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An Introduction to Bitcoins

Dec 4, 2017

Since its inception in 2009, the media has been in a frenzy about bitcoins as more and more people choose to invest in this form of currency and pay more attention to the “bitcoin and cryptocurrency” buzz.

 

Introducing bitcoins

 

Bitcoins are a form of digital currency (also known as cryptocurrency) that can be exchanged on something called a “Blockchain”. A blockchain is a decentralised ledger that securely – and anonymously – records all transactions carried out between parties, thus cutting out the middleman.  

Bitcoins were first created in 2009 by Satoshi Nakamoto, an individual whose identity has yet to be revealed, though it is believe that this was a strategic move to generate more interest in this cryptocurrency.

In recent years, bitcoins have become incredibly popular with millions of people from across the globe investing in them, and in some countries they are even used as a form of currency, such as in Argentina where they are used to pay for things like Uber. Although there were other cryptocurrencies in existence before bitcoin, this is by far the most popular of all the cryptocurrencies ever to exist.

 

Bitcoin Price History Chart

 

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Why were bitcoins created?

 

Bitcoins were first created as a way to anonymously carry out monetary transactions between two or more parties. Bitcoins were first created to democratise commerce and allow for peer-to-peer international transactions (without the need to pay a fee to the middleman).

The primary reason why people use bitcoins is for remittance purposes. With many family and friends living in different places across the globe, there are countless instances where people need to send money from one country to another, but the process can be timely, inefficient and incredibly costly. Furthermore, there are caps on the amount of money that can be sent internationally (e.g. in China you cannot send more than $50,000). With bitcoin, this issue is avoided as people can quickly and easily send money, in real time, without the burden of high transfer funds in place.

Bitcoins are also a great option for businesses looking to transfer large amounts of money overseas from one currency to another and within a short space of time. With bitcoins, everything is done in real time, thus eliminating any exchange rate risk.

Bitcoins are also a great way to protect volatile currencies that are typically at risk of high inflation rates. Finally, they are regarded as the ‘new currency’ and many major retailers (including Microsoft and WordPress) are accepting them as a payment form.

 

Benefits of bitcoins

 

When you purchase bitcoins, the best way to keep them safe is to store them in a secure offline environment, like a hardware wallet. Offline wallets, such as Ledger or Trezor, are physical items that plug into your laptop or computer, and can only be accessed when they are plugged into your device while prompted by a special code created by you. This ensures absolute security of your bitcoins from online theft.   

 

Purchasing bitcoins

 

There are plenty of places to buy bitcoins online, but it’s essential that you do your research to ensure your selected exchange is fully licensed, completely efficient and easy to use and navigate.

 

This article was created for informational purposes only and does not constitute a solicitation or an offer to buy or sell, or a personalized investment recommendation. Past performance can not be taken as a guarantee of current or future developments. future. An investment can appreciate or depreciate for a variety of reasons.