Bitcoin is a decentralized digital currency. But let’s not use complex terms. Decentralized simply means there is no single control or administrator. When talking about and dealing with currency, an administrator, in this case, would be a central bank. Currency by definition is any ‘money’ in use and circulation that acts as a medium of exchange. It’s a virtual currency that exists only in the digital world. It works on set guidelines in a whitepaper published under the pseudonym Satoshi Nakamoto back in January of 2009.
What exactly are bitcoins and cryptocurrency? A definition of terms.
Bitcoins have been classified as a cryptocurrency because they are secured and enabled by cryptography. Bitcoins are also supported by a technology known as the blockchain. Blockchain keeps a tamper-proof public record of all transactions of all bitcoins concurrently. This enables the creation of digital assets (like bitcoin) run on and maintained through complex computer networking software. The person(s) behind the technology is still unknown.
Why is investing a good idea?
Bitcoin is a very good investment in 2022. Many experienced financial analysts have pointed out that bitcoin, the leading cryptocurrency token, is the largest wealth creation event of the decade. The digital assets have increased in value by about 2000% since their inception. One bitcoin was worth nothing in 2009 but it has exploded in value in the last 5 years.
The crypto market is estimated to reach an all-time high in the years to come as indicators and general terms have shown. This explosion in popularity has also attracted scammers and fraudsters that is why it is important to learn how to invest in bitcoin. Many experts believe it is a matter of time before bitcoin hits $100,000, and this is the best time to invest to ride that wave.
How to invest in bitcoin
The first step to investing in bitcoin is deciding where to buy your bitcoin. There are many ways to buy bitcoins. Crypto beginners just learning how to invest in bitcoin will prefer centralized exchanges to start buying and selling from. Centralized exchanges are easy to use, requiring minimal technical knowledge. They also offer bitcoin at crypto market prices and make money charging fees on their services. They assure the buyer you are getting what you are paying for.
Centralized exchanges are however not secure. They are major targets for hackers due to the large volume of crypto that passes through them. For more advanced users there are decentralized exchange service providers. Decentralized platforms offer lower prices but can demand more technical know-how. They offer better security by eliminating any single point of attack.
Next, you will choose a method of payment. Many cryptocurrencies are available to purchase in fiat currencies most commonly the U.S Dollar. Direct bank transfers, credit and Debit cards, other Crypto, and online email payments are all viable payments offered by all top bitcoin platforms.
Place your bitcoin orders. You are now ready to purchase your bitcoin
After purchasing your coins, you can choose to hold them for a long time or perform day trading with your bitcoins. Your crypto exchange will provide you with everything needed to buy and sell your bitcoins. Investing in bitcoin also has its risk, plan your investment and assess your investment risk tolerance.