What is Bitcoin?
Bitcoin is a decentralized peer-to-peer digital currency system designed to enable online users to process transactions using a digital unit of exchange known as bitcoins. In other words, it is virtual currency.
The Bitcoin system was created in 2009 by an unknown programmer. Since then, Bitcoin has attracted a lot of attention and controversy as an alternative to the US dollar, euro and commodity currencies such as gold and silver.
Bitcoin didn’t get much attention in the world of business and finance until 2009. It rose to prominence in the period 2011-2012 when it grew by over 300%. Bitcoin is up 400% in value since last August. As a result, venture capital firms and investors around the world continue to focus on cryptocurrency.
In the first half of 2014, venture capital firms invested $ 57 million in bitcoin in the first quarter, and another $ 73 million in the second quarter for a total of $ 130 million, up 50% from last year’s $ 88 million. This is the exact opposite of the 2012 scenario, where bitcoin companies amassed a relatively small amount of $ 2.2 million.
These statistics prove beyond any doubt that Bitcoin is worth your investment, so the question arises: How can you buy and invest in Bitcoin?
A Beginner’s Guide to Bitcoin Investors
The easiest and least difficult way to invest in bitcoins is to buy bitcoins. There are many well-known firms, mainly in the US and abroad, that buy and sell bitcoins, or BTC for short.
If you live in the US, then Coinbase is the place you are looking for. Coinbase provides its customers with BTC at an estimated 1% markup 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 go through seamlessly. This company also gives you the option to automatically buy bitcoins from time to time. For example, if you want to buy $ 50 worth of bitcoins at the beginning of each month, Coinbase allows you to set up an automatic purchase for that amount.
Please read the terms and conditions carefully before you start using this service. If you’ve signed up for an automated Bitcoin service, you won’t be able to control the price at which BTC is bought every month. Please note that Coinbase does not work as a bitcoin exchange i.e. you buy and sell coins directly from the firm. Since the firm must receive coins from other buyers, you may experience delays or disruptions in placing orders during fast market movements.
BitStamp meets the requirements of the regular bitcoin exchange. Bitcoin acts as an intermediary that allows you to trade with other users and not with the company itself. Liquidity is higher here and you always have a good chance of finding someone who wants to trade with you. There is an initial commission of 0.5%, which can be reduced to 0.2% if you trade $ 150,000 for 30 days.
Alternative ways to buy bitcoin
Exchange is not the only way to invest in bitcoin. Local bitcoins are often used to buy bitcoins offline. The site is designed to connect potential buyers and sellers. Bitcoins are held by the seller in escrow and can only be transferred to buyers.
Buying bitcoin offline is not always very reliable and secure. Hence, it is preferable to meet with salespeople during the daytime and let a friend join you in case things go wrong.
Bitcoin is not just a modern trend. Venture capital firms see Bitcoin as a decent replacement for conventional currency in the long run. There are quiet ways to get into the bitcoin investment realm. As previously mentioned, Coinbase, BitStamp and Local Bitcoins are the most popular channels for investing in bitcoins in the US. Do your homework and figure out which path you like best.