Bitcoin is a new type of cryptocurrency enabling you to shop online as well as in increasingly more brick-and-mortar establishments without the use of physical cash or even a traceable bank account.
Bitcoin exists only in its virtual form through trading websites like Coinbox. It is kept in virtual wallets and has no real-world equivalent such as coins or gold. Thus its value is dependent entirely of what others are willing to trade for it. As such its value is highly volatile, but compared to other currencies it is more likely to remain in circulation since its anonymous nature is the ideal currency for people wishing to make anonymous purchases, including those of a possibly not-quite legal nature.
Upon its initial release, the only way in buying Bitcoins was to directly ‘mine’ for them using a specialized computer set-up. This has become a very difficult task as it requires a lot of computer processing power. In many cases it was easier to lose money mining for Bitcoin than to make money, as most of the investment would be lost on the electricity needed to power the mining computers. The best way to get your hands on Bitcoins is to buy them or simply work for them.
Bitcoins can be bought in exchange for other cryptocurrencies that are easier mined, like Dogecoin or Litecoin, or simply bought with regular cash. But no matter the method, is there a chance of losing money?
As it stands, there is no way of knowing what the value of Bitcoin will be at any given time or even predict its value in the future. It may fall to just a few hundred dollars at a moment’s notice, or it may as well rocket upwards to well over a thousand dollars. As it is impossible to know its coming value, short-term trading is difficult as one can not establish the cost of the trade process via a network of wallets.
This however does not make Bitcoin trading a pointless endeavour. Despite a massive recent crash, Bitcoin values have remained robust and maintained a certain stability. Purchasing it at a low price and selling it at a higher one is still a good option – as is using the Bitcoins like any other currency to make purchases. It is nowadays even possibly in some places like airports to buy smaller Bitcoin amount with loose change in foreign currencies. While this a great way to get your hands on some Bitcoin fractions, it is not really the best way to begin a Bitcoin investment.
For bigger purchases of the currency, Coinbase may be you best option. Coinbase is an online Bitcoin wallet that can be accessed and backed up from really any location, making it a safer option than keeping a file in your computer. Because you need to remember: a failure on the part of of your computer may cause the loss of all of the information on your hard drive, including the Bitcoins — the same way you could lose all your money when losing a real-life wallet.