So, you’ve read about and listened to your friends and colleagues talk about Bitcoin and the massive returns is has been providing some people.
But what is Bitcoin? How do you invest in Bitcoin? How do you buy and sell Bitcoin and other cryptocurrencies?
It’s easy, just buy and sell bitcoins at coinbase
What is Bitcoin and cryptocurrencies?
Bitcoin and cryptocurrencies are alternatives to traditional currencies (like dollars, pounds, euros, rubles and pesos). Traditional currencies were issued by central government banks and were once linked to real value such as reserves of gold bars. These days traditional currencies are not based on reserves of gold and are mostly valued on what the financial markets think they are worth.
Bitcoin and cryptocurrencies are alternative currencies created by mathematicians that use complex mathematics to create an encrypted public ledger (instead of using a bank) to record all cryptocurrency transactions. Software called miners solve complex mathematical problems to record cryptocurrency transactions on the ledger (called a blockchain) and are rewarded with some cryptocurrency as a transaction fee. Miners also solve complex mathematical problems to create new crypto coins.
So, instead of being based on reserves of gold bars, the value of cryptocurrency is based on:
- the value of work done by miners to find new crypto coins and record transactions on the ledger (blockchain)
- the speculative value of what the market (and investors) think they are worth.
How do you invest in Bitcoin? How do you buy and sell Bitcoin and other cryptocurrencies?
When Bitcoin and cryptocurrencies were first created, you got Bitcoins by selling goods or services online in return for payment in Bitcoins. You could then buy goods or services online with your Bitcoins.
These days it’s a lot easier to get Bitcoins as companies have set up cryptocurrency exchanges were you can buy Bitcoins with traditional currencies and also trade between different types of cryptocurrencies.
So, if you want to invest in, buy or sell crytocurrencies, the easiest and safest way is find and sign up with a reputable Bitcoin Exchange (or cryptocurrency exchange). These exchanges let you convert money to Bitcoin, transfer to your own secure wallet and also sell Bitcoin to convert back to money.
One of the most well known cryptocurrency exchanges is Coinbase which is particularly suitable for people in North America.