Talk of Bitcoin and other ‘cryptocurrencies’ is everywhere – but it can be difficult separating fact from opinion.
If you search any forum or social media platform and you’ll find wildly different recommendations about what to buy, where to buy it and how it works. We’ll cut through those foggy opinions and tech jargon to explain the following:
- What Bitcoin and other cryptocurrencies are
- How they work
- How you can buy them
- Some of the benefits and risks involved
Whether you’re looking to invest – or you’re just interested in the what the future of currency might look like, we’ll lend a hand…
What is Bitcoin?
Bitcoin is the most commonly known ‘cryptocurrency’ – a type of digital currency that is built on cryptographic codes and a decentralised ledger called the ‘blockchain’.
This blockchain is spread across powerful computers around the globe. The individuals and companies who own these computers use them to ‘mine’ the currency – essentially cracking difficult codes and establishing security throughout the chain to create the digital units.
The way cryptocurrencies are created mean there can only ever be a finite number – there are around 16 million Bitcoins in circulation out of a possible 21 million.
Why do cryptocurrencies exist?
It’s important to understand that unlike physical currency, cryptocurrencies are not issued by governments – which means they are not and cannot be controlled or have fees levied upon it by those governments or central banks.
Because of this, Bitcoin and its peers are often the currency of choice for people who want to remain more anonymous online – it’s often reported that these people tend to be criminals – and while there’s an obvious preference for something close to anonymity for those engaging in illegal transactions, the majority of cryptocurrency buyers see investment value in an alternative approach to currency.
How can I buy Bitcoin?
The process we’re about to explain isn’t unique to Bitcoin and, depending on which broker you use, could extend to virtually any other cryptocurrency.
- Find and create a Bitcoin Wallet
Because Bitcoin has no physical form you need a digital ‘wallet’ in which the code will be held. There are 5 different kinds of wallet you can create:
- Desktop – A desktop wallet involves downloading a large piece of software that holds your Bitcoin on your computer. Not normally a good option for beginners. Check out: Bitcoin Core, Multibit and Armory for some trusted and established options.
- Mobile – Similar to a desktop wallet but a smaller piece of software that holds your Bitcoin on a mobile device. Mycelium, Xapo and Wirex are reputable mobile options.
- Online – The fact that online wallets mean you don’t hold your currency in person can raise some security issues, but this is generally made up for in their ease of use and speed, making online wallets a good beginner option. info is one of those most popular with 8 million wallets, although BitGo’s security measures also make it a popular choice. You can also check out this guide should you be looking to purchase Bitcoin in the UAE – Official Guide about How to buy Bitcoin in UAE
- Hardware – Hardware wallet providers offer a physical device that allows super safe offline storage of large quantities of Bitcoin. KeepKey, Trezor and Ledger Nano provide sleek and secure solutions.
- Paper – A paper wallet provider allows you to print your Bitcoin on to paper, essentially creating a kind of voucher. This is both safe – as it’s offline – and dangerous because it can be destroyed or lost! BitcoinPaperWallet and BitAddress are both simple and reputable paper solutions.
All options have pros and cons. People often start out online – progressing to hardware or paper based wallets further down the line.
- Think security
Whichever wallet provider you opt for, setting up your security measures should be your next step. This is most important when you’re working with any wallet that requires an active internet connection – a potential weak point with hackers and malware programs might have an opportunity to exploit your exposure.
For online wallets, make sure you have two-factor authentication set up on the account.
- Choose a broker
Your next step is to find a broker from whom you can purchase your Bitcoin. Essentially, brokers turn your real credit or debit card money into your chosen cryptocurrency – it’s useful to think of them like a Bureau de Change – they don’t produce the money – they just facilitate the exchange.
As of September 2017, one Bitcoin is valued at around £2885/$3900 – so you might be pleased to hear that brokers are happy to deal in fractions of coins too. Since there’s no physical element to a Bitcoin amount – these can be low – 0.0001 Bitcoin is a perfectly reasonable transaction to make.
