So, you have seen bitcoin on the news and in headlines. Maybe you have heard your friends talking about investing, maybe they have already either made a nice profit or are complaining about the current decline.
Common questions for people new to cryptocurrency are how do you even buy this? How does this even work? Why is it different than a paper currency? Where does it come from?
These are all valid questions. And we are here to help answer them. These are the ins and outs of bitcoin.
Where Do Bitcoins Come From?
Bitcoins are made by a process called “mining.” This is done with very advanced computer software.
The simple explanation is miners solve very complicated mathematical equations and if they can solve the right ones, they are rewarded with bitcoins.
There is a more thorough breakdown of mining but the main takeaways are the equations, plus having the right mining hardware and software. There are only a finite number of bitcoins available to be mined.
Buying and Trading
Like stocks, cryptocurrencies like bitcoin can be purchased. Bitcoin has a big price tag, however, at over $30,000 a coin.
No need to fear. You have the ability to purchase fractions of a coin. Say you only wanted to purchase $300 worth of bitcoin or about 1% of a current coin. Most crypto markets will let you do that.
Speaking of that, there are some notable names out there where you can pursue bitcoin trading and buying. These include but are not limited to Coinbase, Robinhood, eToro, and more.
For you Canadians, this page provides you with information on how to buy bitcoin through an over-the-counter trading desk.
Then, of course, there are bitcoin ATMs. There are thousands of these scattered all over the world. Unlike a regular ATM, these actually let you buy bitcoin out on the street.
Current Price and Patterns
Right now, the value of a bitcoin is just under $30,000. There has been a steady decline the last three months, with it being worth less than half of what it was worth in the middle of April (as high as $63,500).
A big thing to know about bitcoin is that its value is extremely volatile. Right before the pandemic, bitcoin’s value went from about $10,000 to just under $6,000 in about a month.
From December 2017 to March 2019, bitcoin’s value went from around $19,000 all the way down to under $4,000.
It is safe to say that bitcoin’s value can change at any time. You need to be prepared for the worst but can hope for the best.
Invest in Bitcoin
The volatility of the price could definitely scare someone new to bitcoin away. It is not easy to potentially see thousands of dollars slip away.
However, with both of the big declines noted, bitcoin came back stronger than ever. Its value is less than half of what it was three months ago, but you could find yourself benefiting from the next big boom.
So, now that you have seen some of the ins and outs, are you in? For more advice on investing, be sure to browse the rest of this site.
Hemant Kumar is a project manager at Tridindia with more than nine years of commendable experience in writing about LMS, translation, and IT. His unmatched talent and passion for digital marketing gave him the opportunity to work as a multi-tasking project manager at TridIndia’s sister company, Link Building Corp. Today, he contributes to the world by imparting knowledge on SEO, link building and internet marketing etc., that helps business owners grow their online business.