What bitcoins are and what they are used for: everything you need to know.
Bitcoin is a digital, decentralized monetary system. It was conceived as an alternative to the existing financial model. All bitcoin transfers between participants go without intermediaries and are not regulated (decentralized). All information about the transfers is stored in a database.
To understand what a decentralized system means, let’s take real money as an example. If you want to transfer a certain amount of money to someone, your transaction will involve an intermediary — a bank. Banks are subject to and regulated by the state in which they are located. But you won’t be able to make a BTC IBAN exchange at the bank.
Banks are required by law to demand information from customers about the origin of the funds. You can’t bypass the law because all the money is held by the bank. Only through the bank will you have access to it.
With bitcoin, you have no intermediaries. Instead, you have a decentralized blockchain network. Transfers go quickly and with minimal fees. This is true if you compare transferring bitcoins between different countries with transferring currency through a bank.
Most people who are interested in cryptocurrencies most often buy bitcoins. They have already passed the “test of time.”
Why are Bitcoins needed?
In 2009, when bitcoin first appeared, it was worth a few cents against the dollar. To be exact, you could buy 1,309 bitcoins for $1. But as this system became more popular, the price of bitcoin began to rise.
There could be 21 million bitcoins in the system. The fewer bitcoins left, the higher their price becomes (scarcity drives the price up).
Because of volatility, bitcoin is not suitable as a payment currency. Few people will use it, to be exact, because there is no adequate price predictability. But using the trastra crypto wallet, you can make purchases wherever you can. Today, bitcoin and other cryptocurrencies are used mainly as investment tools. … buy it cheaper, hold it, and then sell it at a higher price.
If you want to invest in bitcoin, it’s a high-risk asset. You don’t know how it will behave in the future. It’s a lottery now, and nobody knows the future. If you decide to invest in bitcoin, do so with a small percentage of your income or savings. A percentage you don’t mind losing. Don’t take out loans or sell assets to invest in cryptocurrencies.
Where does bitcoin come from?
While in the case of dollars, everything is clear, with bitcoins, the situation is different. Bitcoins are “mined.” Those who “mine” bitcoins are called miners. A cryptocurrency is a program code that is stored on a blockchain. To get this code, you have to solve mathematical problems with the computing power of a computer. That’s what miners do.
The fewer bitcoins left in the system, the more difficult the task becomes and the more time it takes to “mine” the bitcoins. There is a limit that does not allow you to mine more than 3,600 bitcoins per day.
Summary
We told you what bitcoins are in simple terms: why they are needed, how to buy them, and where they come from. Bitcoin is now a high-risk asset. Invest no more than 5-10% in high-risk assets. To buy bitcoin, you need a special cryptocurrency wallet.
You can register it for free at a specialized service. You can also download a wallet on your computer. If you want to get rich quickly on bitcoin, you have to take all its risks. including the risk of losing all your money. You can make money on bitcoin if you study the topic of cryptocurrencies and the principles of investment well.
