Bitcoin is the world’s first decentralized digital currency and online payment system, which allows users to conduct transactions without the need of any third party intermediary (banks for example). It is one of the cryptocurrencies.
Bitcoin, which is the name given to one unit of the virtual currency, can be divided further into subunits (similar to cents and pennies), the smallest of which is referred to as a satoshi (one hundred millionth of a bitcoin). The bitcoin protocol and reference software (free and open-source), which works on any computer or smart phone, was developed from the one that had been introduced in 2008 by pseudonymous inventor known as Satoshi Nakamoto.
The money is verified by cryptography thereby making it difficult to copy. To start utilizing bitcoin, a client can pursue a free record with any of the bitcoin wallet suppliers (Blockchain.info and Coinbase are the well known ones). When joined, a novel 34-character address (a blend of letters and numbers) is doled out to the client. On the other hand, for better security, a client can download an appropriate wallet and store the bitcoins disconnected (so called cold capacity).
All exchanges between the bitcoin clients are confirmed by system hubs and recorded in open shared record alluded to as the square chain. A record of every exchange is appeared in the log of the client also. In this manner, an exchange initiates just if there is spendable equalization in the wallet. The bitcoin installment framework utilizes a seed or a private key to keep criminals from taking the coins from the wallets and to anticipate misfortune or duplication of the coins in the square chain.
The way toward affirming the exchanges (more often than not starts in 10 minutes) or record-keeping administration is called mining. The PCs associated with such a procedure are known as the system hubs. There is a top of 21 million bitcoins that would be ever made (through remuneration for the mining procedure). The rate of creation parts like clockwork until the top is come to.
There are four ways of acquiring bitcoins:
- Mining process.
- Sell goods or services for bitcoin.
- For cash or local bank transfer via LocalBitcoins.com.
- Public exchanges and brokers (IQ Option, Bitfinex (or Ethfinex of you are serious about trading), Bitstamp, etc.)
- Exchange services (CoinMama, ALFAcashier, SuperChange, etc.)
Advantages over other forms of payment systems:
- No government or central bank has direct control. All other payment systems (Neteller, WebMoney, Skrill, PayPal, etc.) are directly influenced by the decisions of governments. The closedown of Liberty Reserve is a well-known example.
- No obligatory usage fees. Fees are optional and are paid by the sending party to speed up transaction confirmation. All centralized payment systems charge a fixed percentage of the transaction value as a service commission.
- Totally anonymous. Transactions through any other payment processor can be easily traced.
- No identity theft. Identity verification is mostly a must for other forms of payment systems.
- Conversion to fiat currencies is possible in a transparent manner through exchanges. In case of other electronic payment systems, the service operator determines the conversion rate.
- Bitcoin does not face the issue of counterfeit or deliberate devaluation.
- Price is highly volatile. A movement of 10% or more against the US dollar in a single day is not uncommon.
- Limited supply and liquidity.
- Facilitates illegal activities because of anonymity. The underground website Silk Road, taken down by FBI, is a classic example.
- Highly susceptible to rumors.
Here are some picks from the list of the Forex brokers working with Bitcoin:
- IQ Option
You may also want to consider a possibility of getting almost passive income through margin lending investment.