What Is Bitcoin (BTC)?
We say that BTC is the first cryptocurrency and that’s true, but you have to know that it’s not the first attempt for digital money, those were made at the end of the last century too. However, it was only in 2008 when the pseudonymous Satoshi Nakamoto introduced an alternative to traditional finances, based on an innovative technology.
In case you may get confused by the spelling of Bitcoin – you can find the word is written with a capital letter when referring to the system in its complexity and with a lowercase letter when referring to the currency. BTC is the native currency of the blockchain.
What this new currency provided was decentralization – you no longer had an institution that controls your money, there wasn’t anyone to freeze your bitcoin funds. Instead, the blockchain technology allows for the equal rights of users on it to create the cryptocurrency. This manner was liked by many people which led to the popularization of digital assets and after the first one, almost 20,000 have now emerged.
Being a digital currency, Bitcoin is not represented by a physical token, instead it’s stored only online. Bitcoins are created as a reward for mining them, as they use the Proof-of-Work mechanism. If you don’t want to get into overly complicated explanations, the mining of BTC is a process of creating new bitcoins by solving extremely complicated math problems that verify transactions in the currency. When a bitcoin is successfully mined, the miner receives a predetermined amount of bitcoins, currently 6.25 but the amount is reduced over a certain period of time.
As this is the first cryptocurrency, its technology has gotten outdated with time and many have expressed concerns about the power it takes to create this crypto. New cryptocurrencies who aim to solve this environmental issue, as well as just prove to be better than the king crypto, have emerged with different consensus mechanism, like Proof-of-Stake, for example. If you look are cryptos like Cardano you may see the strive for new technology to overcome the BTC popularity, by using the evolution of the processes of creating new cryptos.
The Current Bitcoin Price
The price of any digital asset is one of the first things investors consider, however, the case with the Bitcoin price is a little different. On one hand, you’ve got the price of the asset as an entry to invest and potentially earn from it. Some investors may say BTC is too expensive, though it trades currently lower than its 2021 all-time high of almost $69K. They could still invest in the first crypto by buying just a fraction of it, called Satoshi. For others, the BTC cryptocurrency is very cheap, considering how valuable it actually is.
But the price of this asset is not only important for its investors and traders, it’s the driver for the whole crypto market. The Bitcoin price is used to calculate the fear and greed crypto index, as it’s able to move the market in both directions. The digital assets are known to be easily influenced by outside factors, the tweets of Elon Musk in 2021 more than once influenced the prices of assets. But the first crypto is so powerful, any of its price movements can make the other altcoins move.
If you’re curious how the BTC price is behaving at the moment, you can consult with the chart below.
Where to Buy Bitcoin (BTC)
Being the first and still most famous cryptocurrency, you have many ways how to buy Bitcoin as well as many places where to do it. The most easy way, however, would be to do it on a platform for crypto trading. The two types of platforms that offer crypto for trading are brokers and exchanges. They differ on the type of assets they provide, as exchanges will allow you to only trade crypto and brokers offer other assets too, like stocks or bonds. If a platform offers crypto trading, it’s most likely to support this asset as well, considering its popularity and domination of the market.
If you want to buy your BTC at a broker, you could do it at places like Interactive Brokers or eToro, where you’ll find the asset and after creating and verifying an account, you can purchase it with fiat currencies and pay in different methods, including card and bank deposit.
You can also buy this asset on a crypto exchange. You can buy the coin at either a decentralized or centralized exchange. If you want to avoid third parties in your transactions, you can look for the WBTC token, the tokenized version of BTC, meaning its value is exactly the same as the original asset, that runs on the Ethereum blockchain, on decentralized exchanges like Uniswap. If you want to buy the BTC token, you can pick one of the many centralized exchanges that offer the first crypto. Popular options like Binance and Coinbase will let you buy the coin but remember that there your transaction will be monitored by a third party, unlike with centralized exchanges.
