Bitcoin
Bitcoin is a digital currency created in January 2009 following the housing market crash. It follows the ideas set out in a whitepaper by the mysterious and pseudonymous Satoshi Nakamoto.
The identity of the person or persons who created the technology is still a mystery. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies.
There are no
physical bitcoins. Bitcoins are not issued or backed by any banks or
governments, nor are individual bitcoins valuable as a commodity. Despite it
not being legal tender , Bitcoin charts high on
popularity, and has triggered the launch of hundreds of other virtual
currencies collectively referred to as Altcoins.
Bitcoin is a collection of computers, or nodes, that all run Bitcoin's code and store its blockchain . A blockchain can be thought of as a collection of blocks. In each block is a collection of transactions.
For more than a decade, bitcoin has been a huge success story.
How Bitcoin Began
Oct. 31, 2008: A person or group using the name Satoshi Nakamoto makes an announcement on The Cryptography Mailing list at metzdowd.com:
"I've been working on a new electronic cash system that's fully peer-to-peer, with no trusted third party.
Jan. 3, 2009: The first Bitcoin block is mined
Jan. 8, 2009: The first version of the Bitcoin software is announced on The Cryptography Mailing list.
Jan. 9, 2009: Block 1 is mined, and Bitcoin mining commences in earnest.
How Bitcoin Works
Bitcoin is one of the first digital currencies to use peer-to-peer technology to facilitate instant payments.
The independent individuals and companies who own the governing computing power and participate in the Bitcoin network, are comprised of nodes or miners.
"Miners", or the people who process the transactions on the blockchain, are motivated by rewards (the release of new bitcoin) and transaction fees paid in bitcoin.
These miners can be thought of as the decentralized authority enforcing the credibility of the Bitcoin network.
As of July 2020, there are roughly 3 million bitcoins which have yet to be mined.3
Bitcoin mining is the process by which bitcoins are released into circulation. Generally, mining requires the solving of computationally difficult puzzles in order to discover a new block , which is added to the blockchain.
One bitcoin is divisible to eight decimal places (100 millionths of one bitcoin), and this smallest unit is referred to as a Satoshi.
Bitcoin Investment: A Guide To Trade Bitcoin
Before you can start bitcoin investment, you should look at the following things:
Trading devices: A trading device can be anything from a laptop, a personal computer to a smartphone or a tablet.
A strong internet connection: You cannot invest in bitcoin without a strong internet connection, you also need a strong internet connection to monitor market movements, price changes, as well as monitor your investment portfolio.
Trading account: A bitcoin trading account is your first point of call to start trading in bitcoin. A trading account will hold your initial deposit, from where you will buy/sell bitcoin to make a profit.
Bitcoin wallet: Another requirement is to have a bitcoin wallet. A digital wallet is used to store your private keys.
Starting Capital: Finally, you need a starting capital. The minimum amount required to start investing in bitcoin varies from one exchange to another.
So, before you pick an exchange, ensure you find out the minimum deposit that investors must maintain to be allowed to operate a trading account. For some exchanges, you can start trading with as low as $50.
Three BTC Investing Strategies
Buy & Forget
Perhaps the simplest strategy is to buy BTC and keep it as an investment for a long time.
This strategy involves long-term investments- for example, BTC – in anticipation of the price increase in the coming years
Even when buying Bitcoin for a long time, it is crucial to choose the right moment. The following strategy – averaging – can help to find the right moment.
Averaging
Therefore, some investors use the averaging strategy: the
user splits their capital into several parts and buys Bitcoin with them over
time.
Thus, if the price of an asset drops, they can use this as an opportunity and buy more coins.
In this case, the average BTC purchase price will decrease. Each user can decide for himself how many parts he will divide the capital
Diversification
You can invest in other coins, too, you know? By dividing your capital between BTC and other cryptocurrencies, higher returns can be generated.
As such, another smart way to diversify your investment portfolio is to add other asset classes, apart from cryptocurrencies.
Bitcoin important forecast for 2021
The most important point in predicting the future of digital currency is its independence from governments, which makes it more difficult to predict the future of cryptocurrencies than other financial markets.
Bitcoin has a good future all over the world, Bitcoin has established its reputation as "digital gold" during 2020, Bitcoin price has increased by more than 300% in the last 12 months
2021 will be a great year for digital currencies and gold, according to Frank Holmes, CEO of Global Investors USA.
Considering the Hawking Bitcoin event in May 2020, which halved the supply by halving the bitcoin mining bonus, it can be concluded that the demand for this digital currency has exceeded the demand. The special of 2021 will continue
Bitcoin could quadruple in 2021 as the digital currency sees a rally similar to 2017, Fundstrat's Tom Lee says
Bitcoin's near 300% surge in 2020 could be followed up by an even stronger performance in 2021, according to Fundstrat's Tom Lee
Fundstrat's digital asset strategist David Grider also raised his outlook for bitcoin in a note, expecting the crypto asset to hit at least $40,000 next year.
Paolo Ardoino, chief technology officer at Hong Kong-based and British Virgin Islands-registered cryptocurrency exchange Bitfinex, said in emailed comments.
in December, insurance gaint MassMutual unveiled a $100 million investment in bitcoin for its general investment account
PayPal continues to buy up bitcoin to support the launch of the capability to buy, sell and trade cryptocurrency from a PayPal account.
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