Bitcoin has been the hot topic for nearly a decade now, and many investors and interested individuals regularly follow the cryptocurrency’s updates. However, for many, the concept of Bitcoin still seems like an unsolvable puzzle.
What is it? How does it work? What are its benefits? Continue reading our guide on Bitcoin to discover all about the market-leading cryptocurrency. We’ll go over how Bitcoin works, what Bitcoin mining is, how you can invest in the cryptocurrency, and many other useful facts.
What is Bitcoin? – A Quick Overview
Bitcoin is one of the first digital currencies to come into existence and was founded by an anonymous individual known as Satoshi Nakamoto. The cryptocurrency has gained immense popularity over the last decade and is still recognised as the market-leading crypto amongst thousands of digital currencies that have emerged.
The genius individual behind the digital currency used blockchain technology to create a virtual currency that is decentralised, secure, and limited in supply. This means that the virtual currency is not tied to any entity such as a bank or the government. Instead, it’s simply reliant on a digital ledger or blockchain to sustain its value.
In order to gain Bitcoin, you must mine it by solving mathematical equations and spending a considerate amount of computing power. However, since mining is a time-consuming and costly process, most people nowadays prefer to purchase Bitcoin through crypto exchange platforms. These platforms connect Bitcoin buyers and sellers and offer crypto wallets where users can store their bitcoins.
How Bitcoin Obtains its Value
The million-dollar question is, ‘if Bitcoin doesn’t have intrinsic value, what gives it value, to begin with?’ Like other currencies, the value of a digital currency depends on the scale of community involvement—for instance, the scarcity of the virtual currency, its demand in the market, and its utility. However, since Bitcoin’s inauguration back in 2009, speculative interest has primarily driven its price.
In simpler words, Bitcoin’s value is entirely dependent on its acceptability and demand in society. As people continue to accept cryptocurrency as a valid form of payment and as a good investment – its price will continue to rise. Although, this makes Bitcoin, along with other digital currencies, highly volatile in nature. Some investors enjoy this volatility as it offers excellent investment opportunities, whereas those who lack the right platform and knowledge might end up in loss.
How Bitcoin Escapes Inflation
You’re probably wondering how Bitcoin doesn’t undergo inflation, especially since the cryptocurrency is decentralised. Interestingly enough, the digital currency undergoes crypto halving roughly every four years, in which its supply is cut down by 50%, and demand in return increases. On top of that, there are a total of 21 million Bitcoins that can be mined altogether, and research shows that this will be done by the year 2140.
This not only avoids inflation but also increases Bitcoin’s value as its supply decreases. The halving process has also continuously attracted investors, as they suspect the digital coin to rise in value shortly after its halving. This, in return, attracts more people to invest in crypto, leading to a further increase in demand alongside shortened supply.
What Happens to Bitcoin After All 21 Million Are Mined?
Bitcoin has a stipulation that limits its supply to a finite or limited number. Surprisingly, studies show that nearly 97% of all Bitcoins will have been mined a decade from now. This naturally raises a concern – ‘What will happen after that?’.
The common conception is that once all Bitcoins have been mined, they’ll simply be rotated in the market. The revenue of miners will depend on transaction fees, and the price of the digital coin will adjust based on its quantity. Plus, the limited supply of the market-leading crypto is likely to make it even higher in demand.
On the contrary, it’s also suggested that the mining process for Bitcoin or the bitcoin network altogether will have massively changed by the year 2140. Though only time will tell what direction the digital currency will take.
How You Can Invest in Bitcoin
With Bitcoin being the hot topic of the decade, everyone wants to invest their money in the digital currency and test their luck. Luckily, this can now be done through crypto exchange platforms. With time, more and more crypto exchange platforms have emerged, which make buying and selling cryptocurrencies seem like a piece of cake.
The first thing you’d want to do is carry out research and hunt down a reliable crypto exchange. You can then sign up for a demo account, if they offer one, and explore their features and tools. Once you’re familiar with the platform, you can add money to your trading account and start buying or selling cryptocurrencies with the help of the tools offered. You can also look up crypto wallets where you can store your digital currencies securely.
Most reliable crypto trading platforms will offer analytics to help you make the right investments. Some may even offer trading signals to help you invest as a beginner. The key is to carry out proper research to ensure you choose the right platform for your investment journey.
Ever since Bitcoin’s inauguration back in 2009, it has been a subject of interest for a huge population. It was the first digital currency to come into existence, followed by which thousands of others emerged as well. Yet surprisingly, Bitcoin still remains the largest cryptocurrency to ever exist.
The cryptocurrency depends on blockchain technology, which secures it and handles its supply in the market. Also, the cryptocurrency sets itself free from the risk of inflation as it is limited in quantity and cuts down 50% in supply roughly every four years. This not only avoids inflation but also maintains the digital currency’s supply & demand in the market.
Luckily, Bitcoin can now be bought from the comfort of your home or you can loan it from exchanges. All you have to do is find the right crypto exchange or crypto trading platform and open an account with them. Though it’s best to look for platforms that offer demo account features as that allows you to familiarise yourself with the platform and its tools before investing any capital.
What You Need to Know About Bitcoin FAQ
✅ Is Bitcoin a good investment for beginners?
Bitcoin is known for being highly volatile, which is why it is considered a good investment. However, many people end up losing money as a result of this volatility. The key is to effectively utilise tools and strategies to ensure you can make the most out of the currency’s shifting prices. If you’re interested in investing in Bitcoin as a beginner, you can hop on to our website to read more about digital currency.
🔥 How is Bitcoin mining done?
While Bitcoin mining is a high-cost activity and demands lots of time and computing energy, buying bitcoin through a crypto trading platform is simple and easy. Thousands of crypto platforms offer crypto buying and selling services alongside additional tools and features to help you invest in the cryptocurrency easily.
😎 When was the first Bitcoin mined?
The first-ever Bitcoin was mined back in 2009 by the founder of the cryptocurrency who is referred to as Satoshi Nakamoto. Bitcoin initially started trading at 0.0008$ to 0.088$ and is now trading at nearly 40’000 pounds. Ever since its inauguration, many companies and famous investors have bought and held thousands of Bitcoins. Visit our website to learn more about the market-leading cryptocurrency.
😏 Can investing in Bitcoin make you rich?
Many people presume that the only way to obtain Bitcoin is through the mining process. However, now Bitcoin can easily be bought and sold through crypto trading platforms. This has changed the investment sector massively, with many people shifting their interests from the FX market and stock market to the crypto market. The new market attracted a huge number of investors and is continuing to grow every single day. You can read more about the possibilities the market-leading cryptocurrency offers by visiting our website.