How to buy bitcoin? What is bitcoin? There is perhaps no place in the world that has not been hit by the wave of cryptocurrency popularity. In some places they are making profits, in others they are losing money. Surprisingly, many people still consider bitcoin to be something otherworldly. They shouldn’t think so, however, because bitcoin is making its way into our everyday lives as an investment, a means of payment, and a concept.
Bitcoin is the most famous cryptocurrency in the world. This term was originally used by a narrow circle of people, but since the popularization of blockchain technology and the rapid growth in the value of digital money, it has become known to many people. The Internet is full of news about the movement of the price of Bitcoin, stories about the huge profits and prospects of this currency. However, before investing in Bitcoin, you need to understand its features, advantages and disadvantages, how it differs from other currencies, and how to make money from it. In our article today, we will learn more about what Bitcoin is, where to buy Bitcoin and the Bitcoin exchange rate.
List of Content
- But what is Bitcoin in general and how does it work in the world system?
- How to get involved in the cryptocurrency world and how to buy bitcoin
- Main advantages of Bitcoin
- A few final words
But what is Bitcoin in general and how does it work in the world system?
Bitcoin (BTC) is an electronic payment system similar to digital wallets and bank accounts. The basic unit of payment online is bitcoin. Unlike traditional money, digital coins are not tied to any country’s economy or central bank. All activities related to issuing new money, processing payments and creating accounts are performed by users.
The system was first developed in 2008 by creator Satoshi Nakata and developer Hel Finney and was officially launched on January 3, 2009. Bitcoin was a protest against traditional money and the binding of finance to one country. The idea of independent money was supported by a small community, but as the number of users and the value of BTC USD increased, the system began to gain popularity.
When the Bitcoin blockchain was launched in 2009, the first cryptocurrency had zero value. By May 2010, the value had increased to 10 cents. By the way, every year on May 22, the cryptocurrency community celebrates Bitcoin Pizza Day: on this day in 2010, a famous purchase of pizza for 10,000 BTC took place.
In April 2011, 1 BTC was worth 1 USD, but a few months later, on June 7, its price reached almost 30 USD. After that, the value of Bitcoin began to decline, falling to $2 in mid-November 2011. 2012 was a joyless year, but 2013 saw the first “bull rally”: if at the beginning of the year bitcoin cost a little over $13, in December its price rose to a record $1,237 and then fell back to less than $700. Over the course of 2014, Bitcoin gradually declined, reaching a value of $315 in early 2015. But the drop didn’t last too long and bitcoin started to rise in price again. In December 2017, its value was already 19650 USD. The highest value of Bitcoin dates back to 12/11/2021, specifically it was 64400 USD.
Global economic and political instability hit the financial market and negatively affected the price of the first cryptocurrency, which fell back to around $20,000 by the fall of 2022.
To fully understand Bitcoin, it is necessary to understand how the system works, how Bitcoin wallets are created and how transactions are processed online.
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This is a brief overview of the system:
- A Bitcoin wallet is similar to a bank or electronic account in which money is stored. They register using special software or websites. When creating a wallet, the user receives a public key (account number) and a private key (password for managing funds).
- Transactions are required to transfer bitcoins between users’ wallets. All transactions are stored in a shared pool that is processed by other members of the system. However, a fee needs to be paid to confirm the transaction.
- Miners – those who “mine” bitcoins – miners represent the basis of the security and performance of the system. In exchange for a reward, they use computing power to keep the network running. Miners are responsible for mining new blocks and processing transactions.
- Blockchain is a sequential chain of blocks in which transaction information is recorded. The essence of this technology is that data is stored on several independent servers, and in case of problems or outages, the network will remain functional.
Currently, quite effective tools for transaction analysis have already been developed. Their function allows cryptocurrency companies to immediately find out how reliable their counterparty is and whether they are not working with funds that were previously used in illegal financial transactions.
Now that we know the key cryptocurrency terms, let’s see where to buy bitcoin.
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How to get involved in the cryptocurrency world and how to buy bitcoin
Today’s digital money users can acquire cryptocurrencies in several ways. Some of them are more convenient and profitable, so they are more popular. Others are just catching on with users and in some ways losing out to their competitors.
Let’s take a look at the most common services that offer Bitcoin exchange transactions. Here are 5 easy ways for a newbie to buy Bitcoin, even if it’s their first crypto market transaction.
P2P trading on the stock exchange
The easiest and best option where to buy bitcoin is the so-called “P2P trading”.
The main condition for buying or selling cryptocurrencies in this way is registration on the exchange itself and subsequent verification of the account, which will allow you to carry out all the necessary transactions without any problems.
Use of electronic exchangers
Another way to buy bitcoins online is to use electronic exchanges, through which you can buy or sell this or that cryptocurrency 24 hours a day, 7 days a week, by paying with Czech bank cards.
In this case, the exchange office sets its own btc exchange rate.
Cryptocurrency exchange terminals
This is the easiest way to buy Bitcoin or other cryptocurrency, but only if you have physical access to the terminal. Outwardly, it is almost the same as most ordinary bank terminals. The mechanism of operation is similar: you choose the desired cryptocurrency, deposit cash, confirm the transaction and it’s done.
Stone exchange offices
There are also networks of wholesale exchange offices. They are often used when large amounts of cash (from the equivalent of $5,000) need to be exchanged.
How does it work? The customer visits the exchange office and specifies all the details and fees. He then hands over the cash and his wallet address and receives the cryptocurrency he needs.
A cryptocurrency exchange is similar to a stock exchange or a regular currency exchange. It is a place where a number of people sell digital money for one price and others buy it. It is also a place where cryptocurrencies can be securely stored, exchanged and withdrawn to personal wallets.
Every well-known cryptocurrency exchange requests the user’s personal data (passport, photo, etc.). Cryptocurrency trading is not permitted without providing this information. Therefore, all transactions on these platforms are maximally protected from fraudsters, but users cannot remain anonymous.
Main advantages of Bitcoin
Among the main advantages of Bitcoin, the following should be mentioned:
- Bitcoin is a decentralized system based on a software protocol and the principle of direct exchange between users.
- All transactions in the Bitcoin network are recorded in a distributed ledger, the so-called blockchain, a copy of which is stored in a complete node connected to the global Bitcoin network. Data in the blockchain is regularly verified using the Proof-of-Work consensus algorithm.
- The bitcoin network uses the bitcoin unit of the same name (ticker symbol BTC), the first and most well-known cryptocurrency, for settlement. Since its inception, Bitcoin has remained the largest cryptocurrency by market capitalization.
- Bitcoin works without the involvement of any regulatory body or central bank; coin issuance and transaction processing are performed collectively by network participants. So no one can control Bitcoin, block or cancel transactions. However, anyone can join the network and use it to make transfers or develop Bitcoin code.
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A few final words
Recently, cryptocurrencies are being declared as a full-fledged alternative to fiat money. With this volatility of virtual coins, many countries are still taking risks and betting on cutting edge technology. El Salvador is the only country in the world that has declared Bitcoin as legal tender. However, dozens of other states are loyal to cryptocurrency and do not consider its use illegal. These include the US, Canada, Australia, Denmark, France, Germany and others.
Bitcoin’s value also comes from its network effect: the more participants, the higher the price. Bitcoin is still an experimental technology and its price fluctuates significantly, which is used by both traders and ordinary holders.