Bitcoin is an independent and intangible virtual currency. What differentiates this cryptocurrency from a current currency such as dollars or euros is that it does not belong to any State. In other words, what are bitcoins? They are basically decentralized currencies since there is no central bank, government, or financial institution or company that acts on it.
Bitcoin is the blockchain and the corresponding cryptocurrency. Its goal is to free humanity from banks and other traditional financial institutions.
Bitcoin tries to do this by allowing people to exchange bitcoins and pay for things anonymously.
How bitcoin works
For the end-user, Bitcoin is one more means of payment, such as the and an asset to invest in, such as a stock or oil. So is it safe to invest in bitcoin or not? Given this question, it is worth knowing that behind all this market there is a technology that allows the system to be reliable. It is the blockchain or blockchain technology that, among other things, prevents double spending of the currency, that is, that someone can spend the same bitcoin again.
In short, the Bitcoin network is a public accounting system of which each user keeps a copy. Every time someone performs a transaction, it is stored on the users’ computers, so that what is known as double spending is avoided.
How to invest in bitcoins
Another formula to get bitcoins is to invest in virtual currencies. In other words, speculate with the cryptocurrency as we would do with gold, oil, or any stock.
How to buy bitcoins
To buy bitcoins, just go to one of the bitcoin trading platforms. Those who already should I invest in bitcoin 2020 in the stock market will find its operation similar, although somewhat different from that of a broker.
These platforms are called bitcoin wallets and it is where virtual currencies are stored. There are different types of bitcoin wallets depending on issues such as security and usability.
The former are bitcoin wallets for PC, which you can download as a program for your computer. The second is the online virtual currency wallets, which can be for mobile or for computers, it is indifferent. The second is the safest and are the hardware wallets. In other words, a physical device that will store the virtual codes of your cryptocurrencies.
As a user, you can use one or more virtual wallets that will have their backup passwords and their encryption system. In this sense, it is common for online wallets to request double confirmation of keys via SMS.
Advantages and risks of investing in Bitcoin
The benefits of investing in cryptocurrencies are evident. The first is the enormous profitability you can get, as long as you bet or bet at the right time. As with any other asset, and more after becoming a trend, the timing of the investment in bitcoin is critical.
From there it is all a matter of whether or not you believe in your future as an alternative to traditional currencies or fiat currencies. If you are confident that this type of system and blockchain, in general, will end up having a hole, long-term investment will be interesting.
That speculating with bitcoin is interesting does not mean that it is not without risks. The most important is that bitcoin is very volatile. In fact, it is extremely volatile. Its price can vary by more than 10% in the same session, so speculating with the classic rules can be difficult.