When you’re picking where to buy your bitcoins, you may want to consider if the platforms offer the option of storing your assets on them. Some brokers and exchanges will provide you with a built-in wallet, which is a great option for people who don’t want to search for separate wallets. However, if you want to explore more wallet options, we’ll provide them in the following section.
What Is the Best Wallet for Bitcoin (BTC)
The Bitcoin wallet you pick can be choosen between two types: hot and cold wallets.
Hot storage wallets like Exodus and Mycelium are always connected to the internet – this means that both your cryptocurrencies and your private key are stored online. You can access this type of wallets using only your electronic device and the internet.
If you’re worried about the storage of your digital assets and private key online and afraid hackers may steal them, then hardware wallets, known also as cold storage wallets, are more suitable for you. The external devices, for example Trezor or Ledger, are connected to your computer and the internet only when you’re executing the transactions.
Whether your priority is the fast access to your bitcoins, or they safety from malicious attacks online, you can decide that and pick the best wallet for you BTC tokens based on it.
How to Make Money With Bitcoin
You can make money out of BTC in two main ways by investing in it with a long term vision or by trading the crypto.
If you decide to buy and hold your bitcoins, you’ll have to be really patient and have a vision for the future in which the price will rise high enough, to potentially bring you big returns. There have been cases of bitcoin millionaires so far, though realistically that’s one in a million chance (pun indented). Of course it’s possible to double your returns and earn even more if you’ve bought your coins at a lower price and the market turns favorable. However, the chance of BTC’s price getting lower and lower with time also stands.
If you’re looking for a faster way to make money out of BTC, then you can trade the crypto. This means you’ll have to find an exchange that offers BTC, then buy the coin at a supposedly lower price and sell it as soon as it rises enough for you to cover your expenses for the deal and earn some extra. You can actively trade even on a daily basis and try to initiate winning deals. The risk here is that you may not get as big returns as a long term growth of the crypto may give you. Additionally, if the platform of your choice gets slow for some reason, you may miss a target price and experience losses.
What Are the Pros and Cons of Bitcoin (BTC)
Pros of Bitcoin
✔️ High liquidity
✔️ Potential for high returns
✔️ Established and proven digital asset
Cons of Bitcoin
❌ Limited use cases
❌ The power and cost that mining this crypto require are very high for most people
Is Bitcoin Worth Following?
Since it was created in 2009, the first cryptocurrency has impacted the way finances work. Even though BTC hasn’t succeeded in replacing fiat currencies, it has become a widely accepted payment option and today you can even buy your car with bitcoins. But not only that, it’s introduced blockchain – the technology that today many sectors beside the cryptocurrency one have recognized and implemented in their work.
This financial asset is worth keeping an eye on not only if you’re a crypto investor, though you should definitely follow it if you are, since its price influences the whole market. But even if you aren’t Bitcoin is a powerful presence in the world in general. Because of it, cryptocurrencies have helped unemployed people, or impacted other areas of life. The digital assets, led by the first crypto, may have not replaced traditional money, but they’ve proven to be a lot more valuable than just a fiat alternative.
Even though it’s more than a decade old, this cryptocurrency surely has a lot left to show to the world.
FAQs About Bitcoin BTC
Bitcoin and other currencies aren’t regulated by governments or central banks. However, many countries have created local laws and policies, regarding digital assets. With the popularization of cryptocurrencies, lawmakers are likely to wish to impose more control on this new type of money. At the moment, though, there isn’t a single law or regulation globally about digital assets.
No, there are several countries where Bitcoin and cryptocurrencies in general are legally banned. At the time of writing, they are Algeria, Bangladesh, China, Egypt, Iraq, Morocco, Qatar, and Tunisia. There you can’t trade any digital asset, according to the local laws, as well as no cryptocurrency exchange is allowed to operate in the states.
As every investment vehicle, Bitcoin comes with a risk, however, being a digital asset, the risk is even bigger. Consider its volatility and the uncertain future of digital money when investing in BTC.