What you need to know:
Bitcoin price is currently 9,315.36 US Dollars per BTC (or Bitcoin).
Bitcoin (BTC) is a decentralized cryptocurrency payment system designed by Satoshi Nakamoto. The software-based currency was released to the public in 2009. Since then, updates and improvements have been made by a network of developers, partially funded by the Bitcoin Foundation.
Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part in it. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system. That’s one of the exciting things about Bitcoin.
Well, if you are considering of investing in bitcoin it’s important you fully understand what bitcoin is all about, how to get bitcoin wallet (for storing it, sending to buyers, and receiving from sellers), where to buy and sell bitcoin, its volatile nature, and finally understand the possible risks involved ( Yes, you read that, risks! No business is without risks. But trust me, it’s still preferable).
So, let’s start by explaining bitcoin.
Bitcoin is a form of digital currency, created and held electronically. The good thing about Bitcoin is that it’s decentralized. That means no one controls it, like individuals, or even central authorities like banks, governments, or corporations. Moreover, Bitcoins aren’t printed, like Naira, dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems. It’s the first example of a growing category of money known as cryptocurrency.
How does bitcoin work?
Bitcoin is powered by a technology called blockchain which is a public ledger that records every bitcoin transactions and visible using a tool called blockexplorer by searching for bitcoin address or transactions id. Bitcoin is secure and anonymous because personal information is not associated with bitcoin and due to its advanced technology Bitcoins can’t be counterfeited with only 25 million ever been created.
Sending and receiving bitcoin works very similar to email, you only need the address of the person you want to send the bitcoin to, no need for names & addresses. Bitcoin is very fast, and while your bank may charge you huge in international transfers using payment methods like Moneygram or western union, Bitcoin doesn’t. Its charge is small, say $0.02 or 3.98 to other countries from your local country.
Bitcoin Wallet: What it is and how you can get it
As an investor, to get started with Bitcoin, you need to create a bitcoin wallet.
Bitcoin wallet is a place that you store, receive and send bitcoins. Unlike banks, bitcoin wallet gives you full control over your bitcoins. This means no third party can freeze or lose your funds.
You can get bitcoin wallet on your mobile phones, computers, hardware or paper wallet and online wallet.
Just like email that has different providers ( Gmail, Yahoo, etc), you can choose which bitcoin wallet provider you like, but I recommend Blockchain. It’s very popular and used by 85% of bitcoin users. However, you can check here (www.bitcoin.org) to select your choice of bitcoin wallet provider.
How to create a bitcoin wallet from Blockchain
For Android users you can download bitcoin app from Google Play Store, simply type “Blockchain” from the search box to download it, sign up with your email and ready to trade bitcoin.
You can still sign up by visiting their site at Blockchain.info. It’s very easy to do and Blockchain doesn’t charge any fee for registration.
So now that you have gotten your bitcoin wallet, the next thing to do is to buy bitcoin, and of course, sell it later.
What is Bitcoin mining? Where to buy and sell bitcoin?
In your journey as a bitcoin trader, you will definitely hear about bitcoin mining. In traditional fiat money systems, governments simply print more money when they need to. But in bitcoin, money isn’t printed at all – it is discovered. Computers around the world ‘mine’ for coins by competing with each other.
How does mining take place?
People are sending bitcoins to each other over the bitcoin network all the time, but unless someone keeps a record of all these transactions, no-one would be able to keep track of who had paid what. The bitcoin network deals with this by collecting all of the transactions made during a set period into a list, called a block. It’s the miners’ job to confirm those transactions and write them into a general ledger.
However, mining bitcoins is very hard to do nowadays because a lot of people with bigger commuting powers are generating bitcoins faster than regular computers. The best to do is to buy and sell and make your cool cash.
Where to buy and sell bitcoin?
As a Nigerian, the best place to buy bitcoin is an online bitcoin exchange, NairaEx (nairaex.com).
