In the world of finance, every beginner gets introduced to a variety of assets and instruments. Each financial asset has its characteristic value and function. As a beginner, one may find some assets interesting over others. Similarly, one may also find some assets more profitable than the rest. Bitcoin is one such financial asset that has recently hit the market and made a lot of waves. For beginners in the finance domain, the Bitcoin (BTC) cryptocurrency is generating quite a buzz.
Bitcoin guide for beginners in 2021:
History of Bitcoin
To begin with, let’s trace the background of Bitcoin and how the cryptocurrency came into existence. According to records, Bitcoin is the first official cryptocurrency to be developed in the world. In 2008, an anonymous developer Satoshi Nakamoto published a whitepaper, releasing the world’s first-ever digital currency, “Bitcoin.” In 2009, blockchain was devised to manage and mine Bitcoin tokens, and the first Bitcoin transaction was executed. Gradually, the market capitalization of Bitcoin cryptocurrency grew to $1 million by the end of 2010.
In 2011, Bitcoin helped in the creation of altcoins such as Litecoin. In 2012, more than 1300 BTC transactions were recorded across the world. This drove the demand for the most prominent blockchain to date. In the same year, Coinbase platform launched. It helped ordinary people in buying and selling BTC tokens online. Soon, the Bitcoin Foundation was established.
By 2013-end, the Bitcoin price grew to $1,079. It also dipped to $760, creating volatility in the market. Over the years, several regulations were constructed and revised around the use of Bitcoin. In 2020, after completing the third halving, Bitcoin was worth over $8,000. As of April 2021, 1 BTC is worth over $50,000.
What Is Bitcoin and How It Works?
There are no two ways about the fact that Bitcoin is a digital currency. It can be used, stored, and managed online. It is not a physical currency like the US Dollar. Since Bitcoin is not mintable, no government or financial institution has any control or authority over it. This makes the Bitcoin cryptocurrency completely decentralized. People who own a Bitcoin can stay anonymous and keep executing transactions. They can connect with other Bitcoin owners and use their tokens on blockchain technology. Multi-layered encryption keys help the users in protecting their Bitcoin, which can be stored online and offline.
Where Can You Buy Bitcoin?
Bitcoin can be mined with mathematical algorithms. There are Bitcoin mining systems that help users earn BTC tokens online. However, beginners can also buy Bitcoin or a fraction of Bitcoin at the market prices. Coinbase, Gemini, and other cryptocurrency exchange platforms are available for buying Bitcoin.
What Can You Do With Bitcoin
Bitcoin is an excellent asset for mining. After buying a Bitcoin, the beginners can store it offline in cold storage services. And, over time, the value of Bitcoin increases. In some instances, despite the fall in the price, Bitcoin tokens are still more profitable in the finance world.
Bitcoin is now widely accepted as a means of payment for services and goods. People can set up their Bitcoin wallet account. This crypto wallet can help them store and transfer BTC for buying other products and services. The wallet also helps in keeping track of digital money transactions.
Bitcoin is profitable because it registers an explosive growth in value. One token of Bitcoin was worth $8,000 in 2020 and is now worth $50,000. This marks more than 400% growth in a single year. Such profitability is not validated by any other financial instrument in the market. Bitcoin transactions are the future of accessible and profitable trading. In less than a year, the value of Bitcoin surpasses its value of mining. Historically, Bitcoin has emerged as the best asset in the finance world. You can also make a good profit by choosing a trusted Bitcoin robot like the Bitcoin lifestyle. It is an authentic platform that can help you to make a good profit from Bitcoin trading. To know more about it, Check out Bitcoin Lifestyle Reviews by users and industry experts.
Risks Associated With Bitcoin
There are two significant risks associated with Bitcoin, which are their security and price volatility.
- Security Risks: To protect the Bitcoin wealth from online attacks, users need to keep their private keys safe. They need to store their BTC tokens offline, which can cost them extra. Even in such cases, there have been instances of BTC thefts worth millions of dollars worldwide. Hence, the security of Bitcoin stays compromised even today.
- Risky Price Movements: The value of Bitcoin grows aggressively. However, the market has also experienced many lows. There have been instances where the value of Bitcoin has dipped by 150%. In such cases, the worth of stored Bitcoin tokens drops and results in failed investments.
Despite these risks, the adoption of Bitcoin and other cryptocurrencies continues to grow. With every passing day, Bitcoin becomes more valuable to the common people than gold or other company stock.
In the coming years, Bitcoin is set to grow exponentially. It is slated that BTC transactions will rake in more than $1 trillion by the end of 2025. With this growth, almost every person in the world will be interested in owning a part of Bitcoin. This will support its market stability and yield massive profits in the long run.