If you've been anywhere near the internet or news stations over the past few weeks I'm sure you've heard of the new exchange that is taking over the world. It has been featured all over the local airwaves and making headlines in the financial sector for making investors 10x 20x their returns. So what is this magical legal tender or is it even legal at all. Welcome to the magical world of Bitcoin. But what exactly is bitcoin, who created it and more importantly how do you get involved with bitcoin. what are the risks, well luckily for you, you've come to the right place. Here is everything you need to know about bitcoin.
What is Bitcoin,
Bitcoin is the world's first open source, peer to peer unregulated decentralized digital currency that allows people to send "money" or bitcoins to others with no intermediary or clearing house such as a bank or credit union. It is completely encrypted which means it sends money totally anonymous by using secret codes. It does however store every transaction on a global ledger known as the "block chain". People buy bitcoin based on the confidence. People buy bitcoins with cash; they use them to trade goods. and they earn more bitcoins by solving complex mathematical problems.
Who invented Bitcoin,
It is unclear who started bitcoin. The original bitcoin software was released under the MIT license in Cambridge Massachusetts.
Why the need for Bitcoin,
In today's world the financial system is in total flux, currencies failing, the crisis in Europe causing shockwaves throughout the world, massive government bailouts of banks the federal reserve printing money at alarming rates. The world is need of something with control and pure value. Unlike the federal reserve that can print money on a infinite credit card. Bitcoin has a set amount of currency that will ever be put in circulation. 21 million. However the money is not in full circulation yet. Bitcoin has a process called mining in which it produces a certain amount of bitcoin a day and until the time it reaches the 21 million., and that's it no more or less bitcoin. Currently, Roughly 25 bitcoins are generated every 10 minutes. and they trade just like commodities on the NYSE where the price is determined by supply and demand.
Disadvantages to Bitcoin
Hacks. hackers have stolen bitcoins from digital wallets and hijacked computers to create new bitcoins from themselves by using botnets. Also, the #1 and #3 largest bitcoin exchange platforms have be compromised and hacked for a few million dollars. Hackers prey on unsuspecting bitcoiners and miners. the problem is not only with those with bitcoin, a botnet or virus can be mining coins from your PC without your knowledge.
Also, Integrity. with no governing body looking over bitcoin's unregulated system. It's a complete matter of trust that bitcoin trades. How can you be sure you can trust bitcoin. Well this all depends on your personal preference. If this is not a cause of concern and you are very risk tolerate then you are on your way. But if you are a little concerned then bitcoin may not be for you.
How do you get involved with Bitcoin,
To get bitcoin you must download a virtual wallet from a virtual wallet service like Mt.Gox©, We use coins© or Coinbase that way you can convert your dollars into coins, hold and store your bitcoins and switch them between users. They have apps on android and mac so you can have the luxury of bitcoin in the palm of your hand.
Be aware you must protect your computer and bitcoins, First by making sure your PC is clean, run an anti-virus scan and keep up to date with the latest threats.