Almost everyone will have heard of Bitcoin, and many more are using it for a variety of uses. But it is easy for those of us who live in the crypto world that not all the general public are not fully aware of what exactly Bitcoin is and what we can do with it. So here is a beginner’s guide to using Bitcoin.
What is Bitcoin?
Bitcoin is the original cryptocurrency. A cryptocurrency is a new type of currency, independent of and not controlled by any central authority. It is for transferring funds, paying for goods and services, and investing. The principal feature is that it is more secure than most transactions. This is achieved by a technology called blockchain, where every transaction is secured by complex mathematical equations that are solved by ‘miners’ who perform these tasks in exchange for new coins.
How to Purchase Bitcoin?
Now, as much as the technical side of Bitcoin sounds complicated and confusing, purchasing coins as a user is comparatively simple. You buy coins through an exchange, and countless examples allow you to convert PayPal to Bitcoin. These coins can now be used to purchase goods and services or can be an investment.
Advantages & Risks
The advantage is the extreme security offered by the transactions. This makes any exchange of coins almost impossible to track. This secrecy is desirable for many purposes. You could wish for funds to be kept from the tax authorities. We have seen examples of individuals holding wealth in cryptocurrencies to conceal it from their partner. There are risks as well. The value can be unstable, and it is not unusual to see large rises and falls in value over a short period.
Using Bitcoin in Business
Businesses worldwide are using Bitcoin to transfer funds and accept payments. It’s simple to accept Bitcoin alongside your regular card payments these days, most major payment processing firms can facilitate this on your e-checkout system these days. Gone are the days when you would have to go to an external exchange to facilitate this. Many retailers are taking advantage of the lower transactional cost of cryptocurrency and offering discounts to customers paying in Bitcoin. Using Bitcoin to transfer funds internationally can also save businesses a large amount in bank fees.
Bitcoin as an Investment
Many are investing in Bitcoin. We have seen the various uses of Bitcoin as a currency, but is it a good investment? The simple answer is that it depends on whether the value rises or falls. Bitcoin, as well as all other cryptocurrencies, has a greater range of fluctuation when compared to traditional currencies. Although this creates greater risk when investing, it also allows the potential for much greater rewards. We should remember that the fluctuation in Bitcoin is not the only factor, national currencies, such as the dollar also vary in value. So the value of the currency you intend to convert back to also needs to be taken under consideration.
This article has been contributed on behalf of Paxful. However, the information provided herein is not and is not intended to be, investment, financial, or other advice.
Author – John Moran