What is Bitcoin and How do you buy it?

What is Bitcoin?

What is bitcoin you ask? Bitcoin is a digital currency and it’s different from a regular currency in two ways.

1. You do not have physical cash or coins to exchange
2. It is decentralized.

Let’s talk about these two points in more detail so that you can better understand.
1. No physical exchanges – this is important because it means that while you can still trade bitcoin and other cryptocurrencies for physical assets and services, you can only transfer/store your currency online (with a few exceptions but that’s for another post). This means that in the crypto world, security is VERY important and you will want to set up either a paper wallet or an encrypted wallet.

2. What is Bitcoin’s central point of transfer? That’s the beauty of cryptocurrencies, there is not central point like a financial institution or government body, it is decentralized. What does decentralized mean and how does it work? It means that the verification is done by multiple users or computers on the blockchain. The blockchain is a collection of computers from around the world that verify the transaction. In addition to having random, world-wide verification computers, each transaction is encrypted so the system is next to impossible to hack or manipulate.

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What is Bitcoin made from?

In other words, where does a bitcoin or other cryptocurrency come from or how is it made? The answer is ‘mining’. Mining cryptocurrency is a giant topic on it’s own so I won’t go into much detail, but basically a mining machine is one of the computers that verify transactions (as stated previously in the last section). Each time a ‘miner’ or computer verifies a transaction, they are rewarded with the cryptocurrency they verified for, so in this case, a bitcoin! The currency supply is finite and is set when the currency is created. So the more people investing in the currency, the higher it’s worth – similar to gold which has a finite amount in circulation.

There are a bunch of people making cash mining bitcoins and other cryptocurrency, up to thousands of USD worth per month. If you want to get into it, I would suggest the all in one AntMiner – you’ll pay off this bad boy in about 3-4 months.

How to invest in cryptocurrency

You can buy cryptocurrency similar to how you buy stocks in the stock market. You join an exchange and from there you can purchase amounts of different currencies. If you’re interested in start-up businesses, you can also buy cryptocurrencies at a discounted price when the currency is about to be created. This is known as an ICO or Initial Coin Offering. This is similar to kickstarter in the sense that a cryptocurrency can be created by anyone who knows computer code. Investors that donate to the new company before they launch, are rewarded with that company’s cryptocurrency (usually at a discounted price).

Here’s a list of some of my favourite cryptocurrency websites.
Exchanges:
https://www.quadrigacx.com/
https://coinsquare.io
https://www.kraken.com

Resources:
https://www.cryptocompare.com
https://www.cryptocompare.com/mining/calculator/
https://angel.co/cryptocurrency
https://www.coindesk.com/

I hope you enjoyed this information and if you found it useful, please retweet me @SillyTechie or Follow me on Instagram @SillyTechie

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