The word bitcoin is still not very commonplace and most people are not in the know about it. The biggest news about bitcoin is that NASDAQ, the same place you can buy stocks, will soon be offering custody services to institutional investors. This means, individual investors will soon be able to purchase bitcoin or other cryptocurrencies directly from their broker or online brokerage account.
However, before investing money in any invest, an individual should learn about the what they are investing into. Check out this simple and fun book that teaches about bitcoin for kids of every age
The purpose of this post is to provide an overview of what you need to know about bitcoin.
The truth of the matter is that bitcoin is an extremely safe and reliable, software-based online payment system. To keep things simple, we can just look at it as a form of digital currency.
Bitcoin is not a payment system but it’s actually like money. Digital money, to be exact. Just like real money, it can be exchanged for goods and services. To understand how bitcoin works, you will need to understand the components that make bitcoin what it is.
Firstly, it is digital. There is nothing to see or hold. It is not tangible like paper currency or coins.
Secondly, it is peer-to-peer based. That means you are in total control. There are no banks, third parties or intermediaries to take a chunk of your bitcoin as fees. You send your bitcoin directly to the person you want it to go to. This is one factor that is seeing the rise in popularity of bitcoin.
Thirdly, bitcoin is not controlled by any one bank or financial institution. It is decentralized and run by a group of people worldwide. We live in a day and age where people want more freedom and wish to break away from the shackles of the top 1%. Bitcoin is a symbol of that freedom.
Fourthly, pseudonyms are used with bitcoin transactions ensuring ultimate privacy. This again makes this method of payment very popular with people who do not want others to know their financial transactions. The transactions are viewable but all you’ll see are a bunch of numbers and alphabets that really make no sense.
Lastly, the movement of bitcoin is protected by top of the line cryptography that ensures the digital currency is secure and can’t be abused by criminals.
Bitcoin has seen increased growth and merchants are slowly starting to accept it as a digital currency so that they can cut costs on fees imposed by payment processors. Bitcoin still has some ways to go as far as becoming accepted like traditional currency. Nevertheless, as trends indicate, it is on its way there.