It’s important to understand that digital currency comes with potential security issues – and brokers will do their utmost to ensure you and the currency is safe. This will often mean going through significant identification checks – so expect to be uploading pictures of your passport or driving licence to prove who you are.
- Ready to buy!
You’re set up and secure – so the next thing to do is decide how you’d like to spend your money. When you spend your physical currency, you’ll be rewarded with the appropriate amount of Bitcoin in return – and it’ll come to you as a lengthy indecipherable code. Don’t worry if transactions take some time – this can just mean that money being transferred internationally.
You might find that some online wallets that also offer a brokerage service don’t actual reveal the code to you – and that’s fine – you’re essentially trusting the broker in the same way you would your bank.
You’ll now be able to check your balance at any time – usually against some indication of the current trading value of the currency.
- The next move is yours…
The next step in Bitcoin ownership is entirely up to you! If you’re buying Bitcoin with the express idea of spending it then you’re now free to do so. Alternatively, you might want to sit on your digital currency and see how it performs against more familiar options. Or you could look to invest, if you do plan to go down this route then take a look at the mineweb.net Bitcoin IRA investment guide.
In 2010, when Bitcoin was in it’s infancy, a developer spent 10,000 (at the time worth very little) on 2 pizzas. The same 10,000 Bitcoin would now be worth around £29 million pounds. We can’t tell you how to handle your investment – but just be aware, Bitcoin and other cryptocurrencies can fluctuate massively – so seek professional advice before you invest in pizzas…
Bitcoin is a rising star in the digital landscape today, despite only being created in 2008 many people all over the world now use it. Bitcoin grew in popularity so quickly that many people simply missed the opportunity to learn about it.
Getting access to Bitcoin is actually very easy but it wouldn’t do you much good if you don’t know or how it works. Thankfully we can help you there with our introductory guide to Bitcoin!
So What Is Bitcoin?
Bitcoin is a virtual currency, described on its website as an “open source P2P money” by downloading a Bitcoin wallet onto your computer you have access to trading and holding Bitcoin.
Unusually the creator behind Bitcoin is not exactly known, although people have come forward claiming to be the creator.
What is known is that a person or persons using the name Satoshi Nakamoto was behind the creation of Bitcoin. Whether this is a single person or a group of programmers is still a mystery and one which for now is unlikely to be solved.
Despite information being published about Bitcoin in 2008 it actually didn’t become available till early 2009 on January the 3rd. Bitcoin is open source software and is the first decentralized digital currency available.
How Does Bitcoin Work?
While the mystery behind Bitcoin and its creation is interesting, you’re probably more concerned about how you can use it, aren’t you? Thankfully Bitcoin is actually very simple and easy to use and you don’t need to be overly tech savvy either.
Once you’ve downloaded your Bitcoin wallet, you will be able to buy Bitcoins using real money, these can be purchased through a separate company or other Bitcoin users could sell their Bitcoins to you.
Buyers can also place orders for Bitcoins from other users and trade them with each other, this is very similar to how trading stocks works.
Buying or trading Bitcoins is known as a Blockchain, these blocks are an essential part of how Bitcoin works. Before each payment or trade is verified the block will verify the details to the peer to peer network for validation.
This way users can ensure they aren’t scammed and it helps Bitcoin users trust the Bitcoin platform. So that’s basically how Bitcoin works, you can make payments and trades almost instantly and transactions and accounts are not tied to your real identity giving you a level of anonymity not available elsewhere.
Buying With Bitcoin
The one thing everyone wants to know about Bitcoin is what they can buy with it and how exactly they go about it. Now Bitcoin isn’t excepted everywhere and it’s highly likely you won’t be able to go down to your local supermarket and use them to buy your weekly shopping.
At least not just yet, but Bitcoin is being added as a payment method to more and more outlets so who knows in the future it might be possible. Bitcoin, however, does have a big online presence and a number of websites utilize it as a payment method.
The online travel agents Expedia, for example, accept Bitcoin and Shopify online stores can also accept it as a payment method. Statistics vary but easily over 100,000 outlets of various kinds do accept Bitcoin as a payment method.
