Bitcoin is the world’s most popular and widely used cryptocurrency, with anywhere from 300,000 to 500,000 transactions per day. Bitcoin is also the very first cryptocurrency, created in 2009 by the anonymous person or group Satoshi Nakamoto as a decentralized digital currency that allows for peer to peer transactions without a central authority or intermediary. Since Bitcoin’s inception, it has grown in popularity and is now a legal alternative to fiat currency in several countries.
Bitcoin is notorious for its wide price fluctuations, and although it has a historically upward trajectory, many people have lost huge amounts of money investing in the first crypto – and many others have become millionaires and billionaires. Bitcoin isn’t rocket science, though it is important to have a foundational understanding of the crypto, and its underlying technology, if you want to succeed in the new decentralized sector. This is a simple guide to understanding Bitcoin and how to use it.
What Is Bitcoin
Bitcoin is a decentralized currency that operates on a blockchain network. Unlike traditional currencies, Bitcoin is not controlled or printed by a central bank and operates outside of governmental jurisdiction. Bitcoin is mined by very powerful computers that solve mathematical equations, and there is a maximum limit of 21 million Bitcoins. There is still a ways to go until all 21 million Bitcoin have been mined, or created, and because of this cap Bitcoin is less prone to inflation.
Bitcoin is currently accepted as legal tender in a small handful of countries, and outright banned in others. The future of Bitcoin is still not fully certain, though many proponents of the digital currency are adamant that Bitcoin is the future of monetary transactions.
Setting Up A Wallet
To start using Bitcoin, you will need to set up a digital wallet. A digital wallet is a software program that allows you to securely store and access your cryptocurrencies – Bitcoin and otherwise. When you sign up for an exchange, such as Coinbase, a digital wallet will be created as part of your account, allowing you to access that wallet from anywhere in the world, so long as you have access to your account.
Buying Bitcoin is an investment, and like any investment, carries risk. Bitcoin especially is notorious for its level of risk as it has a long history of large price fluctuations. Nevertheless, if you choose to buy Bitcoin, you can do so on any number of crypto exchanges.
Buying existing Bitcoin isn’t the only way to fill your digital wallet with the digital currency. Many opt for mining Bitcoin, which not only adds new currency onto the blockchain network, but rewards the miner with crypto. In the early days of Bitcoin, mining was easier and could be done with a personal computer. As more and more Bitcoins have been mined, and as more and more miners have entered the network mining has become increasingly difficult. It now required immense amounts of electricity and high powered computers.
0 Percent has created its Cryptocurrency Income Accelerator (CIA) program, which allows you to start mining your own crypto without having to set up a mining facility yourself. We’ve done all the legwork for you, and when you sign up for the CIA, you actually own the mining equipment you use, which usually has a 5-7 year lifetime appreciation. If you would like to learn more about our CIA program and start crypto mining today, click here!
Transacting With Bitcoin
While the tax implications of Bitcoin are relatively uncertain, and are different in every country, in the United States Bitcoin is generally considered as property for taxable purposes, and is taxed via capital gains. It is important to note that although Bitcoin is decentralized, it is not anonymous, as the blockchain network on which Bitcoin operates is public and transparent.
The tax treatment of cryptocurrencies is still evolving, and as governments and regulatory bodies give further clarification on crypto, the information in this article may change.
Bitcoin is the most popular global digital currency, and will likely remain so for a very long time. While a relatively high risk investment, Bitcoin has in fact shown a historically successful price trajectory over the long-term, and remains the most high-value cryptocurrency in existence.
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