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Everything you need to know about Bitcoin

Posted by Community Choice Credit Union on May 31, 2017 12:29:04 PM

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If you’ve been paying attention to the news lately, you’ve probably heard about Bitcoin and its record-breaking value. That’s for good reason, too. This month, Bitcoin’s valued has doubled – yes, the electronic currency company has doubled its worth in less than 30 days. This is making Bitcoin a hot topic for many investors and has many of us wondering, what is Bitcoin? Well, wonder no more! We have the answers to all of your Bitcoin questions and tips on whether or not you should invest.

What is Bitcoin?

Simply put, Bitcoin is electronic money or digital currency. This digital currency was created as a solution to keeping cash. It is viewed as a safer alternative to cash because it can’t be stolen, is not linked to any of your personal information and is only controlled by the two parties involved in making a transaction. As digital currency, Bitcoin users also have the ability to process foreign transactions without incurring long waiting periods or international service fees.

How does it work?

Bitcoin works similar to a credit card. While no physical money exchanges hands between two parties, the transaction is recorded and tracked digitally. Bitcoin isn’t backed by any central banks, but more and more companies are beginning to accept this digital currency as a payment method. To use Bitcoin all you need is a smartphone or internet access. From your computer or smartphone, you can then download the Bitcoin Wallet from the Bitcoin website and register for an account. From here, you’ll receive a length alphanumeric code that you’ll use to make payments with bitcoins or receive bitcoins. Your Bitcoin account is password protected and can only accessed using your private key. 

Why is everyone so interested in Bitcoin?

The creator of Bitcoin, Satoshi Makamoto, programmed Bitcoin so that only a certain percentage of the currency is released into the market every two years. In order for the next batch of Bitcoin to be released, someone has to mine the equations put in place by Makamoto. Yes, a math genius has to crack the Bitcoin coin for more to be released into the market. This makes Bitcoin eerily similar to gold, which is why investors believe the value of Bitcoin will continue to increase. Unlike paper currency, there are limitations to the amount of Bitcoin that will be released. Year 2140 is the last year new Bitcoin will be released to the public. This makes this digital currency a limited commodity, which will help increase its value overtime.

Is Bitcoin legal?

Yes! Bitcoin is becoming a widely accepted form of payments for many companies all over the world.

Where can you buy Bitcoin?

There’s a Bitcoin exchange where bitcoins are traded for cash. You can create an account of Bitcoin’s exchange website and link it to your bank account. The price of Bitcoin is driven by market demand and right now, one bitcoin is estimated to cost $1,200.

Should you invest in Bitcoin?

Many people are investing in Bitcoin right now. Which is expected since Bitcoin is growing at an unprecedented rate—faster than Apple and Amazon when they launched! Since it is currently being traded at an all-time, Bitcoin is a hot stock for many investors, but it’s a risky investment. While the adoption rate is increasing and more merchants are beginning to accept this digital currency as a payment method, there’s a chance that Bitcoin can never reach a mainstream status of acceptable currency and you could get stuck with a pile of useless, digital currency.

Topics: investing, bitcoin, digital currency

Links to third party sites are not owned or operated by Community Choice Credit Union. We are offering the link for your convenience and have no responsibility for the availability, accuracy, or content of this website, its products or services. We encourage you to review their privacy and security policies which may differ from Community Choice Credit Union.

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