Bitcoin for beginners

Why the Bitcoin is regarded as the best performing currency since 2010.

You’ve seen all the headlines: “If you bought $100 worth of Bitcoin 7 years ago, you’d be sitting on $73 million now” and its many variations.

You may know someone who’s already monetising off this Bitcoin, or perhaps you’re looking to monetise some of it yourself.

Well here’s all you need to know about what is being called the best performing currency globally since 2010.

What is it?

Bitcoin is a digital currency that lives on a huge public ledger called the blockchain. However, said database does not exist in one place – instead, it is accessible to all Bitcoin users so every transaction is transparent to everyone.

‘Miners’ create Bitcoins on computers by solving mathematical functions that will reward them with coins. The value of the coins themselves is derived from exchanges between Bitcoin and conventional currencies. Non-miners can hence buy into the blockchain, which also serves as a way to cash out. To use your Bitcoins, you send them via apps and computers in exchange for goods and services much like how you would send cash digitally. An estimated 160,000 merchants now accept bitcoin payments, from webhosting services and pizzas, even manicures.

In recent years its value has soared due to popular demand. Its potential lies in its irreversibility and ease of transfers. Moreover, it is decentralised, which means all transactions (even international deals) are free from exchange rates and extra charges.

How to buy?

The easiest method is by buying it off Bitcoin Exchange that allows you to transfer your local currency to your Bitcoin “wallet” that are stored in clouds or computers. It allows buying and selling via credit or debit and is as easy as clicking on a button. There are also Bitcoin ATMs, like BTER and Coincorner, where you can change Bitcoins or cash for other cryptocurrency.

Also, it is not a must to buy a whole Bitcoin, which will cost you $4,570 (approx MYR 11,740) right now; you’re allowed to buy as small a fraction of it as you please.

What are the risks?

It has the potential to be cleaned off the slate overnight should the government crack down on it or if hackers manage to break into its system. Criminals have been known to steal from online wallets too, although that’s easily avoidable if you keep your cryptocurrency offline. Some of the most common scams to watch out for are the Ponzi scams, Bitcoin mining scams, Bitcoin exchange scams and Bitcoin wallet scams.

How much can you make?

There are those who believe that the Bitcoin bubble is one that’s soon to burst while there are others who believe it could be worth 100x more in the next few years. But thing to note is that the mathematics of the Bitcoin system were set up so that it becomes progressively difficult to mine overtime – and only 21 million Bitcoins will ever be created – so those in circulation will never devalue, so long as other economic factors remain unchanged. The biggest factor to a Bitcoin’s value is the supply and demand and as of right now, its value is still pretty volatile given that it takes very little to move the market up or down given its still relatively small market.

Its progression so far

Whether you’re skeptical or optimistic about this cryptocurrency, it’s proven to be one that has quite the sticky staying power.

January 2009: Bitcoin was first created by an anonymous individual using the alias Satoshi Nakamoto.
June 2011: WikiLeaks is the first to accept Bitcoin for donations.
February 2012: Bitcoin Magazine is launched.
June 2012: Bitcoin exchange called the Coinbase is launched.
September 2012: Bitcoin Foundation is launched.
December 2014: Microsoft starts accepting Bitcoin for game and app purchases.
January 2015: Coincase raises $75 million in venture capital funding.
August 2015: Barclays becomes the first UK high street bank to start accepting bitcoin.
August 2016: 120,000 Bitcoins gets stolen by hackers from the Bitfines exchange.
November 2016: Swiss rail operator SBB starts selling Bitcoin via its ticket machines.
April 2017: Bitcoin becomes a legal currency in Japan.
September 2017: Bitcoin broke $5,000 per coin for the first time.

(Source: www.bitcoin.org)