In recent days we have not stopped hearing about bitcoins here and there. Some headlines in the press say that many people have earned a fortune by investing in bitcoins. The price of bitcoin has broken records, etc.
Many readers have asked me about this topic and especially want to know how to investing in bitcoins and earn money. So I’m going to tell you the key points of bitcoin by answering the questions above.
The bitcoin is a cryptocurrency, or more commonly known as virtual currency. Its main characteristics:
- It is a virtual currency that is supported by “blockchain” technology.
- Bitcoin is a decentralized virtual currency, that is, it is not backed or regulated by any government or central bank.
- It was launched in 2009 by Satoshi Nakamoto (it is unknown if it is a person or group of people).
- Transactions are made on the Internet because it is an intangible currency.
- The bitcoin code is open.
- It has a high volatility.
How are cryptocurrencies created?
Unlike the traditional money we know: bills or coins, which is the state who prints the amount needed for a country; cryptocurrencies use cryptography to control their creation. That is, these coins are going to be discovered.
To discover these coins, high-powered computers called miners or miners are used, when they solve a complex mathematical problem they will receive bitcoins as a reward. This system allows generating a certain number of bitcoins per unit of time.
Currently, 12.5 bitcoins are issued every ten minutes. A total of 21 million units has been set as the maximum creation amount.
I do not want to get into technicalities to not confuse you. But what I’m telling you here is a pretty light version to give you an idea of how bitcoins are created. Below I leave you a video with a clearer and at the same time simple explanation of this procedure.
What is its price?
The price of bitcoin will depend basically on the trust that people give to this asset, taking into account that the offer is limited.
Being a digital currency, its price can be known through specialized portals in the bitcoin trade. Your quotation varies according to the demand and the registered offer, but it is also possible to know your quote in real time.
The price of bitcoin this year has gone from 700 to over $ 11,000 in the last week, this means an accumulated rise of more than 1,000%.
How can a bitcoin be used?
Bitcoins can be used to pay for products or services in a limited (minimum) number of stores.
These payments are made through mobile or computer applications. Simply enter the address of the recipient’s bitcoin account and accept the transaction.
How to invest in bitcoins?
This investment has a high risk, in the same way, that you can make money quickly so you can lose it too.
You have also wondered how to invest in bitcoins. There are two ways:
Simple: practically anyone can do it. You only have to open an account in an online exchange house (what is called a wallet or wallet) and choose the cryptocurrency in which you want to invest. You will be charged a commission and the proceeds will be paid directly to your PayPal account or credit card.
Complex: carried out by professionals.
Is it safe to investing in bitcoins?
Investing in bitcoins is very risky. While it is true that in the last year has beaten the record of revaluation, this does not mean that it is safe to invest in bitcoins, and less when we talk about the savings of our lives.
Both bitcoin and other virtual currencies are not yet fully consolidated as a means of payment. Very few businesses accept them as a means of payment, so their use is limited. And the regulation on the profits obtained by investing in bitcoins is still to be seen.So far these gains are not declared, but what will happen if it is considered as an increase in undeclared equity? The fines will also be high, and will they be considered as an asset in Spain or abroad? You are and others will have to resolve the governments.
Check This Out: The 10 Common Beginner Mistakes When Starting to Invest
To make everything clearer
If you are still not familiar with bitcoin, here I share a video where they explain clearly what Bitcoin is and how it works? This video has been created by Magic Market.
You should also know:
- From the beginning, it was established that no more than 21 million bitcoins would be made.
- The price of bitcoin is governed solely by the law of supply and demand.
- Many experts talk about a new economic bubble, however, others say that in 2019 the virtual currencies will be fully settled.
- As for its security, warns about the possibility of computer attacks to the exchange offices or theft of the code to any user.
- Regarding its regulation, some countries are limiting its use. However, USA, UK and other countries of the European Union are considered legal to pay with bitcoins.
If you are thinking of investing in bitcoins, remember that it is a very risky investment and therefore my advice is that you should only invest the amount of money you are willing to lose. Because in the same way that your price goes up you can go down, and maybe you lose everything. There are defenders of this virtual currency, but also detractors who even claim that it is the new economic bubble and even compare it with the crisis of the tulips of Holland of the seventeenth century.
Before investing your money in bitcoins or in other cryptocurrencies or in another type of investment, research, read and shape your own opinion and your own strategy, and never risk all your savings.