What is Bitcoin


Bitcoin launched in 2009 the promise was that it would allow financial transactions on a peer to peer network without the need for any financial institutions or government control. A lot of people that knew about it at the time were very excited about the possibilities while others were somewhat skeptical.

The digital currency was actually a secondary consideration. It was the blockchain technology that so excited the creators and those that were part of the peer to peer community. But the Bitcoin currency has turned out to be a lot better than was expected. There are several reasons for its significant growth in popularity.



Should You Invest In Bitcoin Or Trade Bitcoin?

There are a number of stories about Bitcoin traders that have made a great deal of money on the back of the volatility of the digital currency. Some traders are able to make consistent profits most days with Bitcoin. So if you are just starting out with Bitcoin should you trade or go for longer term investment?

BitcoinTrading

If you are new to Bitcoin then it is not impossible for you to make trades to make regular profits. But this is not an easy thing to do. It takes a good deal of experience and you need to be mentally and financially ready. To make consistent profits from trading you need to buy low and sell high.

When you first start to trade Bitcoin it is natural for you to panic when prices change. Bitcoin is now very valuable and there can literally be thousands of dollars at stake. The more money that you are using the more likely you are to panic.

Learn how to Trade Bitcoin

We would never recommend that you just jump into Bitcoin trading. You need to learn everything that you can about it first. A number of the exchanges will provide you with a dummy account where you can practice. These accounts have real time prices like the real ones and if you make a mistake then you can learn from them.

It doesn’t matter if you blow all of the pretend money in a demo account. Just get another demo account and try again. But imagine this was real money you were trading with – it would be devastating to lose everything wouldn’t it?




Create a Trading Plan

The best Bitcoin traders have a plan. They have minimum buy prices and sell prices. They stick to this plan no matter what and never enter into emotional trades because they “feel right”. When you start trading Bitcoin forget about making a ton of money in a day. If you have this attitude you are more likely to make a lot of mistakes.

Never go all in on a trade. Just use small amounts of money to trade with until you develop the skills and experience that you need. It doesn’t matter how good an opportunity seems to be – just stick with small amounts when you are starting out.

BitcoinInvesting

The difference between Bitcoin investing and trading is the amount of time involved. With Bitcoin investing you are committing to the longer term which we believe is a smarter decision. When you invest over the longer term you are able to cover off the volatility of Bitcoin and have the best chance of a good return.

One of the best methods to use for Bitcoin investment is the dollar cost averaging method. The concept here is to invest smaller amounts regularly so that you can take advantage of price swings.

For example if you decide you can invest $100 a week then some weeks you will get more Bitcoins for your money and other weeks you will get less. Over a period of time this should always average out so that at the end of the investing period you have still made a reasonable return.

 

of Bitcoin which increases its value – similar to gold.



The Technology behind Bitcoin

Blockchain is the technology behind Bitcoin. This is a public ledger system which adds to a large chain of confirmed transactions which is where the name blockchain originated from. Anyone can see the entire blockchain for Bitcoin since it began in 2009. This is a lot of data and will grow even larger in the future.

With blockchain technology after verifying a financial transaction you cannot change it. It creates immutable records. This is excellent for security but not so good if you make a mistake with a Bitcoin transaction. There is no turning back after verification and confirmation.

Thousands of computers (nodes) in the blockchain network for Bitcoin validate it all of the time. This means that it is virtually impossible to hack a blockchain network as you would require more processing power than all of the computers that make up the network.



Bitcoin Scams And How To Avoid Them

The value of Bitcoins has risen significantly over the last few years so it is no surprise that there are scammers out there that want to steal Bitcoins or take your money for no return. Here we will discuss the most common Bitcoin scams and how you can avoid them.

The Fake Bitcoin Exchange

Buying and selling of Bitcoins is usually performed using a Bitcoin or cryptocurrency exchange. Some of the exchanges will allow you to purchase Bitcoins in your native fiat currency while others will allow you to use other cryptocurrencies to exchange for Bitcoins.

There are many cryptocurrency exchanges available and more joining the group all of the time. Not all of these exchanges are legitimate and some exist to steal your Bitcoins or your money – or both.

To all intents and purposes these exchanges look and feel like real ones. They will display the real time prices and have a trading platform. But they will just take your Bitcoins and siphon them off to their accounts or take your currency and never provide you with the Bitcoins you paid for.

Malware Scams

Malware is a small computer application that downloads onto your computer. Recently there has been cases of malware that have keyloggers detecting all of the keystrokes you make. These can discover your private keys for Bitcoin or your login details to a cryptocurrency exchange.

