Bitcoin has become one of the most unbelievable money-making mediums of investors in the 21st century. It is currently the epitome of the investment market and harnesses the power of increasing its value multiple times in the future. This is why many new investors are trying their hand on this particular cryptocurrency.
It is the best-known digital currency among users currently. Moreover, not only it is the first-ever digital token but also the most traded and popular cryptocurrency. In fact, its market cap lies above $615.8 billion, which is higher than most of the countries’ GDP like Poland, Norway, Hong Kong, Sweden, etc.
But the investor must have proper knowledge of the field since the form is highly volatile. It means it contains the risk of losing your entire investment overnight. So, you must know about this cryptocurrency before you invest.
What Exactly is Bitcoin?
Bitcoin is a digital currency that has no physical presence and it is free of the control of financial institutions, government, and regulatory bodies. Also, the buyers, owners, and sellers involved in a transaction are kept anonymous. Not to mention there are no social codes, account numbers, or names assigned to the bitcoin owners and you can make your online transactions with bitcoin.
Instead, it runs on the technology based on blockchain and has encryption keys to connect sellers to buyers. Also, similar to the case of gold and diamond, bitcoin is mined by cryptographers or miners.
How to Buy Bitcoin?
There is an assigned destination for buying bitcoin, and that is bitcoin exchange. Here, people have to create their accounts and set up a payment method. If it is a reputable exchange, it will even ask you about your bank details, debit, or credit card details. Also, a passport or driver’s license will be required as ID proof. After the verification, you can deal in Bitcoin using the chosen mode of payment and store it in your digital wallet. There are also apps available for buying bitcoin like the bitcoinx making the process even easy.
How is Bitcoin Created?
The process of bitcoin creation is carried through mining. In other words, mining is the heart of the bitcoin network.
To send bitcoin, you need to create a transaction using your private key. Later, it gets broadcasted to the network from where the work of a miner starts.
Miners are the ones who receive the transaction, validate and verify it before transferring the coins into the block. Afterward, they broadcast it to the public ledger. All transactions made on cryptocurrencies are stored in a public ledger and it is a transparent process.
Bitcoin became famous from the year 2013 when its price was just $135. After four years, the token delivered about 50x returns to their investors. But for the next three years, it started working on consolidation and reached a value of $6000 in March 2020.
However, as per the data collected concerning bitcoin, the investors dealing in it experienced 500 times return on it since 2013 when only a small number of users were dealing in it. Speaking in monetary terms, the investment of $133 in 2013 became $66,000 during the peak time. However, the net return on investment is 25 times, and investment of $133 stands at $33000.
But if you see the return on investment made from the start, i.e., $133 in 2009, it has crossed $42lac. So investment in Bitcoin can give you the best returns, but you need to consider it as a long-term investment.
Also Read: Best Bitcoin Wallets in 2021
Is Sending Bitcoin Safe?
Bitcoin transactions carried digitally are completely secured thanks to the encrypted system. The digital wallet holder first signs the transaction then broadcasts it to the internet.
Not to mention it is quick and safe to transact, which gives assurance to people to make such transactions digitally on cryptocurrencies. Moreover, for carrying the transaction, one needs only an internet connection. However, make sure you are making the right decision when dealing with cryptocurrency as they are highly volatile and need in-depth market knowledge.