The media has been buzzing about the revolutionary digital currency called Bitcoin. Many people wonder if they should buy some or even try to start their own cryptocurrency.
If you’re in this camp, plenty of people would say yes- especially after its massive surge in popularity over the past few years.
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But before you make that decision, it’s helpful to know exactly what Bitcoin is and why it’s so popular with some investors these days.
Here’s what you need to know about Bitcoin before you consider buying any for yourself.
What is Bitcoin?
Bitcoins are a form of digital currency, also known as crypto exchange website, which can be used to purchase goods and services online or in-person without any need for bank or credit card information forex platform back office.
The coins are self-contained wallets that allow users to send money directly to one another, anonymously or securely. No financial institution in between, no Visa or MasterCard bank account needed.
That’s because Bitcoins bypass banks and other institutions through a technology called the blockchain. Blockchain allows Bitcoin transactions to be recorded publicly on computers around the world, making fraud nearly impossible.
This revolutionary currency has spurred intense media attention from techies and investors alike; it makes sense: Some enthusiasts have turned small investments into thousands of dollars in short amounts of time with just a little research and trading savvy.
Bitcoin in the News
It’s worth noting that bitcoin isn’t necessarily anything new. It just became popular recently because of a media blitz and some technological developments that make it more viable than ever before.
Why is Bitcoin So Hard to Value?
The total value of all bitcoins ever mined is more than 18,925,000 bitcoin. But because no one really knows what it should be worth, and because Bitcoin has only been around since 2009, people struggle to make sense of it and figure out whether it’s a good investment.
It doesn’t help that people in Silicon Valley are obsessed with Bitcoin right now; any technology that makes billionaires overnight can get a bit of a hype cycle going, especially if there aren’t a lot of reliable references you can use to figure out whether something has real-world application or not.
How Much Is One Bitcoin Worth?
Because its value isn’t tied to anything tangible like gold or silver, it’s impossible to say exactly how much a single bitcoin is worth. You could say that each coin has an intrinsic value based on its utility as a currency.
Still, then you’d have to account for how good each coin actually is. Right now, for example, most merchants don’t accept Bitcoins as payment (though some do).
How much does it cost to buy one bitcoin? Well it depends on how much someone else will pay for them. And that leads us back into speculation territory:
How much would someone pay for something they think will be valuable in the future? That’s what we mean when we talk about Bitcoin’s price.
How Do I Buy Bitcoin?
You can buy bitcoins directly from other people using online marketplaces, no different than any other product or service.
Alternatively, you can also use a digital currency exchange or brokers such as Coinbase, Bitstamp, and Kraken to convert bitcoins into dollars and vice versa.
The current market price of bitcoin changes every second; check XE for up-to-the-minute rates if you want to get started investing in bitcoins today.