Over the last couple of years, Bitcoin has become increasingly popular, and at time of writing, is one of the most globally searched keywords on Google!
how does it work?
how do i get my own bitcoin?
At the time of writing, one whole Bitcoin is worth £11,211.25. However, you can buy a part of a Bitcoin known as a 'Bit'. For example, if you wanted £10 worth of Bitcoin, you would have 0.000891961 Bitcoin.
You can purchase Bitcoin through a Bitcoin exchange, such as Blockchain or Coinbase. Different sites offer different exchange rates and fees, just like an foreign money exchange, and buyers will usually need to provide ID and verify their account before they can buy or sell.
Alternatively, you can 'mine your own part of a Bitcoin. To do this, you need some serious computing power, some software and to join a mining bitcoin pool. Whilst it might seem a reasonably effective way to earn your Bitcoin, the electrical energy you require is probably going to be more expensive than the value of your Bitcoin unless you have a proper setup!
Where do I store my bitcoins?
Because Bitcoin is a virtual currency, once you own the currency, you have nothing physically to show for it.
Once you own Bitcoin, it is stored as a private key, which is a series of numbers and letters. To store your private key, you require a Bitcoin wallet.
Your Bitcoin wallet is a collection of your private keys, and can usually be stored on an online digital wallet.
How do I keep My Bitcoin Safe?
Consider signing up to a Coinbase; they offer 2 step verification and also uses google authenticator to add another layer of security. We recommend a great password - we have even written a post on this previously.
can my bitcoin be stolen?
Although Bitcoin is designed to be secure, this has not stopped high profiles losses of Bitcoin.
The problem itself is not with the blockchain itself, but the way you choose to secure it.
Bitcoins can be stolen by a number of methods:
will it make me rich?
If you purchased Bitcoin in 2009 when it was first issued, you will have seen an incredible return on investment.
However, with more and more people keen to try and make their own quick buck, the Bitcoin currency is so volatile. It has been known for the value to change up to 25% within a 24 hour period.
Trying to profit with Bitcoin is incredibly high risk, and opinion between experts is split.
should i buy it?
The concept behind cryptocurrency like Bitcoin is fascinating, and has already been touted as the future behind improving the way we do 'transactions' online.
However, nobody is sure if the blockchain system behind cryptocurrency will transform the financial industry.
It's not wise to invest your life savings in the hope of making money quick, but it is an interesting concept which may transform the future.