What Should a Beginner Know about Bitcoin?

Getting started in the world of cryptocurrency can be quite risky if you don’t know what you are doing. Bitcoin is the front runner of the cryptocurrency race as of now. Bitcoin leverage trading could be used to acquire an immense amount of bitcoin, or it could run you bankrupt if done ignorantly. Here is everything a beginner should know about Bitcoin.

What is Bitcoin?

Bitcoin is a cryptocurrency, a form of electronic money. Bitcoin is a decentralized digital currency and can be sent from user to user through a blockchain network without the need for a middleman. This means that you can control everything you do with your money, without the need for banks.

The bank you use for Bitcoin is known as the ‘Bitcoin Wallet’, which is where you can store the Bitcoin you have saved up. These wallets are run by certain merchants. For example, one of these is called FreeWallet, which is a cold storage and allows you to withdraw from and to any cryptocurrency. The problem with Bitcoin wallets is that they are prone to hacking, and since they aren’t insured, the result ends badly for the person who loses the Bitcoin.

Other features that come along with Bitcoin include, they are irreversible, anonymous, and fast. You can never get Bitcoin back once a transaction is complete. You can however remain anonymous for any transaction, which offers a safe haven for black market users. Also, Bitcoin transactions are fast and done almost immediately through the network and confirmed within minutes. 

How Do You Acquire Bitcoin?

Acquiring Bitcoin can come from one of two ways: mining or trading. Mining Bitcoin is the act of taking powerful computer processing power and having it solve complex math algorithms that reward you with Bitcoin once solved. You can mine individually or you could join a mining pool, which allows you to team up with others to find the solutions to the math equations faster. The money is then split between the team and you do it all over again. You could also mine on the cloud, which is where you can buy computing power from someone else and you are rewarded with some of the Bitcoin they acquire. 

Trading Bitcoin involves much more risk and knowledge of the stock market. You are buying Bitcoin and trying to sell it for a higher price, and since the volatility is so high, the chances of making money are increased. With this also means that the chances of losing money are quite high, which is why knowledge of the market is very important. Investing in Bitcoin could cost you your hard earned cash, so make sure you make smart investments. 

Either mining or trading can bring you immense amounts of money when done correctly, but there are many risks that could limit your success. Always make sure you are staying safe in the world of cryptocurrency because nothing is ever guaranteed, no matter the situation.

 

Disclaimer: This content does not necessarily represent the views of IWB.