What is Bitcoin? By now you probably seen it everywhere. The reviews, you may wonder about the legitimacy of Bitcoin; and, when you think of the investment you would have had if you had invested years ago. There is no doubt that Bitcoin is controversial; and, there is no doubt of how an intangible item doubled, tripled, quadrupled, and more in value over such a short period. It is exciting to some, especially those that purchased Bitcoin early when it was mere pennies a coin, and now worth hundreds of dollars. But what is it? Is it a risky investment for today? Is there profit still to be made? Let’s have a closer look at what is Bitcoin.
What Is Bitcoin?
It's not play money; it’s real currency, but not exactly in the real world. It is money for the virtual world, and worth quite a penny. Bitcoin is a virtual currency that was created in 2009 by an unknown individual and started with a price of just pennies a coin. So, how much is it worth today? Grant Sabatier of Millennial Money invested $5000 in Bitcoin in 2013, and his investment is now worth over one million dollars. That would make Bitcoin worth $200 a coin; but, some reports are claiming the coins are worth $600 today, or being exact $568, so Grant sold low. One thing is for sure; the virtual currency is making record highs as an investment.
Bitcoin is virtual money that allows users to go about their business online, but without having the inconvenience or risk of having to deal with credit cards or their personal information. The currency is not controlled by a central authority such as the Federal Reserve. There are no banks involved. They aren’t coins- there is no penny you can pick up and rub your warts on and toss, hoping that someone will find the penny and pick it up so that luck will have it, your warts will be gone. They are online only, not a material thing like a penny with its old wives’ tale, a quarter, or a dollar. They are only in your e-wallet; another virtual convenience of today’s technology without the FDIC, so you won’t have the protection if your e-wallet is hacked as you would if the bank you stored your money is was robbed. As you can see, you can only use them online. Wait! We didn’t fast-forward. Bitcoin is a virtual currency. There is no place to spend it but through the virtual world. But, this little creation that has yielded quite a profit for many investors has gone into the real world, only not in the sense where you will open your wallet at a department store and pull out your coins to pay for that shirt you’ve been admiring in the window. In the real world, you visit a Bitcoin ATM where you can exchange your Bitcoins for cash. That is quite an advancement for an unknown creator that goes by the alias of Satoshi Nakamot. That is the founder of Bitcoin; but, that founder is unknown as that is simply an alias, so we’ll call him unknown. As for the Bitcoin ATM, still fast forward as the coin has advanced into the future like nothing else, but the ATMs are not exactly ATMs. You’ll see them in the real world, but they are an internet machine and not an ATM in the traditional sense. They are kiosks with machines connected to the Internet. They are not connected to a bank but connect users directly to a Bitcoin exchange. They have their transaction fees which reach as high as 7 percent and exchange rates, but you can convert those Bitcoins into cash!
How Do I Get My Hands on Some Bitcoins?
Likely you are ready to find out more about them, like investing in one or two. There is plenty of research for you left to do before you purchase a Bitcoin or two, but for the sake of fun, let’s fast forward a bit and think about those Bitcoins that would be yours. Bitcoins are mined through the market. These Bitcoins are deep beneath a complex encrypted computer program. Top coders are working night and day to solve the complex mathematical problem for new coins to be released. The inventor obviously was a wise man as you won’t see them printing money to sustain a budget. No, no; they must be mined by the world’s best geniuses, or, i.e., educated in that field of computer tech science, maybe mystery solvers, maybe just a knack for cracking things.
As for today, the inventor allowed the thrill of some being easily mined, and for the ones hidden deep beneath the coding, it will take a great deal of computer power. Maybe that is what China is after with their world’s largest battery creation; now, that would be a pat on the back for this genius unknown creator. More to the point, many hackers have taken over just the ordinary guy and gals’ computers to harness their power so that they can mine for bitcoins.
With the design of the system, as time goes on, more work is required to get coins which is how the currency's growth rate increases. This is the design for its inflation and is to be considered steady and predictable.
What is Bitcoin? Think of it like Willy Wonka’s golden tickets. There may have only been four, but with those four tickets, dreams could come true. There are about 11 million Bitcoins that have been mined. That sounds like a lot, right? It is, but not when you consider you have the entire virtual world, every nation to spend in, every nation in the world is accepting these Bitcoins, and the inflation rate that is taking pennies to hundreds, and hundreds to thousands, and thousands to millions, it is incredible. In total, there are 21 million Bitcoins in existence, so there are 10 million Bitcoins to be mined. Let’s fast forward a bit more, and assume that you now have a few Bitcoins in your e-wallet, and are ready to start your spending spree.
