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| Bitcoin photo |
Cryptocurrency? Blockchain? These words remind many people more of the Matrix Movies than of real money.
But last year Bitcoin increased its value by more than 1500% and many people all around the world begin to wonder what's it all about.
Endless reports and explanations are going around how the Bitcoin system functions in detail, but unfortunately, the whole topic is such a complex one, that many people are back to square one after reading them.
Is it money? Is it an investment?
It has become both
So let's get back to 2009.
A group of people named Satoshi Nakamoto invented the Bitcoin System, which was, heavily summarized, the attempt to set up a globally working, anonymous currency for everybody without involving the existing bank system.
The idea was simple:
In your daily life, you deposit your money in your bank of choice.
When you want to send money to another person, you d it to him or her -you send it to his or her bank account by using the bank transfer system.
And in 2009, many people realized that our global banking system is not as seabass as it should be - so these people tried to create a way to transfer money that is independent of the existing system.
Bitcoin works differently
- You don't deposit your money on an account of an online bank which could collapse in bad times, your money lies in an independent online wallet.
Heavily simplified, you are your bank.
The only thing you have to do:
you have to look for a service that provides these kinds of Bitcoin wallets;
using these services you get also access to it.
And these services offer you also the option to change your money to bitcoin and back into your currency of choice, whether it's a Dollar, Euro, or whatever.
If you still don't understand, what Bitcoin is, I want to ask you a question:
what do the bills in your pocket represent?
Right, they display an amount of money that you own.
These paper bills confirm that you own that amount of money.
And if you take your bills to your bank and put them in your account, you will also see the amount on your account - the bank also confirms that you own that money.
It's just an accounting system, nothing else.
And here you can also find the answer to what bitcoin is: it's also an accounting system.
And in this case not a government, not a bank, the whole world confirms that you own that amount of money.
That's all you need to know.
But who takes y money if there is no bank?
- It's as simple as that: everybody who is a part of this system.
- The system checks itself at every transaction, and it provides a directory (Blockchain) where every transaction is registered.
- This directory cannot be edited or manipulated, it just records all the transactions within the system - and so your money is safe.
- So transfers within the Bitcoin system are anonymous, and they go peer to peer - which only means that there is no intermediate step, from your wallet to the other wallet,
- no banks involved.
- And that's it.
But what can you
Don't worry, they are not just to watch.
The main problem Bitcoin had until this year was that many people didn't see it for a long time as something which could be suitable for -
it was just something virtual and weird thing, reserved only for nerds.
So until this year, there have been only a few online shops that offered a payment option via Bitcoin -
but this seems to be history after the way Bitcoin took last year.
The number of online shops which accept Bitcoin increases every day, and probably it will not take long until Bitcoin will be a common way to pay at the shop at your corner.
A huge step for Bitcoin is year has been made by Amazon -
the first global Big Player which accepts Bitcoin.
Another way you can use Bitcoihich is way more interesting these days -
Investing in Bitcoins
As you might have heard Bitcoin increased its worth in the last year by more than 900% -
what's the rate of your bank again?
If you would have invested 1000$ at the beginning of the year in Bitcoins, you could now spend 9000$.
Sounds interesting, but what's the catch?
- It's quite simple:
- Bitcoin is a system of trust, just like every other currency.
- The note in your hand, whether its a Dollar, Eur,o or anything else, is only worth the number on it as long as you and everybody else believe that has this worth -
- otherwise,e it's just paper.
- The reason why Bitcoin increases its worth so rapidly is that the trust in this currency and its whole system increased that much the last time.
- But on the other side of the coin, you can also see the risk -
- wherever something grows so rapidly, whether it's a currency, a product,t or a company,
- it can also lose its worth very quickly if people start to lose trust in it.
- And that's also possible if you invest in Bitcoins, no question.
- But that's the kind of risk you have always if you decide to invest in something.
So was it just hype?
Yes and no.
- Bitcoin hasn't been invented to become a new toy of speculation and investment,
- its main purpose is to revolutionize our idea of money.
- Nevertheless, Bitcoin increases its worth so rapidly that it becomes many
- people a good chance to make quick money.
And that was the problem:
- Many people who only wanted to make quick money jumped off the train and left him when they thought it would be the time to cash up.
Bitcoin didn't lose its worth, just its price
- So in the firthe st weeks of 2018, we could regard a rapid downward trend in the Bitcoin Chart -
- the beginning of the end of Bitcoin?
- To be honest, there are no real indicators for it.
- Compared to other cryptocurrencies, the Development Team of Bitcoin still seems to have a huge lead when it comes to technical infrastructure and experience.
- And as Micheal Sherman, Author of a crypto talk recently said:
"Bitcoin didn't lose its worth. Just its price."
- And as we could see, the recovery of Bitcoin has already begun in the few st days.
- But it's to be hoped that its growth would return to a more stable and healthier way
- in the next months; slow, but sustainable.
Don't invest in something because it's cool and everybody does it
- In the,e en,d it's your money and you should take care of it. Only if you are convinced that it's a pretty good deal - then you should invest.
- So if you decide to invest in Bitcoins, good advice would be to start slow and look if you feel good about your investment.
- Take your time to check the development of the course, and if you have a good feeling
- you can start to go big - never invest all your money in just one investment.
- If you want to take a look at the Traders which provide Bitcoin,
- you can find a list of Approved Traders on The TestDummies.com
