shopping online, than it is to find the cryptocurrency as a payment method in one of the local shops in the town or district where you live. So you want to use Bitcoin? Shop online!
You have to take care of the security yourself
As we just mentioned above, Bitcoin does not have the same security network as the “traditional” players. It does not work so that you have to identify yourself, which can be both positive and negative.
But since the overview of transactions made with Bitcoin is open to anyone and everyone, the focus on security is not as great. At least not if you do not take care of it yourself. In practice, this means that you have to provide the security yourself, for it to be present.
The same applies if you should be so unlucky as to lose your login information so that an unauthorized person can obtain it. If the same thing happens with a bank card, you can close it in a few minutes by contacting the bank you are a customer of.
But that is not how it works in connection with the use of Bitcoin. Here it is you who have to be extra careful , because if you have first lost something related to Bitcoin, you will not get it back in the same way as you can with a “traditional” player.
Like most other cryptocurrencies, Bitcoin is characterized by high volatility. In practice, this means that it is completely impossible to know whether the value of bitcoins increases or decreases – and when it does.
The change may take 5 minutes after you make an investment, but it can also wait a few weeks. The value of bitcoins can also behave like a yo-yo, which means that the value bounces up and down faster than you can keep up with.
Thus, Bitcoin is a cryptocurrency that is characterized by high volatility, and therefore you should never invest more in it than what you actually have red to lose. For example, you should at all times avoid investing your entire monthly salary in bitcoins.
Wondering why it’s not a good idea to invest your entire monthly salary in bitcoins? This is because there is actually a real chance that you will end up left with nothing already the first week of the new month. And of course it will be very awkward!
How to invest in Bitcoin
As long as you have devised a good and safe strategy, no one is saying that you can not invest in Bitcoin. In fact, only you can decide if you think this is a good investment or not. The most important thing is that you have spent a lot of time on your strategy!
How to buy Bitcoin .
Read up on cryptocurrency, and think of a strategy
First and foremost, you should read up on cryptocurrencies so that you really understand how to proceed before you get started. In this case, of course, it’s Bitcoin you have to read more about!
Once you have done that, you can begin the process of devising a strategy. In the case of cryptocurrency, it can be quite difficult, but a good rule of thumb is to never invest more than you can afford to lose. And the reason for that is that the high volatility!
Find a crypto exchange and create a user
Then you have to find a crypto exchange that you want to use. Once this is done, the next step is to create a user on the relevant crypto exchange.
How to create a user can vary slightly from crypto exchange to crypto exchange. But each crypto exchange has many good resources that can help you get this done while you are doing it.
Make a deposit
The next step on the way to the goal is to make a deposit to your user account. In connection with this, it is important to keep your strategy in mind at all times.
For example, it is never a good idea to invest large sums at once. Test the water a little first before you decide to invest a slightly larger amount. However, be careful not to get water over your head.
Shop your way!
When all the upcoming steps have been completed, there is only one thing left. And that is to start trading. The starting point for the trade is always the amount you deposited in your user account during the previous step!
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