Most people have heard about Bitcoin but still many know very little about it. Not knowing where to start can put people off from investing in what is potentially a lucrative market.
So what is Bitcoin?
Bitcoin is a cryptocurrency or altcoin; an encrypted digital currency built with a technology called blockchain. The encryption makes Bitcoin very hard to crack or steal. Blockchain creates a permanent, tamper-resistant record of transactions.
While there are many different cryptocurrencies around these days, Bitcoin was the first. It was first launched almost 10 years ago back in 2009 and still remains the most popular of the alt-coins.
Bitcoin is one of the only cryptocurrencies accepted by some of the larger corporations including Microsoft and Dell. It can also be used to buy other altcoins as well as gift cards for use with online retailers such as Amazon. There are also brokers and a few ATMs that will convert Bitcoin into Australian dollars.
Where to buy Bitcoins
When you are starting out, the best place to buy Bitcoin is from a reputable exchange. There are several based in Australia including Bitcoin.com.au, CoinJar, CoinLoft, and CoinTree.
The other option is to buy through larger foreign-based exchanges such as Coinbase from the U.S. or CEX.IO from the United Kingdom. Coinbase has a reputation for hosting the most secure wallet and is great place for a beginner to start. Most financial journalists and traders regard the Coinbase price as the accepted value for Bitcoin and Ethereum.
Why you will need a Cryptocurrency Wallet
To buy, sell and trade Bitcoins you will need a cryptocurrency wallet. Such a wallet is an application like PayPal or a digital bank account. The difference is that it’s used to store cryptocurrency.
Most people are happy to stick with a desktop wallet, but mobile wallets are available from some exchanges including Bitcoin.au. A good starting point though, is to use a wallet made available at an exchange.
Once you have your wallet set up you will be able to transfer funds into it; or buy altcoins using Visa, MasterCard, or your bank account. It's a good idea to buy cryptocurrency with a credit card thanks to the added layer of protection.
It is fine to store your Bitcoin or other cryptocurrency in your online wallet for everyday use. But, if your'e planning to hold onto your currencies, you may want to look into long-term storage solutions. There are many of these available including hardware and desktop wallets. Make sure you do your research before you choose what’s right for you.
Investing in Bitcoin can be a great education in the future of money. Knowing how to buy, sell and trade cryptocurrency will help you understand 21st Century finance.