Bitcoin is a type of cryptocurrency (digital currency) founded anonymously in 2009, by a person(s) who used the name, Satoshi Nakamoto. However, unlike other currencies, bitcoin does not go through a bank, or any middle men. It is the first successful online currency after hundreds of attempts, and it has been becoming increasingly popular over the last few years. Online means that is doesn’t have any physical bills or coins which you may see in pictures. It allows you to make transactions . But, in the modern world, it is mostly bought to make a profit, with people hoping the value will go up, and getting rich by trading it. At the start, you could buy just 1 bitcoin for 30 cents! Now, as popularity grew, it reached a peak high at almost 60,000 U.S dollars for each bitcoin. Currently, it is around $50,000, however, it could still grow. The value can grow because there is no country governing the currency.
Some people buy bitcoins for a type of currency. Small businesses would like to use this since it doesn’t have any credit fees, like credit cards. That is why some businesses give a little discount for people who pay cash, since they don’t have to give a percentage away. Bitcoin fits perfectly for them. However, most people don’t use it as a currency, they buy bitcoins hoping that the value will go up, or they trade them. When trading, the cryptocurrency gets sent to the users cryptocurrency wallet, which is also all online. However, bitcoin value isn’t always sunshine and rainbows. There are plenty of lows, and the value fluctuates, meaning at one point, it can be very high, and it is the point to sell, or it can be low, which is the time to buy so the value can go up. It is important to manage and cryptocurrency very well, or else you could lose a lot of money.
In kid terms, if there are more people who want to buy bitcoin, the demand increases for the limited supply. This causes the value to be pushed up for one bitcoin. On the other hand, bitcoin value can decrease because more people become in fear that bitcoin can have a bad future, especially from celebrities, for example, Elon Musk, so the adoption rate for bitcoin decreases. Some other fears include the big value sways and the difficulties of managing, the uncertainty of the future of bitcoin, for people who are planning to use bitcoin for long-term, large currency holder risks, who the community calls bitcoin whales, can be in danger, with them having their bitcoin value in the millions, and finally, there are people who are worried about security breaches. Because of all of these things,,
The way trading works is that you can buy currency or sell when you think the value will rise or fall. These are something called CFDs, which are leveraged, which means you can buy something for a fraction of the market value hoping that it goes up and grows into it. When you do this, it is important to get help so you can time when to buy or sell. At the most basic level, you should at least know to buy when it is at a low, so that way you can make a profit when the value is high. Then, when it is high, and you believe it will not going to grow anymore, it is the time to sell. However, it is not that easy to time it. Things may not go to plan, like even if you buy it at a low, it can lose value even quicker. Or when you think it will grow more, it dips and loses value. But the worst might be when you sell and (hopefully) make a profit, the profit skyrockets right after. This is why it is very risky. This type of volatile currency is called floating. You may be wondering how this is recorded. In bitcoin, or any other cryptocurrency, when something is bought or sold, the transaction is recorded in something called a blockchain. Think of it as a digital register. When this happens, it adds a digital block of information to the chain. This is how it gets the name of blockchain.
There are a few ways. You can get it from an ATM, or you can use peer to peer trading. But one of the new ways is to use many computers to solve something with a complex algorithm, too hard for humans to quickly do. Then, you are rewarded with a part of a bitcoin, and it gets checked and recorded to the blockchain. However, there isn’t an unlimited supply of these new bitcoins, only 21 million, which may seem like a lot, but researchers suggest that number will be reached by 2024.
There are many positives an negitives you have to understand if you want to buy bitcoin. One great positive is that it is fast and easy to send bitcoins. Another is that there is no middle man, and it is secure that way. Then for the security people, there are lower fraud risks and there is a lot of transparency in the business. Now on to the cons. One clear one is the high volatility. Yes, you could end up with tons of cash, but when things don't go to plan, it could be a grave loss. Finally, no bugs have been found yet, but if there is one, it can mess with your currency wallet, and you could lose all of your bitcoin.
In conclusion, bitcoin is a new and amazing currency that is extremely volatile but at the same time, very profitable. A simple rule that bitcoin whales and other people say, is that to only buy what you are okay with losing.