Ken Nairne: What Is Bitcoin/Crypto Currency? 3 Ways to Invest in Bitcoin/Crypto Currency…

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Sunday, 3 September 2017

What Is Bitcoin/Crypto Currency? 3 Ways to Invest in Bitcoin/Crypto Currency…


What Is Bitcoin/Crypto Currency? 3 Ways to Invest in Bitcoin/Crypto Currency…

Bitcoin is basically another form of digital currency used mainly for shopping online. It was published back in 2008 by someone going by the name of Satoshi Nakamoto (not sure if the name is real) to a cryptography mailing list in a research paper called "Bitcoin". Bitcoin is a Peer to Peer Electronic Cash Machine.

Bitcoin is not like other Fiat currencies, it is created and held electronically, and it is controlled by the people and not by a centralised banking system. You cannot print it like the UK pound or the US dollar! Bitcoins are produced by people and businesses worldwide using computers and software that solves mathematical problems.

Bitcoin is the first digital currency know as crypto currency. It is different from other fiat currencies in the sense that it decentralised and are not controlled by any one single institution. It can be used to buy things online in the same way as you would buy with conventional fiat currencies.

Because bitcoins are decentralised and is used electronically, it put most people at ease because it means no large banks control their money.

How Is Bitcoin Mined?

On like in the traditional fiat money system where government just print money whenever they need to, bitcoin is digital and cannot be printed in the same way. It also doesn't have a central government to control it.

Bitcoin miners use computers and special software to solve math problems. They are then issue through a certain number of exchanges and bitcoin wallets. This also makes bitcoin much more secure than conventional money.

Bitcoin miners help keep the bitcoin network secure by approving transactions. Mining is very important in the bitcon network because it ensures fairness while keeping stability in the network and, keeping it safe and secure.

What Is Bitcoin Based On?

Back in the early years up until 1972 conventional currency was based on gold or silver, which means if you were to hand over a dollar at your bank you could exchange it for some gold. Which of course didn't really work in practice. Bitcoin isn't based on gold or silver, it is based on mathematics.

Thousands of people and businesses worldwide are using computers and software programs that follows a certain mathematical formula to produce bitcoins. This formula is freely available to anyone who wishes to mine bitcoin.

What Sets Bitcoin Apart from Ordinary Currencies?

1. It is decentralised - which means it is not controlled by one central authority. Every computer that mines and process bitcoin makes up a part of the bitcoin network and they all work together. Which also means, in theory central governments and large banking institutions cannot messed with monetary policies like with normal currencies and cause a meltdown, or even try and take your hard-earned bitcoins away from you.

2. It is also very easy to set up unlike normal bank account which can take ages to set up and requires a load of security paperwork. With bitcoin, you can set up a bitcoin wallet address in seconds. No questions asked and no fees to pay.

3 It's also anonymous in the sense that you can hold several bitcoins addresses which are not linked to your name, home address or any other personal identifying information. It is also transparent which means, bitcoin will store details of all transactions that are made via the network in a large ledger called "Blockchain".

All publicly used bitcoin address will show how many bitcoins are stored at that address, but does not show who the bitcoins are for. Always keep your bitcoin address away from prying eyes. The only way someone can get to your bitcoins is if they know your bitcoin wallet address.

4. It is also very fast to send bitcoin from one country to another unlike conventional bank. You can send money to families or friends in a different country and it will reach them in minutes. The fees are also minimal compare to other banks or online processors.

You must however, make sure that the address you send the bitcoins to are correct as if you send it to the wrong bitcoin address you won't get your funds back.

Other Crypto Currencies:


Bitcoin was the first in the crypto currency chain and is still the mother of all crypto currencies, however, since bitcoin creation there are thousands of other crypto currencies arriving on the market. To date I believe there are over 9 thousand different crypto currencies on the market. These are call "AltCoins" (Alternative Coins). Name so as they are alternative to bitcoin.

Without bitcoin however, you won't be able to use these coins for normal transaction like you can with bitcoin (not yet anyway) as they are not yet recognised by merchants as currencies as with bitcoin. Also like the dollar which was based on Gold, these AltCoins are based on Bitcoin to get their value. Without bitcoin, they are worthless.

You can now buy and trade bitcoin/crypto currencies as you can with fiat currencies. You will however, need to find and register with an exchange broker just as you would with Forex trading.  These currencies trade against each other but not yet with fiat currencies. There are several of these exchanges online that you can look up. Please do your homework first before registering for any of these exchanges. There are good and bad ones out there.

3 Ways to Invest in Bitcoin/Crypto Currency:

There are 3 main ways to invest in bitcoin and I will describe each one separately below.

Even though bitcoin really been around since 2009 it is still a baby where currencies are concerned. If you were thinking of investing in these currencies, now is the right time. Thousands around the world have already made millions from investing in bitcoin. You too now have, the opportunity to join them. You may not make millions, but you can surely create a very good monthly income from them.

1. Buy Bitcoin and Hold Them:

The first way to invest in bitcoin is to buy them and hold them as you would in say your savings account. Most of the many who have already become millionaires from investing in bitcoin did so this way. They bought bitcoins when it was very cheap and kept a hold of them. Some, however, cashed in far too early and lost out. If I had bought bitcoin back then when I first heard of it, I too probably would have cashed out early thinking that it may never get any further. Would have been a big mistake, but I wouldn't have known any better. Now thought as bitcoin and other AltCoins become popular, we now know that buying bitcoin and other crypto currencies and holding them for say our retirement funds is a wise thing to do.

Before you can buy bitcoins, you will need to get yourself a bitcoin wallet.


What are bitcoin wallets?

Basically, bitcoin wallets are like an online bank account. They allow you to receive and store bitcoins and other altcoins. They also allow you to send them to other people globally.

