What is Bitcoin?
Bitcoin is a decentralized, equitable, digital currency system, designed to provide online users with the ability to process transactions through a digital exchange unit known as Bitcoins. In other words, it is a virtual currency.
The Bitcoin system was created in 2009 by an undiscovered developer. Since then, Bitcoin has attracted huge attention as well as controversy as an alternative to the US dollar, euros and commodity currencies such as gold and silver.
Rise to popularity
Bitcoin did not attract much attention in the world of business and finance before 2009. It rose to prominence in 2011-2012 when it gained over 300%. Bitcoin has had a 400% increase in value since August last year. As a result, venture capital companies and investors around the world continue to attach importance to cryptocurrencies.
In the first half of 2014, venture capital companies invested $ 57 million in Bitcoin in the first quarter, followed by another $ 73 million in the second quarter for a total of $ 130 million, 50% more than last year’s total of $ 88 million. This is the complete opposite of the 2012 scenario where Bitcoin companies raised a relatively modest sum of $ 2.2 million.
These statistics undoubtedly prove that Bitcoin is worth your investment, which begs the question, how can you buy and invest in Bitcoin?
A guide for beginner investors in Bitcoin
The easiest and least complicated way to invest in Bitcoin is to buy bitcoin. There are many established companies, mostly in the United States, as well as abroad, that deal with the purchase and sale of bitcoin, abbreviated BTC.
If you live in the US then Coinbase is the place you are looking for. Coinbase provides its customers with BTC at an estimated mark of 1% of the current market price. Residents of the United States have the option to synchronize their Coinbase wallets with their bank accounts. As a result, future payment transfers are no problem. This company also gives you the ability to automatically purchase bitcoin from time to time. For example, if you are interested in buying $ 50 in bitcoins at the beginning of each month, Coinbase allows you to set up an automatic purchase for that amount.
Please note the terms and conditions before using this service. If you have subscribed to the automated bitcoin service, then you will not be able to control the price at which BTC is purchased every month. Note that Coinbase does not function as a Bitcoin exchange, ie. you buy and sell coins directly from the company. Because the company has to procure coins from other customers, you may face delays or interruptions when placing orders during rapid market movements.
BitStamp meets the requirements of conventional bitcoin exchange. Bitcoin acts as an intermediary that allows you to trade with other users, not with the company itself. Liquidity is higher here and you always have a good chance of finding someone who is willing to trade with you. There is an initial fee of 0.5% that can be reduced to 0.2% if you trade from $ 150,000 over a 30-day period.
Alternative ways to buy Bitcoin
Exchange is not the only way to invest in bitcoin. Local Bitcoins are often used to buy BTC offline. The website is designed to connect potential buyers and sellers. Bitcoins are stored by the seller in escrow and can only be released to buyers.
Buying bitcoin offline is not always very reliable or secure. Therefore, it is better to meet with the sellers during the day and let a friend mark you in case things go south.
Bitcoin is not just a modern trend. Venture capital companies believe that Bitcoin is a decent replacement for the conventional currency in the long run. There are countless ways to enter the realm of investing in bitcoin. As already mentioned, Coinbase, BitStamp and Local Bitcoins are the most popular channels for investing in bitcoin in the United States. Do your homework and find out which avenue meets all your limits.