When it comes to using them to purchase something the system is a little more unusual. To purchase something with Bitcoins you send your private key to the outlet, they would then scan the key and decode it.
During all this, the transaction would be broadcast to other network participants and then once the mining process is completed (usually within 10 minutes) the transaction is completed.
Breaking Down The Jargon
Ok, there’s probably a few terms you didn’t quite understand there, don’t worry we’ll go through them now. Bitcoin is surprisingly simple but that doesn’t mean there is a learning curve to it, understanding how everything works isn’t 100% necessary but while you’re learning the basics it’s best to stick to smaller transactions.
Let’s take a look at some of the terms you need to know about.
Mining: Mining is the process which completes a transaction, it basically adds transaction details to a block. Effectively it is a record-keeping ledger, however, it is completed by other people and they will receive payment once the mining is completed.
Transaction Fees: Transaction fees aren’t compulsory in Bitcoin however if you offer a transaction fee you will attract more miners which means your transaction will be processed faster.
Private Key: A private key is needed in order to spend Bitcoins, it is connected to your Bitcoin address and to your virtual wallet. Therefore, you can have multiple private keys and some Bitcoin users would even suggest that you do. Your private key is a series of 256 numbers which are auto-generated.
Addresses: A Bitcoin address is what you need to give someone if they are paying you in Bitcoins. This isn’t the same as your email or home addresses it is limited just to Bitcoin and each transaction, every time you are paid in Bitcoin you’ll use a different address.
That’s some of the main key terms you need to know about. When it comes to Bitcoin the best way to learn is to just jump in and use the platform yourself. However, remember to start off with small transactions at first till you’re confident.
Are There Dangers?
Nothing is without risk and Bitcoin does have some dangers that new users need to be aware of. Hacking and scams are two of the most common dangers Bitcoin users face and they are not always easy to identify or prevent.
Cyber theft is a crime that has been on the rise for some time and as the popularity of Bitcoin rises more dangers are likely to reveal themselves. However, that doesn’t mean you should be put off from using Bitcoin there’s an element of risk with all things and the benefits of Bitcoin are too good to ignore.
Technology these days have surely gone far already. People do not settle for the things that are done usually and they tend to go for more convenience. One of the best examples of surpassing technology is the mode of payment. These days, going cashless is very common just like the usage of Bitcoin. Which has also become of one of the most popular ways to make money online fast through mining and trading.
Bitcoin is a digital form of payment where people who are transacting avoid a middle person. The exchange of payment is direct already. Bitcoin is used in different industries these days such as mining and many others. It is also used as a form of payment for goods and services since there are a lot of merchants who accept Bitcoin already.
Since Bitcoin has become famous, here are some facts that you might want to know in case someday you might want to use it.
Advantages of Using Bitcoin
The first advantage of using Bitcoin is the fact that there are no third party interruptions. This means that banks or the like cannot interrupt as transactions are ongoing because the transactions are between two individuals.
Moreover, the usage of Bitcoins can be done in different countries. So, the possibility to transact is there but since there are no governments that are regulating the trade, the fees are standard and low as well. This means that there are uniform fees at a low cost and this could be a great advantage to people who want to travel in different places.
In connection with the statement mentioned above, transactions for Bitcoins are not taxed especially when you purchase.
Lastly, with Bitcoin, you can always go mobile as long as you have an internet connection. So, you can purchase goods and services with your Bitcoins with the use of any mobile phone or device that is connected to the internet. In comparison with other modes of payment wherein you have to personally transact. Also, you can be anonymous with Bitcoin since you do not have to provide your personal information.
Steps On How to Use Bitcoin
If you are now interested with Bitcoin, here are some easy ways to use them.
Since you want to start with Bitcoin, it is very important that you buy some first so that you can start right away. There are so many ways on how to purchase Bitcoin. Good example of such includes buying some online or even personally buying it from somebody you know who has Bitcoin. Moreover, there are other ways on how to have your initial set of Bitcoins, all you have to do is to do some research and go for the most convenient way of buying.