How Do I Buy and Spent Bitcoins?
In the virtual world, you can use Bitcoins to purchase any online purchase that requires a currency; that is, provided that you are shopping at a business that accepts Bitcoins, and many do not. The first glitch you may think, so why would anyone want to invest in something that controls even where you shop? Well, you can shop anonymously; perhaps that rated X store that you’ve been dying to send away for that new gadget or gizmo but you don’t want to risk your name being known. Well, here’s your chance. That is, provided that that store accepts Bitcoin. If they do, you are nothing but an anonymous shopper. Which, brings us to where else the money is being used. Unfortunately, Bitcoin is popular with drug dealers. Your first thought might be how the heck is drug dealers getting away with selling on the Internet. They, too, have online stores, and with Bitcoins being untraceable, drug dealers use them to facilitate transactions, until the FBI catches up with them. Your picture of Bitcoins may be fading a bit. It is disappointing; but, for some that tremendous investment is something they cannot get off their minds. And, the investment is real as long as Bitcoins remain legal.
There is no telling how long that will be. Computers are being hacked to use for power for tech gurus and junkies alike to mine Bitcoins, just as the legitimate high tech genius’ that are are mining for coins. Then, there is another downside. Bitcoins are being used for drug deals, an underworld of criminals, thefts, and danger. Homeland Security is becoming involved and is to be asked by a bitcoin lawyer to “chart a safe and sane regulatory course” for the virtual currency, without limiting its economic potential. On the one hand, it could seem like the present day Bonnie and Clyde, or maybe something like that, but only in the virtual world. You have to wonder with the approach to Homeland Security by Bitcoin lawyers. And, you have to wonder if there is a virtual chase with Homeland Security, the Bitcoin Miners, and of course, the Hackers. The excitement could get so great that it could end up that all involved are hackers to some degree. But, that is not the case, but obviously, it is of great interest, even to the security protecting the US. Then, you wonder if the politicians that are involved. This is a currency where there is no recognition to the users, which is the attraction for drug Lords. Then, there are Bitcoin lawyers. Real lawyers, just no “real” creator. Well, that’s a little confusing in itself. We have an alias, a name, an unknown. But, this fellow has lawyers that meet with Homeland, and while he may have some druggies and Lord only knows what else following his high tech invention, he also has users from the ordinary investors and consumers to high powered politicians; or, is it that the coins are becoming political? Let me brush up a bit. Okay, there is general counsel for the Bitcoin Foundation, and he believes that Bitcoins are essential for the development of economies and to develop democracies. Money can be spent on political acts that politicians may not otherwise be able to get through the platforms as some governments might find the acts a threat to human kind or just unethical. As for the politicians. Yes, some politicians support Bitcoin. Does that make them bad politicians? Well, I suppose if we had connections with Homeland Security we might have a little more insight. But, we don’t. These little coins attract everything from the drug community to government politicians with some politicians accepting the currency, and have even accepted Bitcoin donations during their campaigning. And, like a real currency that is in every nation in the world, so is Bitcoin. So, let’s not go overboard on thinking that there is a taboo associated with the currency. The currency allows users to be anonymous; it attracts Hackers and the everyday individual that wants to strike gold, as well as politicians. Being able to facilitate private and anonymous transactions with no control could be an attraction to many underhanded individuals; and, then there is the sheer thrill of something new, and an investment that is known to be a true investment, and a legitimate investment; that is, as long as Bitcoin remains legal. As for its inventor, he’s interest to many. What’s his real name, and where did he go, and why? Maybe we should try to find out a little more about this guy. After all, isn’t he sitting on a fortune in some way?
Who Is This Unknown Inventor?
Well, we know that he went by the alias of Satoshi Nakamot. Maybe, he’s a Roger Moore. But, things aren’t that exciting; or, maybe they are. Satoshi Nakamot is said to be a Japanese programmer that outlined the process in an academic paper. The interesting part is that he disappeared shortly after the first Bitcoins were released in 2009. Now, the really interesting part. He was a scholar, and some claim that by the English used in some of those papers that Satoshi Nakamot is an American. He’s left the majority of the public running in circles. We don’t know who he is and question his nationality, and for his whereabouts, nobody knows. He’s built something that is a pot of gold and designed to go up in value but also opened up quite a bit of corruption. Still, in all, why did he disappear? Is there some surprise ending when the last Bitcoin is mined like a nuclear blast or something? We could run in circles, or just accept that this guy was a genius and offered many intelligent minds a great challenge, and many individuals from every walk of life a profitable investment.