NairaEx is a bitcoin exchange based in Nigeria that offers low trading, zero deposit and withdrawal fees. You can buy bitcoins thereby choosing the number of bitcoin you want and the price is automatically calculated, deposit the sum in Naira into their bank account in Nigeria, and after confirmation of your payment, your bitcoin will be sent to you. Also, you can sell bitcoin in NairaEx and withdraw Naira directly to any Nigerian banks. Also, you can exchange perfect money, webmoney to bitcoin there.
Another place to trade bitcoin is a site called LocalBitcoin.com based in Finland. Localbitcoin matches buyers and sellers online and in-person, locally worldwide. It’s widely used by many people all over the world. Coinbase.com is another great place.
WHERE CAN YOU SPEND BITCOIN?
The number of companies accepting bitcoin payments has increased over the last few years. Microsoft and travel website Expedia both take bitcoin. Retailers in Japan can now accept bitcoin payments thanks to a new law passed last year, and small businesses can accept bitcoin payments through simple plugins that add to WordPress websites.
You can also use Bitcoin to pay for website domains, buy goods online, etc. There are just many things to do with Bitcoin. Sooner or later many educational institutions will join in accepting Bitcoin for school fees payment as there are some schools already accepting this form of payment.
The volatile nature of Bitcoin and risks
In 2017, Bitcoin’s value soared from $1,000 to just under $20,000 before dropping down to around $13,000 at the end of the year. Since then, its value has risen and dropped sporadically from day to day, dragging smaller cryptocurrencies like Ether and Ripple along with it.
For instance, at the time of writing this article bitcoin price has increased by around $400 over the past 24 hours, entering the $9,000 region and surpassing $9,200. On April 27 (2018), bitcoin experienced a sudden dip in price that sent it to the $8,800 mark. Throughout today, bitcoin and the rest of the market recorded strong gains as the valuation of the market rose to $420 billion.
If you’re new to cryptocurrencies, this kind of volatility can be dizzying (and painful if you invest at the wrong time), but if you take a closer look it starts to make sense.
Here’s why Bitcoin’s price keeps changing so drastically, and why it may get more stable in the future.
1. Bitcoin is still in its nascent stage
Bitcoin was first released in 2009, but it only really gained mainstream popularity in 2017. The technology is still extremely new and misunderstood, and that’s a big part of why its value is so hard to pin down
The price of Bitcoin can also change drastically as countries and financial institutions adapt to the idea of cryptocurrency. For example, when one of South Korea’s biggest banks tested out the technology it caused a spike in value. On the other hand, when China announced plans to crack down on sketchy Initial Coin Offerings (ICOs) the value of Bitcoin dropped, and the same thing happened when a South Korean government official said the country might ban cryptocurrencies altogether.
2. Little option value to large holders of the currency
Bitcoin volatility is also to an extent driven by holders of large proportions of the total outstanding float of the currency. For Bitcoin investors with current holdings above around $10M, it is not clear how they would liquidate a position that large into a fiat position without severely moving the market. Since Bitcoin’s volume resembles a small cap stock, the currency has not hit the mass market adoption rates that would be necessary to provide option value to large holders of the currency. (Source: Investopedia.)
How Bitcoin Could Become More Stable
The best bet for Bitcoin is that as it becomes more popular and more people buy it, these types of changes in value will go down for two main reasons. First, individual owners have less power over the price of Bitcoin, and, second, it creates stability since more people have a stake in the cryptocurrency.
The other possibility is that government regulation could help stabilize Bitcoin. In the short term, that could cause its value to drop drastically (like what happened in China and South Korea), but in the future, it could help calm down speculation and drive out the types of sketchy Bitcoin-related business that threatens to drag down the entire concept of cryptocurrencies.
In conclusion, bitcoin is still a good business to throw your cash into. It has a great return if you are very watchful so you will know when to buy at a cheaper rate and sell at a higher rate.
I hope this explanation helps. If so kindly share.
Thanks for your time.