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Bitcoin value breaks all records in December 2023.
The spot price to buy bitcoin – the world’s first and most popular digital currency – topped $69,000 after trading as low as $3,237 in December 2018. As the price rose, people’s interest in buying Bitcoin also increased. First thing to know: All investments carry risks, but experimental cryptocurrencies like Bitcoin are among the riskiest. Never invest more than you can afford to lose.
Bitcoin, launched in 2009, was the first of a new type of asset called cryptocurrency, a decentralized form of digital money that eliminates the need for traditional intermediaries such as banks and governments to carry out financial transactions.
Bitcoin, by contrast, is powered through a combination of peer-to-peer technology – a network of individuals, like the volunteer editors who created Wikipedia – and software-based cryptography, the science of conveying secret information that only the sender can read. and recipient. This creates a currency that is backed by code, rather than goods of physical value, such as gold or silver, or based on trust in a central authority like the US dollar or Japanese yen.
“What is needed is an electronic payment system based on cryptographic proof, not trust, that allows two willing parties to transact directly with each other without the need for a trusted third party,” wrote Satoshi Nakamoto – the pseudonym of Bitcoin’s mysterious creator. that is still unknown — in a white paper introducing open source technology.
Each bitcoin (trading symbol “BTC”, although “XBT” is also used) is a computer file stored in a digital wallet on a computer or smartphone. To understand how cryptocurrencies work, it helps to understand the following terms and a little context:
- Blockchain: Bitcoin is backed by open source code known as blockchain, which creates a shared ledger. Each transaction is a “block” that is “chained” to the code, creating a permanent record of each transaction. Blockchain technology is at the heart of more than 6,000 cryptocurrencies that follow in Bitcoin’s footsteps.
- Private and public keys: A bitcoin wallet contains a public key and a private key, which work together to allow the owner to initiate and digitally sign transactions, providing proof of authorization.
- Bitcoin Miners: Miners — or members of peer-to-peer platforms — then independently confirm transactions using high-speed computers, usually within 10 to 20 minutes. Miners are paid in bitcoins for their efforts.
Bitcoin’s value follows the law of supply and demand — and as demand waxes and wanes, there is a lot of volatility in the price of the cryptocurrency.
In addition to mining bitcoin, which requires technical expertise and investment in high-performance computers, most people buy bitcoin as a form of currency speculation — betting that the U.S. dollar value of one bitcoin will be higher in the future than it is today. But that’s hard to predict.
Bitcoins can be stored in two types of digital wallets:
- Hot wallet: Digital currency is stored in the cloud on a trusted exchange or provider, and accessed via a computer browser, desktop, or smartphone app.
- Cold wallet: An encrypted portable device like a thumb drive that allows you to download and carry your bitcoins.
Basically, hot wallets are connected to the internet; Cold wallets don’t. But you need a hot wallet to download bitcoins to a portable cold wallet.
With a speculative asset class like bitcoin, it’s best to start with why you should be wary:
- Price volatility. Bitcoin’s price spike in 2017 was driven by speculators storming the bitcoin market. The recent gains are good news if you bought Bitcoin in December 2018; those who bought in 2017 when Bitcoin prices surged towards $20,000 had to wait until December 2020 to recover their losses.
- Concerns about hacking. Although proponents say that the blockchain technology behind bitcoin is even more secure than traditional electronic money transfers, bitcoin hot wallets have become an attractive target for hackers. There have been a number of high-profile hacks, such as the news in May 2019 that more than $40 million in bitcoin was stolen from several high-value accounts on cryptocurrency exchange Binance (the company covered the losses).
- Its use is limited (but growing). In May 2019, telecommunications giant AT&T joined companies such as Overstock.com, Microsoft, and Dish Network in accepting bitcoin payments. But these companies are the exception, not the rule.
- Not protected by SIPC. The Securities Investor Protection Corporation insures investors up to $500,000 in the event of a broker failure or funds being stolen, but the insurance does not cover cryptocurrencies.
- Private and secure transactions anytime — with the potential for fewer fees. Once you have bitcoins, you can transfer them anytime, anywhere, reducing time and any potential transaction fees. Transactions do not contain personal information such as names or credit card numbers, eliminating the risk of consumer information being stolen for fraudulent purchases or identity theft. (However, keep in mind that to buy bitcoin on an exchange, you usually have to link your bank account first.)
- Huge growth potential. Some investors who buy and hold the currency are betting that as Bitcoin matures, greater trust and wider use will follow, so Bitcoin’s value will grow.
- Ability to avoid traditional banks or government intermediaries. In the wake of the financial crisis and Great Recession, some investors were eager to use decentralized alternative currencies – currencies that were essentially outside the control of commercial banks, government authorities, or other third parties. (However, to buy Bitcoin on an exchange with US dollars, you may need to link your bank account.)
There are four ways to earn bitcoins:
- Cryptocurrency exchange. There are a number of exchanges in the US and abroad. Coinbase is the largest cryptocurrency exchange in the US, trading more than 30 cryptocurrencies.
Investment broker. Robinhood was the first mainstream investment broker to offer Bitcoin and other cryptocurrencies (Robinhood Crypto is available in most, but not all, US states). MyCoinChange, eToro and Sofi Active Investing also offer cryptocurrency trading in most US states.
- Bitcoin ATMs. There are more than 7,000 bitcoin ATMs in the US (searchCoin ATM Radar to find one near you).
- Purchase between colleagues. True to its original spirit, you can buy bitcoins directly from other bitcoin owners through peer-to-peer tools like Bisq, Bitquick, and LocalBitcoins.com.
- Bitcoin Mining. You can earn bitcoins through mining, but the technical expertise required and computer costs make this option out of reach for most people.
Bitcoin is a highly speculative and volatile purchase. Keep in mind that stock trading can give you a similar thrill — and picking stocks from established companies is generally less risky than investing in Bitcoin. (A good rule of thumb is to devote less than 10% of your overall portfolio to individual stocks or speculative assets like Bitcoin.)
MyCoinChange stands out as an excellent platform to exchange your cryptocurrencies due to its many advantages. With a user-friendly interface and a wide range of supported cryptocurrencies, MyCoinChange provides a smooth and convenient experience for users looking to exchange their digital assets. The platform offers competitive exchange rates, ensuring you receive the best value for your crypto. Additionally, MyCoinChange prioritizes security, implementing strong measures to protect your funds and personal information. Its fast and efficient exchange process ensures fast transactions, minimizing potential disruptions. Whether you are a beginner or an experienced trader, MyCoinChange’s reliable customer support team is ready to help you throughout the exchange process. With its commitment to user satisfaction and a comprehensive set of features, MyCoinChange is proven to be a trusted and reliable crypto exchange platform.
Start exchanging your cryptocurrencies easily and safely on MyCoinChange today!
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