Is Bitcoin a Good Investment
There is no doubt that so far Bitcoin has proven to be a good investment. You could have purchased coins in 2009 – 2010 for about eight cents a coin, and resold those coins today for nearly $600 a coin. That is quite an investment. Bitcoin is not a currency that you simply print more of when you run short. There is a limited number of the coins. Eleven million coins have been mined, leaving 10 million left to mine; and the complexity of getting to those coins would lead most people to tear out their hair.
Bitcoin has its magazine, its lawyers, a CEO, and many people that are making a living off of this company that’s creator disappeared. That is a bit different. It is a controversial currency and one that the users want to keep. As for the authorities, I am not sure where they stand. Obviously, they are getting involved. After all, computers are being hacked for power. Many countries are thinking of regulations for the currency. In the US, Bitcoin lawyers are approaching Homeland Security, so obviously, there is interest in the currency among authorities and governments. Top investors are saying that investing up to 10 percent of your savings in high-risk investments is okay. High-risk investments include Bitcoin. There is always the factor of the “right time to invest.” Is now a good time to invest in Bitcoin? It seems as though it is only going up, and appears to be unstoppable as it continues to rise in the stock market. It is an investment that is high risk, and the choice is one that should be made with great research and knowledge.
How Do I Acquire Bitcoins?
Bitcoin is a virtual currency, and if you aren’t a miner, then you’ll have to visit an online marketplace called “Bitcoin Exchanges.” These exchanges are designed to allow people to buy and sell Bitcoins that have been mined, buying them in different currencies. A few of the exchanges include Coinbase, Bitstamp, and Bitfinex. While these are exchanges on the net, they aren’t without risk. There is no protection of your investment if the exchanges are hacked.
With today’s mobile apps, Bitcoin owners can also send coins to recipients over their apps, such as a digital transaction of sending cash over a mobile app.
Bitcoin is exciting with plenty of mystery involved. There are actual competitions where individuals compete to “mine” Bitcoins. To mine a Bitcoin, the most complex math equations must be solved. As more Bitcoins are mined, the harder the mathematical equations get. The competition as it stands today awards a winner with 12.5 Bitcoins every 10 minutes. As for the Bitcoin ownership; it costs to own the currency if you aren’t mining your Bitcoins. You will have a digital or e-wallet which is much like a bank account, only in the virtual world and with money that is only good in the virtual world; unless visiting a kiosk where you can exchange Bitcoins for cash, or exchanging your Bitcoins through an online exchange. Bitcoins are considered a high-risk investment. And, with anything on the computer, there is always the risk that it will be hacked; making e-wallets vulnerable and a temptation to hackers. Bitcoins allow users to conceal their identities. You purchase the Bitcoins using an ID, not your name or personal information, which is one reason the currency has attracted so many in the underworld.
There is no telling when Bitcoin may begin to be regulated or to become illegal. In some countries like Australia, they are weighing regulations. As for now, Bitcoins are legal, and an investment that has shown to be profitable, but one that is considered a high-risk investment.
Bitcoin value is not the same as its price. The price of Bitcoin is determined by the supply and demand of the market in which it trades. As of now, it is said that Bitcoins are worth about $600 per coin, but people are buying them for as much as $2000 and higher, showing that buyers are paying for the future inflation of the purchase of their coins.
So what is Bitcoin?
Bitcoin is a limited currency with only 21 million Bitcoins that can be mined. There is no telling why only 21 million Bitcoins, but Bitcoin is designed with an eight decimal fraction system, with 21 million BTC.If you are amped on getting your hands on Bitcoins, but don’t have the knowledge to mine, and don’t have the funds to purchase Bitcoins, there may be different options, such as working for Bitcoins, offering something in exchange for Bitcoins, casino games, and trading. Just remember that with Bitcoins, the investment is a high-risk investment because there is no safety net. If your wallet is hacked, you have no recourse. They are gone, and you are at a loss. You will hear about others like Litcoin or Ripple. Keep an eye out.
Blockchain vs. Bitcoin
The biggest myth about What is bitcoin is you don't have to BUY an entire Bitcoin. Yes, You can buy 1/2, 1/3 or say $200's worth of Bitcoin.
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