Bitcoin trading represents two concepts : a digital and universal currency but also a secure and anonymous payment system.
Satoshi Nakamoto launched bitcoin as open source software and released a manifesto outlining all of the characteristics of Bitcoin Trading (and Blockchain) in January 2009. Nakamoto’s identity remains unknown; he is the miner of Bitcoin’s first block, the “genesis block”.
Bitcoin is a decentralized cryptocurrency. So, and this is pretty amazing, no one controls BTC. No person, no business or no government. Bitcoin Trading is managed by the community of its users. And this is the basis of all its specificity.
The Best Bitcoin Trading platforms in Canada
How to buy Bitcoins?
- You can accept it as a means of payment for a good or a service
- You can buy bitcoins on exchange platforms like Coinbase
- You can buy bitcoins from one of your relatives who owns it (nothing prevents you from setting your own exchange rate, you can even give bitcoins)
You can also “mine” it with your computer (requires a powerful computer system)
Bitcoin trading advantages
- Freedom of payment: you can trade bitcoins anytime and anywhere in the world. No holidays, no borders, no forms. Full control of its currency.
- No transaction fees, unlike Paypal, Western Union, or any other money transfer service.
- More security . Transactions are secure, anonymous, irreversible and therefore do not contain personal or sensitive information. It is impossible to defraud and “hack” the payment system, unlike bank cards for example.
- Transparent and neutral. No hidden fees, all transactions are recorded and therefore searchable, no institution receives commissions on transactions.
- Community. Bitcoin is seen as an alternative method to the domination of banks and states.
Is Bitcoin Trading Legal?
It depends on the country you are in. If you are in Japan, it will soon be a formal payment method. India is also considering its formalization. However, China has decided to ban it temporarily, the time to find a system of regulations. Countries like Estonia or Vanuatu have accepted it perfectly. In most countries, it is still a gray area, with no official “ban” or authorization. As of this writing, Bitcoin is legal in France.
What is Bitcoin mining?
Bitcoin Trading mining includes two main functions: adding transactions to the blockchain by verifying and securing them, but also producing new currency.
Individual blocks added by miners must contain what is called a “proof-of-work” (or PoW) protocol.
The mining activity requires a computer and a special program, which allows miners to compete with other miners to solve complicated mathematical problems. It requires a lot of computer resources. On regular intervals, miners try to solve a block using cryptographic hash functions.What is that ? As Wikipedia tells us, it is a hash function which, with a data of arbitrary size, associates an image of fixed size, and of which an essential property is that it is practically impossible to invert, that is to say say that if the image of a datum by the function is calculated very efficiently, the inverse computation of an input datum having a certain value as its image proves to be impossible in practice. For this reason, we say of such a function that it is one-way.
The hash value is a numeric value of determined size that identifies the data. The miners use their computer to solve a block as quickly as possible . Whoever solves the first becomes the miner of the block and therefore receives a reward. The rewards for bitcoin blocks decrease over time.
Previously, only crypto fans occupied the miner positions. However, cryptocurrencies have become popular and have risen in value. Thus, the mining activity can quickly become a lucrative activity. Thus, many people and companies have started to invest in mining workshops and in powerful equipment to be competent. Individuals have created “mining pools” where they join forces to deal with the enormous resources of companies. A complete mining kit consists of a set of graphics cards, processor, power generator, memory, cables, and fans.On Amazon, there are mining kits, the price of which varies between 2000 and 3500 euros. If you’re interested in mining, you can check out the Avalon6, AntMiner S7, and AntMiner S9 kits. There are mainly two companies that dominate the mining market: Bitmain (based in Beijing) and Canaan.
What performance can I expect?
You should know that the crypto market is extremely volatile and it is impossible to predict or even guarantee performance (even if the new “Bitcoin gurus” who have emerged on the web claim to have the capacity).
Some cryptocurrencies have triple-digit growth rates over a day and others can lose half of their value in a matter of days. Sometimes they are the same, a few days apart. It is possible to earn a lot of money very quickly, but it is also possible to lose everything in a few hours.
How to manage your risks?
“Do your own research” is probably the most useful advice we can give you. Never invest in a cryptocurrency without understanding its definition, fundamentals and use cases . Also, take the time to read the “white papers” of the cryptocurrencies you want to invest in (you will find them on the official crypto websites).
Finally, you will have to take a look at the constitution of the founding teams (and you must judge for yourself whether or not these people are able to achieve the “roadmap” they have enacted for their crypto currency)
What can increase the price of crypto currencies?
Each cryptocurrency depends on very different factors to the extent that the use cases and the founding teams are not the same. However, there are general trends.
Going back to the fundamentals and the major economic paradigms, it should be noted that the value of an asset increases when the demand for this asset exceeds the supply for this asset. Thus, a growing adoption of cryptocurrency will automatically contribute to an increase in their value. Yes, you get it, the more entities that will accept Bitcoin as a means of payment, the more it will make sense to have Bitcoin, the more people will want to acquire Bitcoin, the more demand there is, the more the value. of Bitcoin will increase.
In the short term, announcements of partnerships with large companies often contribute to the rise of cryptocurrencies. This is particularly what Ripple (XRP) knew when it announced partnerships with major banks. The founder of Tron (TRX), Justin Sun, had also spread the rumor (not proven) of a partnership with Alibaba (the giant of Chinese e-commerce); the value of TRX had exploded in a few hours.
What can bring down the price of crypto currencies?
Conversely, a non-adoption of crypto currencies will contribute to the fall in the value of the latter . If a cryptocurrency becomes useless, then it doesn’t make sense to own it, so people won’t buy it anymore (and even seek to sell it), so the supply will increase while the demand will decrease and, mechanically. , the value of the cryptocurrency will decline.
There are also factors internal to each cryptocurrency. The value of Tron (TRX) recently plummeted when the community noticed that the founding team had plagiarized much of their whitepaper. Also, the value of crypto currencies drops when institutional investors (the “whales”) decide to sell large amounts of the same crypto currency in a very short time. It inevitably moves the market.
Where can I get information?
To find out, you have all kinds of media at your disposal. However, you need to start by visiting the official websites of the cryptocurrencies you want to invest in. Read the white papers and take an interest in the backgrounds of the founding team members.
Then you often have a blog that is related to cryptocurrency, where the founders post the progress of the projects. You also have Telegram channels, where the community of investors of this cryptocurrency discuss.