What is bitcoin?
Bitcoin is a decentralized, peer-to-peer system of digital currencies designed to give online users the ability to process transactions via a digital exchange unit known as Bitcoins. In other words, it is a virtual currency.
The Bitcoin system was created in 2009 by an undisclosed programmer(s). Since then, Bitcoin has received a lot of attention as well as controversy as an alternative to the US dollar, the euro, and commodity currencies such as gold and silver.
Rise to popularity
Bitcoin didn’t get much attention in the world of business and finance before 2009. It rose to prominence in 2011-2012 when it gained more than 300%. Bitcoin has seen a 400% growth in its value since August of last year. As a result, investors and venture capital firms around the world continue to attach importance to cryptocurrency.
In the first half of 2014, venture capital firms invested $57 million in bitcoin in the first quarter, followed by another $73 million in the second quarter with a total value of $130 million, which is 50% more than last year’s total of $88 million. . This is a complete contradiction to the scenario in 2012 where Bitcoin companies raised a relatively negligible amount of $2.2 million.
These stats prove beyond doubt that Bitcoin is worth your investment, which begs the question, How can you buy and invest in Bitcoin?
A Guide for Beginner Bitcoin Investors
The easiest and least complicated way to invest in Bitcoin is to buy Bitcoins. There are a lot of well-established companies, mainly in the US as well as abroad, that are involved in the business of buying and selling bitcoins, abbreviated as BTC.
Queen Piece
If you live in the US, Coinbase is the place to look. Coinbase provides its customers with BTC at an estimated rate of 1% over the current market price. US residents have the option to sync their Coinbase wallets with their bank accounts. As a result, future payment transfers are made hassle-free. This company also gives you the option to buy automatic bitcoin from time to time. For example, if you are interested in buying $50 of bitcoins at the beginning of each month, Coinbase allows you to set up an automatic purchase for that amount.
Consider the terms and conditions before you start using this service. If you have subscribed to the automatic bit coin service, you will not be able to control the price at which BTC is purchased each month. Note that Coinbase does not operate as a Bitcoin exchange, i.e. you buy and sell coins directly from the company. Since the company has to obtain coins from other buyers, it may encounter delays or disruptions when placing orders during rapid market movements.
BitStamp
BitStamp fits the requirements of a traditional bitcoin exchange. Bitcoin acts as an intermediary that allows you to trade with other users and not with the company itself. The liquidity here is higher and you always have a good chance of finding someone willing to trade with you. There is an initial fee of 0.5% that can be reduced to 0.2% if you trade $150,000 in a 30 day period.
Alternative ways to buy bitcoins
Local Bitcoin
Exchange is not the only way to invest in bitcoins. Local Bitcoins are often used to buy BTC offline. The site is designed to connect potential buyers and sellers. Bitcoins are treasury from the seller in escrow and can only be released to buyers.
Buying bitcoins offline is not always very reliable or secure. Hence, it’s best to meet the vendors during the day and let a friend check in with you just in case things go south.
Bitcoin is not just a recent trend. Venture capital firms consider bitcoin a viable alternative to traditional currency in the long run. There are easy ways to get into the bitcoin investment business. As mentioned before, Coinbase, BitStamp, and Local Bitcoins are the most popular channels to invest in Bitcoin in the US. Do your homework and find the route that suits you best.