There Are Two Types of Wallets:

1. Software wallet - A software wallet is a wallet that you install on your computer or your mobile device. With this type of wallet, you are totally in control over the security of your bitcoins. Some of them are however, sometimes a little awkward to install and maintain.

2. Web Wallets or Hosted Wallets: There are several of these web wallets available such as "Coinbase" "Xapo" "Blockchain" and many more. You will need to google "web Wallets" to find one that operates in your country. These are wallets that are hosted online by a third party and are often easier to use that Software Wallets. The only drawback to these wallets is that you will have to trust the providers to maintain a high level of security for your bitcoins.

I mainly use Coinbase but sometimes use Xapo and Blockchain. Coinbase is a very simple design with a number of useful features which are ideal for beginners alike. At present coinbase only deals in Bitcoin, Ethereum and LiteCoin, possible more in the future. They are very picky on what coins the deals with especially for their creditors.

Coinbase allows you to send and receive bitcoins to anyone worldwide using a special address. You must however, ensure that you use the correct address so the coins go to the right person. They also allow you to buy and sell bitcoin directly from your account.

I use coinbase mostly because they have a proven track record for high security and are one of the only larger bitcoin wallet that so far haven't suffer from a major hack.

Click here to register for coinbase. 

2. Trade Bitcoin/Crypto Currency:


Trading bitcoins/crypto currencies is another way of investing in these coins. To trade these coins, you will need to register with one of the many crypto currency trading exchange platforms. They trade in the same way as other exchanges trade Foreign Exchanges (Forex) with fiat money. There are several of these exchanges to choose from but the only two that I will recommend are Bittrex and Poloniex. These are the top two that many traders will recommend also.

I won't go into them here as you can google them individually and learn all about them. My aim here is to give you investment options.

These exchanges allow you to buy and sell crypto currencies in the same way as you can with coinbase or xapo. The only difference is that you get more currencies to choose from here. You can buy and hold your coins as you can in coinbase, however, you run the risk of these going offline or taken down. My advice is to use them to buy your coins but save them in your software or hardware wallet. It is much safer this way.

Trading crypto currencies are very risky and you will want to seriously think twice if you don't understand trading. You also have the emotion that goes with any trading. You can take your money out too early and lose out of a higher profit margin or, you can leave it in thinking that you can make a bit more profit when it suddenly drops back and you lose everything. If you're not sure about trading yourself, do as I do and register for a professional broker that will do the trading for you. All you do is invest your money and let them do the hard work and you just collect your daily profit.

There are a lots of these programs (brokerage) to choose from, and they all have their advantages and disadvantages. The one that I am personally recommending now is "Cryp Trade Capital". Their returns are not as high as others but I believe they are the safest for my money. You can earn between 0.57% to 0.99% per day which I personally believe is a great return for your investment, when you consider what you would be getting from your bank. They are also very transparent which is what you want especially when you are investing a lot of your hard earn cash in it. I believe in Cryp Trade Capital, but you are welcome to do your research and find others that may suit you.

Click here to register for Cryp Trade Capital...

3. Mine Bitcoin/AltCoins


The third way to invest in bitcoin and altcoins is through mining. Me personally are doing all three but mining is my preferred option as you earn bitcoin every day, and the earnings go straight to my coinbase account, no need to do any withdrawal.

What is bitcoin mining?

Bitcoin mining is a decentralised computational process which serves two purposes.

1. It confirms transaction in a more trustful fashion when enough effort is devoted to block.

2. It creates new bitcoins in each block.

How Bitcoin Mining Is Done.

Unlike gold mining where you use pick axe and shovels (the old days) With Bitcoin mining, miners use special software to solve math problems and for that they are issued a certain number of bitcoins in return.

Bitcoin miners helps keep the network secure by approving every bitcoin transaction. Mining is an important part of bitcoin which ensures fairness while keeping the network stable safe and secure.

There are two ways to mine bitcoin.

1. You can become a bitcoin miner by purchasing all the gears and set it up yourself which can cost a lot of money and time, not to mention your electricity bill. This form of mining can use up a lot of electric which adds to your monthly bill. They are also very noisy so you would have to have them and a sound proof environment. Also because of the bitcoin difficulty rate, more and more small-time miners are getting pushed out by the bigger companies who have large funds to build much bigger mining farms.

2. The other way to mine bicoin (and this is the way I'm mining coins) is cloud mining. This is where you purchase HashRates via a larger company with all the equipment’s and in return you share the profits. This however, is a much riskier way to mine as you have no control over the physical hardware. It is a much simpler way to mine bitcoins and altcoins though.

There are several cloud mining companies to choose from, however, the two largest are Hashflare and Genesis. You can google both to see which one suits you best. I do all my mining through a company name "Swiss Gold Global" who uses the Genesis platform. Why do I use SGG instead of Genesis? The reason is because Swiss Gold Global are not only mining cryptocurrencies, they are mainly a precious metal supplier and I also buy gold and silver. Now I can buy both gold and silver from SGG using my Bitcoin earnings. Genesis only mine cryptocurrencies and that's it. Plus, SGG has been around for several years now and are very trust worthy.

You can learn loads more about Bitcoin mining by googling it.

Click here to learn more about Swiss Gold Global.

Well, that's it for me. You can learn so much more about bitcoin and the future of crypto currency by googling them. I would urge you to do more of your own research as there are so much more to learn out there.

If you like what you read here, please share it on Facebook and Twitter with your friends. Thanks.

Disclaimer:

This article is not meant to give you investment advice as I am not a qualified investment adviser nor I’m I a money expert. This is just to give you an insight in bitcoin and the future of crypto currency and some recommendation on where you can go to invest in bitcoins. I would advise you to seek expert advice before you enter into any investment market. 




Ken Nairne

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