When this happens hackers will use this information to steal your Bitcoins. You can download malware without realizing it and the cyber criminals are getting better at this with each passing day. Never click on a website link that you don’t entirely trust.

Email Phishing

This is another popular scam. Thieves purchase domain names that are similar to the reputable exchanges. For example they might get their hands on Coinsbase.com rather than Coinbase.com.

They then send fake emails using these domain names and ask recipients to check their cryptocurrency accounts. They provide a link in the email which goes to their fake website. It looks exactly like the real login page of the legitimate exchange.

The user has to enter their login details which the hackers steal. Hackers can prevent the user from logging in to their real accounts and very quickly they divert any Bitcoins in their wallets to their accounts. You need to thoroughly check any link in an email that has supposedly come from your cryptocurrency exchange.




Bitcoin Doubling

You may have come across websites before that claim that they can double the amount of Bitcoins that you hold or provide you with a guaranteed return on your Bitcoins every day. Nobody has the power to double your Bitcoins and with the volatility of the digital currency guaranteed daily returns are impossible as well.

If you see any websites making these claims then stay well away from them. There only intention is to steal your Bitcoins. Sometimes they will pay out for a few days and then completely disappear along with your Bitcoins.

Bitcoin Cloud Mining

The thought of free money compels a lot of people to look into Bitcoin mining. It is very expensive to buy and run the computer equipment needed to do this on your own so lately cloud mining solutions have emerged where you can pay a company to do this for you.

There are some legitimate cloud mining services but there are scammers as well. It is not cheap to get involved with cloud mining and the scammers take your money and of course they do not perform any mining on your behalf.


Click here to know how to get bitcoin


WaysThat You Can Get Bitcoins

The only way to obtain Bitcoins when it first launched was to use the peer to peer network. You could do this anonymously and you didn’t need permission from anyone to acquire Bitcoins. With the growth in popularity of Bitcoin there are now several ways you can acquire them.

Cryptocurrency Exchanges

You can register with a cryptocurrency exchange like Coinbase.com and purchase Bitcoins using your native currency. Some countries do not allow the purchase of Bitcoins so you need to check this first.

When you sign up with a reputable exchange like Coinbase.com you will need to provide a number of personal details. This certainly includes your name and address and other financial information. This is to comply with the Know Your Customer (KYC) laws that exist in a lot of countries.

This defeats one of the key cornerstones of Bitcoin which is anonymity. The network was set up so that you could perform Bitcoin transactions without anyone knowing who you were or where you were from.

There are some cryptocurrency exchanges that allow you to use fiat currencies to purchase Bitcoins and there are others where you can only make purchases with cryptocurrencies. You need to check that an exchange provides the service that you need.

A cryptocurrency exchange charges a transaction fee for every purchase of Bitcoins. The good news is that these fees tend to be a lot lower than those charged by traditional financial institutions.




Bitcoin ATM

In the last few years Bitcoin ATM’s have emerged in North America and Western Europe. They are now in other countries too. Here you can use funds from your bank account or a credit card to purchase Bitcoins.

Most of the ATM’s will allow you to make transactions as well. So if you want to send Bitcoins to another person or receive them then you can do this. The rise in the number of Bitcoin ATM’s proves the growing popularity of the digital currency.

Work for Bitcoins

A lot of freelancers in different parts of the world like payment in Bitcoins. Employers like it too because sending Bitcoins is a lot cheaper than setting up a bank transfer to another country. It takes a lot less time to receive a Bitcoin payment than it does a bank transfer payment.

There are freelancing websites where you can receive payments in Bitcoin. One of the biggest freelancer websites, Fiverr.com, will pay you in Bitcoins if you want and so will other big sites such as Upwork.com, Freelancer.com, Guru.com and PeoplePerHour.com.

Complete Tasks for Bitcoins

These days you can join websites that require you to perform small tasks and receive Bitcoins as a reward. Some of these tasks include:

·         Watching videos

·         Completing surveys

·         Online shopping

·         Signing up to free trial offers

·         Playing online games

These tasks will take you a few minutes to complete and you will receive fractions of Bitcoins called Satoshi’s for doing this.

Sell Products and Services for Bitcoins

If you own a conventional brick and mortar store or an online store you can receive Bitcoins as a form of payment. In a brick and mortar store all you need to do is to print out the QR code for your wallet and then customers can use their smartphones to scan the code and pay you using Bitcoin.

With an online store there are a number of scripts and plugins available that create a Bitcoin payment gateway.