Five things every layperson should know about Bitcoin (BTC)

Five things every layperson should know about Bitcoin (BTC)

Number of unique daily bitcoin (BTC) wallet addresses reaches 1 million

There are still quite a few people who have never heard of it: Bitcoin, the popular cryptocurrency. Almost everyone experiences that at the office next to the water cooler or during a birthday party everyone suddenly talks about Bitcoin and the most exotic, technical terms are used. Bitcoin is a perfect example of a technological revolution that has rapidly established itself in society. Bitcoin has frequently made headlines in recent years and is no longer a niche topic. But because of the rapid advancement, there are also hordes of people who have little knowledge over the entire Bitcoin phenomenon. If you are one of these people, this article is for you.

1. Why is Bitcoin so popular?

Strictly speaking, Bitcoin is a means of payment, a digital currency. The previous really big revolution in the field of money was the introduction of book money: no coins or paper, but virtually in your bank account. Bitcoin is now unleashing a new revolution in the financial world. The price of the Bitcoin is volatile, which has enabled smart investors to make large profits. In countries with high inflation and where their own currency is under pressure, virtual currency can offer some security. Digital currency is completely separate from the central banks.

2. What distinguishes Bitcoin from euros and dollars?

The Bitcoin is anonymous and is being developed (mined) by computer software. A total of 21 million Bitcoins can be created. There is no central bank that can suddenly print digital coins, which can cause the value of the coin to fall. For example, the European Central Bank has done this for the euro.

It is not possible to trace a Bitcoin transaction, which is one reason why Bitcoin has become popular as a means of payment in the criminal circuit, among others. Finally, Bitcoin is not traded on traditional exchanges, but via online crypto currency exchanges.

3. Can anyone get started with Bitcoin?

Basically yes. The technology behind Bitcoin (the blockchain) is quite complicated, but you don’t necessarily have to understand it to get started with Bitcoin. In fact, every layperson can buy and sell Bitcoin today, as long as you have an internet connection and a possibility to transfer money, for example via PayPal, iDEAL or a credit card.

4. What do I need to buy or trade in Bitcoin?

You trade Bitcoin, as well as other crypto currencies, via a crypto wallet. A crypto wallet is a kind of digital wallet that only you can access via your computer or your smartphone. Crypto currencies that you buy end up in your crypto wallet, from which you can take them out later to make payments or to buy other crypto currencies. Buying and selling crypto currency is done via a crypto exchange. There are all kinds of different types of wallets and exchanges, so be sure to read them carefully before you get started.

5. Which risks or disadvantages should I pay attention to?

Buying bitcoin is tempting because there are many success stories going around from people who quickly became rich with it. Realize that those stories are exceptions; don’t buy Bitcoin because you want to get rich, but do it mainly because you like it or find it interesting. Like any investment or investment, there is a risk attached to it and you can also lose your investment. Also pay attention to which exchange you use. They all have their own characteristics and rules regarding, for example, commissions that are charged. Finally: don’t forget your passwords and keys. A key is a code that gives you access to your Bitcoin. Because everything is anonymous and there is no Bitcoin bank, you have to rely on yourself. Unfortunately, stories are known of people who have lost their Bitcoins because they have forgotten or lost their key. So don’t become one of those people.

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About Shawn Morrison 204 Articles
One of the founders of BitzArena. Active with crypto currency since the rise of the bitcoin. Loves the innovative character of crypto and blockchain technology, and follows developments in the market closely. Likes to connect technology with business, and likes to make difficult concepts accessible to a wide audience.

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