Revealed facts about what Bitcoin is and how it works.
Did you know that Bitcoins created decentralized trust? Well, now you know. But what do I mean by the creation of decentralized
trust? Through depoliticized regulations on money supply, in fact, bitcoins have
revolutionized the economy, the nature and role of the government in creating a
currency without a government. So, why was bitcoin invented in the first place?
In this video, you can find more info about what Bitcoin is?
Why was bitcoin invented?
Previously human beings through the batter trade system paid each other using silver and gold which was difficult to divide and transport. Later on, paper money was invented and this was easier to divide and transport and acted to serve as a claim on the gold reserves in the bank vaults.
Consequently, banks gave out more paper money than the gold
they had in their vaults and this led to many banks collapsing through
increased money supply. The Central Bank was later on invented as the lender of
last resort to bail out the collapsed banks.
But creating the Central Bank did not stop banks from collapsing and the respective governments, in this case, would intervene to bail out the collapsed banks. But ever since 1971 when President Richard Nixon of the United States stopped the USD from being exchanged with a fixed amount of gold, money ceased to be supported by an asset and was instead created as credit by the banks.
This ultimately led to the explosion of money supply experienced in 2006 that
greatly contributes to the yearly increase in prices of basic goods and services
represented by the yearly inflation rate of 2% that is charged on the society.
Some of the challenges of the paper money system include; in the event of a
a financial crisis, banks take the society as the hostage and require bailouts or
they will collapse, the governments and banks also took away the fundamental
rights of humans to engage in financial transactions as one would not exchange
money without banks intermediating.
Finally, the main financial problem experienced during this regime was the absence of sound money and all these factors led to the invention of the peer-to-peer electronic cash system by Satoshi Nakamoto in 2009 called the Bitcoin.
Now that you know why bitcoin was invented I am sure by now you are probably wondering what is bitcoin and bitcoin mining?
Allow me to decipher!!
Bitcoin is a decentralized cryptocurrency that is used in the global payment system. It is the first decentralized digital currency system available in the world that works without any government regulation or intermediary, any administrator or regulators and without a central bank.
It is a peer-to-peer electronic cash system that allows you to use the cryptocurrency by directly sending orreceiving without the intermediation of any third party or regulations.
Bitcoin mining, on the other hand, is the process by which the cryptocurrency transactions are verified before addition to the blockchain also known as the public ledger.
It also refers to the process discovering new bitcoins through verification of bitcoin transactions and can be done with anyone with access to
the mining software and specialized hardware.
With that said, I am sure you are curious how bitcoin mining is done. Let us quickly
dive into how it is done.
Bitcoin difficulty: How Bitcoin Mining is done?
Bitcoins are mined like gold but act as cash and 1 Bitcoin current trades for $18,792.00. So, how many bitcoins are actually there? When Satoshi Nakamoto invented the peer-to-peer digital currency system in 2009 the infinite number of bitcoins was set to 21 million. Currently, more than 12 million cryptocurrencies are in circulation and this implies that less than 9 million bitcoins are yet to be mined.
There exist only three ways to obtain bitcoins:
- Accepting the cryptocurrency in exchange for goods or services
- Buying them on an exchange and
- Mining new ones
Bitcoin mining refers to the process of discovering new bitcoins. For bitcoin miners to verify genuine bitcoins, all the bitcoin transactions are gathered into blocked chains also box with virtual padlocks.
Once the server computer finds the box, it opens up and the bitcoin transactions are verified. For finding a bitcoin, a miner is rewarded 25 bitcoins that reflect after 10 minutes. Bitcoin mining requires specialized hardware and software.
The bitcoin mining software is open source and it is freely accessed by anyone. You will also require an online encrypted bank account to hold the mined bitcoins. You can also join mining pools which represent a group of global bitcoin miners who pull together their computer power to mine bitcoins.
Given the above amazing facts on what is bitcoin and bitcoin mining, I am sure you are probably wondering whether to invest in bitcoins. Here is why you should invest in bitcoins;
Why you should invest in bitcoins
- It is impossible to produce counterfeit bitcoins
- You will encounter low fees while making payments
- They are accessible by everyone
- No third parties involved and you will receive an immediate settlement
- Bitcoins mark the end of identity theft
Now that you know why you should invest in bitcoins, by now I am sure you are probably wondering what the right time to buy bitcoins is?
In this video, you can find more about Cryptomining:
When to buy Bitcoins?
Since the invention of bitcoins, there has been an upsurge of different cryptocurrencies, market changes, and coin price fluctuations that affect the price of bitcoins. Before buying bitcoins, you should first know how to monitor the various price changes.
You should always study and observe the flow of the bitcoin prices on its chart to determine whether it is going up or down. When the bitcoin price goes low, that is the best time to buy your bitcoins.
For you to make profits through selling your bitcoins you should also monitor the price fluctuations and sell your bitcoins when the prices are higher than what you bought them at.
With that said, I am sure you are now convinced of the benefits of bitcoins and when to buy bitcoins but probably wondering what the best strategy for buying bitcoins is. Here is the best bitcoin trading strategy;
What is the Best Bitcoin Trading Strategy?
The best bitcoin trading strategy you should employ is the strategy of trading bitcoins for profits. This strategy employs 15% cryptocurrency strategy of trading and 85% price action trading strategy.
For day trading you only require the OBV also On Balance Volume indicator that can be used to monitor the total money flowing into and out of the market. The OBV indicator is available on most trading platforms like the MT4 and Tradingview platform. The center of focus here should be the OBV should move in the same direction and the price of the bitcoin.
Things to remember!
- Bitcoins created decentralized trust
through depoliticized regulations on the money supply
- The absence of sound money system led to the invention of Bitcoins in 2009
- Bitcoin is a decentralized cryptocurrency that is used in the global payment system
mining refers to the process discovering new bitcoins through verification of
- The process of Bitcoin mining
- Why you should invest in bitcoins
- When to buy bitcoins and
- The best bitcoin trading strategy
The best place to buy Bitcoins?
Based in San Francisco, Coinbase allows users to buy with USD, Euros etc.. Coinbase really is a great site for multiple reasons, but most importantly because it’s intuitive and very easy to use Coinbase is also most secure exchange and has over 18 million users. Card purchases are really simple and fees remain very low.
Like all major exchanges, Coinbase does require ID submission before you can finalize an order. Current verification times are reportedly slower than usual. Should you want to trade like a pro: use GDAX for larger volume transactions and cheaper fees.
You can check these Bitcoin brokers as well but the fees are high and they don’t have a good reputation:
You can Manage bitcoins and convert them to USD, EUR or GBP, send bitcoins to friends,
withdraw at ATMs and shop anywhere with cards. Criptopay is available for both Android and iPhone!
Localbitcoins is one of the first and largest P2P exchanges. They are great because in most cases no verification is needed, meaning that it is possible to stay anonymous.The fees are almost 10 % higher than elsewhere.
Bitcoin exists due to the faults and challenges of the current financial system.
With that said, remember decisions are based on knowledge.
As you plan to buy or mine your own bitcoin use this guide in understanding why bitcoins were
actually invented, the difference between bitcoin and bitcoin mining, the
process of bitcoin mining, benefits of investing in bitcoins and the best
bitcoin trading strategy you should use to profit from bitcoin trading.