Bitcoin Guide: What You Need to Know
Did you know that Bitcoin makes accounts for 66% of the entire cryptocurrency market? Bitcoin became the 8th biggest economy in the world during 2021.
More and more people are flocking to this alternative investment each year to make money. Do you know what Bitcoin is and how the currency works? Are you considering investing?
The following Bitcoin guide will explain what Bitcoin is and how to buy and sell the booming cryptocurrency. Read on to learn how you can get in on the current Bitcoin craze.
What Is Bitcoin?
Bitcoin is a decentralized digital currency that operates without intermediaries banks and governments. BTC launched in 2009 using a peer-to-peer computer network to verify purchases between users.
Governments issue, back, and regulate traditional fiat currencies like the US dollar. Bitcoin is powered through a series of networks and software that passes information between the sender and receiver.
The currency is backed by code instead of physical material such as gold or silver. The currency is decentralized but the US government considers it property and requires you to report capital gains as discussed on WealthAbility.
Bitcoin Guide To Investing
The most popular way to invest in Bitcoin is to buy it through cryptocurrency exchanges. They allow you to buy, sell and hold the cryptocurrency in your Bitcoin wallet. Buy Bitcoin using cash or by converting other cryptos to BTC.
Wallets are digital and contain a unique address for sending and receiving BTC. Coinbase and MetaMask are two examples of free wallet apps.
Bitcoin’s current value is over $56,000 but you can buy fractional amounts. Most exchanges will charge a small fee to complete a transaction.
You can hold Bitcoin as long as you want and even open retirement accounts called Bitcoin IRAs that operate similarly to traditional IRAs.
When you sell Bitcoin it converts to USD or other cryptocurrencies of your choosing. Different exchanges offer different cryptos to choose from. You can transfer funds to a linked bank account once converted to USD.
The Future of Bitcoin
Bitcoin’s value has grown by over 227,000% in less than 10 years. Many experts predict that it could increase by another 74% to $100,000 if not more in 2022.
Over 18 million Bitcoins out of 21 million coins are currently mined. It’s expected that the growing scarcity will drive demand sending the price much higher.
Several institutional investors such as Silvergate Capital are getting involved with cryptocurrency. El Salvador became the first country to accept BTC as legal tender and many other Latin American countries have shown interest.
The recent taproot update improved the functionality and utility of BTC as a legitimate currency. The update has led many to believe that more emerging markets will soon adopt the coin.
Ready To Invest in Bitcoin?
After reading our Bitcoin guide you know what bitcoin is, how it works, and how to invest. You also know that the BTC future looks bright heading into 2022. Any investment comes with risks, but Bitcoin’s potential is undeniable.
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