Bitcoin – the cryptocurrency that continues to amaze the world, a first of its kind that many never imagined to grow to such proportions and to have such an effect on trading.
The promise of a wider consumer base has made Bitcoin roar to fame. However, to the uninitiated and eager mind, the question remains – what is Bitcoin and of what use is it to trading?
Some people, even after exposure to this amazing e-currency, are yet to unravel what the currency is or how vital it is to the economy.
What, Exactly, Is Bitcoin?
Bitcoin is a type of digital currency, which means it is a currency that is generated and stored electronically. The Bitcoin network cannot be taken control by anybody or any country – it is decentralized, though it is managed by a database called a Blockchain.
Bitcoin is a brainchild of an individual who uses the name Satoshi Nakamoto, and it came into being in 2009. A few years down the line, Bitcoin is now leading the trend in e-currencies.
Some Facts About Bitcoin
Before we delve deeper into what this cryptocurrency gives you in terms of convenience and benefits, let us explore some facts that can open your eyes.
- The first Bitcoin was worthless, and each Bitcoin only cost a few cents. 8 years down the line, Bitcoin hit a high of $17,900. In 2010, the worth of 10,000 Bitcoin was a measly $41.
- The inventor of this currency is still unknown. There have been several speculations to this fact, but till now, the inventor is still a mystery to the world.
- It is untraceable, but not entirely untraceable. When making a transaction with Bitcoin, the identity of the user remains unknown. However, if someone knows your Bitcoin address, they can see the number of Bitcoin you have in the e-wallet and the transactions you have made so far.
- Your private key is everything. If you lose the Bitcoin private key, you lose all your Bitcoin. Without the key, you cannot access your Bitcoin funds.
- You can buy a lot of items and services using Bitcoin. This means you can pay your suppliers with the coins, as well as accept payment using this currency.
- Bitcoin cannot be banned. Due to its nature, this currency can only be regulated but not banned.
These and a host of other facts point to the importance of Bitcoin in trading.
Steps to Start Trading With Bitcoin
Before you can start selling your items to customers and receiving Bitcoin as payment or before you can start buying items with Bitcoin for resale, you need to perform some essential steps.
- Get a Bitcoin Wallet (E-wallet)
The first thing you ought to do is to get a way to store your Bitcoin. To this end, you need a virtual wallet, which is basically a combination of codes. This is your Bitcoin wallet, which has an address. The address is like the bank account number you get when you open an account with your local bank.
Your customers can send payments to your e-wallet, and you can send the payments for supplies to suppliers. You can use different kinds of wallets, some that you can download to your phone and others that you store on your thumb drive.
Most people prefer to have the e-wallet on their laptops or mobile phones because this makes it portable. Opening a wallet is all about registering on a platform that offers this service or downloading an app to your Android or IOS device.
- Get a Vendor
The next step is to get someone that sells Bitcoin that is if you are planning to send it to your supplier or pay for a service. There are several Bitcoin markets and each is different. You can buy direct using cash or pay via bank transfer. Some vendors accept PayPal as the mode of payment. You can decide to buy the Bitcoin online or use the platform to identify buyers in your area.
No matter the platform you decide to buy from, make sure you do extensive research and try different places before you make a decision. Consider the coin price, method of payment, customer service and extra fees.
- Buy Bitcoin
Once you find a place to buy the Bitcoin, you need to get the funds ready for a purchase. For instance, if you are using a credit or visa card, you need to make sure the card is loaded with enough funds to complete the purchase. The vendor simply transfers the amount to your wallet.
All the services use an escrow system, which means that you pay the amount which is then held by the platform until the vendor delivers the coins. This way you are protected against fraud from unscrupulous sellers.
- Sell Your Products or Services Using Bitcoin
You can also receive the payment via Bitcoin straight to your wallet. All you need to do is send your customer your Bitcoin wallet. Consumers can send their payment to your wallet easily. The good thing is that the money reflects in just a few minutes and you can then ship the item. You can sell anything from coffee to pens to services such as massages and legal services.
What is the Future of Bitcoin?
Bitcoin has been around since early 2009 but just started t make headlines in 2013. Since early 2013, this cryptocurrency has seen a volatile journey, ascending to unimaginable heights in just a short time. The simplicity, anonymity and the ease of making transaction make Bitcoin a popular currency that is not going anywhere soon. With so many advantages, this coin will remain relevant globally. It was the pioneer cryptocurrency and so it retains the privilege of being at the forefront.
A Store of Value
Just like any other currency out there, Bitcoin has become a store of value for many people. Only a small percentage of the currency is in circulation, many people hold on it to transact with it in future when it rises in value.