The next thing that you have to do is to have your own wallet. In reality, your purchased bitcoins can be stored when you have created the account that you have made in purchasing. But since everything is digital even Bitcoins can be stolen by hacking, so the safest way to store them is through a wallet. There are so many kinds of wallets to choose from such as paper wallets, mobile ones, and web wallets. Just choose the one that makes you feel convenient.
Lastly, you have to create your own Bitcoin address. This address is just like your e-mail address where you want to receive and send Bitcoins. The great thing about this its anonymity.
The usage of Bitcoin is safe and convenient for everyone who has it. It is good to explore different areas so that you will not just settle for the usual. Using Bitcoin has so many advantages that people all over the world should never miss.
There was once a time when making plans for the future were relatively straightforward. But following a surge of changes in the financial demographic, many have been left with assets that may be of lower value than expected.
Those who have owned property in the past can testify to this, as the housing market has seen a series of lows, with December 2008 showing the largest decline in history.
This isn’t to say that you should convert all paper-based assets to gold, but it does highlight the issue of planning our future simply based on paper-based assets. As such, diversification can become a necessity for many.
However, the obligatory gold watch that was on offer s readily years ago is no longer enough to secure our financial future. Nowadays, those looking for security in the future must be more proactive when it comes to making the right decisions, and ensure they are getting the most benefit from their retirement savings with gold.
Something else to consider is that more and more people are living longer than they did in years gone by, which in turn means their current financial plan may not be enough to see them through their retirement. Again, this isn’t to say investing in gold will be the answer, but it does shine a light as to why it’s at least worth considering.
Factors to Consider
Evidently, gold can seem like an attractive prospect when it comes to ascertaining out future wealth, but we shouldn’t jump in with both feet first. There are many services out there available to those looking to invest in gold, but for us to make the most viable return, we must ensure we trust the right people.
While there are many who managed to navigate their way out of troublesome waters thanks to investing in gold, there are just as many who have fell victim because investments haven’t been made in the right way.
Many people will invest in gold by way of a Gold IRA Rollover. What this means is that capital will be transferred from your current retirement plan into that of gold. From here, the administration and storage of the said gold would be taking care of by a custodian. As such, you need to ensure that you’re using a custodian that is both professional and reliable.
Are There Any Potential Fees with a Gold IRA Rollover?
Many can be dissuaded from altering their current retirement plan, as they feel there would be too many fees involved. The good news is that there are no fees or penalties, as long as you don’t take a distribution during the rollover. This ensures that if you are looking to convert any assets, you can do so without make a loss.
Investments Are Secure
Those who have has to secure items made of gold will be able to testify how expensive their insurance can be as a result. There can leave many to assume that investing in gold can be an expensive endeavor. However, there are rules associated with a Gold IRA, one of which being that the precious metals have to be stored in a location that complies with IRS regulations.
However, as the gold is stored elsewhere, many can be worried that their investments are at risk. Nothing could be further from the truth. When your gold is placed in a vault, it is up to the administrator of the vault to compensate any loss should the worst-case scenario occur, which will often be your selected custodian. As such, this leaves those interested in investing in gold with more peace-of-mind when it comes to their financial future.
Get The Right Kind of Advice
While there are many solutions available claiming that their way is the right way, you need a professional onside who is able to make rational decisions based on the current market, and not leaving your future to chance. You should always look for a reputable custodian that has a flawless run rate (Mineweb.net – review of the best self directed ira custodians 2017) Gold can take a number of guises when it comes to securing our future, with the melt options being the most lucrative in some instances.
With this in mind, there is no real reason to paying a premium for more decorative gold pieces unless this is something you wish to undertake on a personal level. However, as the world of gold is prone to change, the right kind of custodian will be able to give advice and shed some light as to where the gold market currently stands.
There can be many benefits in investing in gold, especially when it comes to your retirement. But it’s also important to ensure we’re able to spot the risk should it arise. Ensuring you use the right kind of custodian in the first instance will ensure that your investment is protected, and that any decisions made are to your satisfaction.