If you’re considering buying Bitcoin, you will of course need to know how and where to buy Bitcoin. It is also worth ensuring you are primed and ready for the trading world.
You don’t need to become a blockchain engineer to purchase Bitcoin but understanding it can ultimately translate into money. Learning how to interpret Bitcoin’s price data can be another useful indication of Bitcoin’s future price movements. After assessing your various trading options (you can do more than just “buy Bitcoins”), you will be able to put all of this together on a reputable, well-designed and low-cost trading platform.
Bitcoin is a decentralized digital payment platform. It arrived in the world shortly after the global recession in 2008 and it sought to answer the problems created by the current system of banking. The inventor’s name was given as Satoshi Nakamoto, but it’s unknown whether this is referring to an individual or a collective. The dream behind Bitcoin was to empower individuals all over the world by creating a currency that is owned and controlled by its holders, rather than being beholden to a centralized banking institution. While Bitcoin is yet to replace the fiat banking system, it has continued to defy expectations, and its price has grown from a few cents to over $60,000 at its peak. It has also inspired a whole wave of blockchain-based technologies, an ever-growing fanbase and competitors such as Ethereum.
People often ask what the real-world usage currently is of Bitcoin, beyond trading. What can you buy with Bitcoin? Although its utility is nowhere near that of a fiat currency, you may be surprised at how much you can already buy using Bitcoin. Some car manufacturers are already accepting payment in Bitcoin. Until recently, Tesla allowed customers to pay in Bitcoin, but they stopped because they believe Bitcoin is not energy efficient enough. Bitcoin requires a lot of computational energy to be used (through a process called “mining”) to run. Nevertheless, Bitcoin can also be used to buy houses (the first sold in the UK in 2017), yachts, holidays, clothes, VPNs, and more. “Just Eat” in France also accepts Bitcoin to buy food and drink deliveries. Bitcoin finally gained universal application by becoming legal tender in El Salvador in June 2021.
Bitcoin runs its digital payment system using a decentralized blockchain network. “Blockchain” has become a bit of a buzzword but what does it mean? The simple way to think of blockchain technology is as the name suggests, a chain of blocks.
Each block contains data about the distributed ledger, on which all transactions are recorded. For a new transaction to take place, it must match the “genetics” of the current blockchain. If it fits then it forms part of a new block which, as with the entire blockchain, is viewable by everyone on the network. This system makes hacking the cryptocurrency extremely difficult. One problem, which is moving increasingly to the forefront of cryptocurrency, is the environmental effects of maintaining a blockchain such as Bitcoin’s.
Blocks within the blockchain do not self-organize or run using a centralized programme. The technology relies on some users dedicating computational time and energy to checking and confirming transactions. A large number of users are required to do this, as it takes back and forth communication between their computers (known as “nodes”) to validate a transaction. Think of it as a 3D puzzle but each miner can only see one side. They need to compare their view of the blockchain with others to know where they can place the next piece.
As Bitcoin has grown over time however and the number of transactions it needs to process has grown too, it requires more miners who, in turn, use more energy. The total yearly energy consumption of Bitcoin has been compared to that of Argentina or the Netherlands. How much of an issue this will be for Bitcoin remains to be seen.
This question could be answered a hundred different ways by a hundred different people. If you were to ask a Bitcoin enthusiast, they may well tell you that Bitcoin will replace the current fiat banking system and become the biggest currency and payment system in the world. On the other hand, there is still a widespread conviction that Bitcoin is just a temporary fad, a sort of pyramid scheme without any underlying value which will fizzle out over time. While this may be true, Bitcoin may lose popularity or be usurped by another coin, it won’t disappear. Its legacy is already plain to see.
Bitcoin has caused a technological revolution, changing the way applications are built and payment systems are thought about. There is a very large margin between this guaranteed minimum and Bitcoin becoming the universal currency of choice. Where will Bitcoin land between a historic inventor and huge currency? Bitcoin is certainly headed in the right direction. Its price has surged over the previous decade from under a dollar to over $60,000 per Bitcoin. There are some current roadblocks on its path, however, and how well it maneuvers around them could decide the heights of Bitcoin’s success.
First, as mentioned above, Bitcoin will need to address its negative impact on the environment. Most likely this issue was not foreseen back in 2008, a time when the environment itself had less attention. With new eco-coins popping up, Bitcoin is under growing pressure. Volatility is the other huge issue hanging over Bitcoin right now. If you can’t trust a currency to hold its value from one day to the next, then you’d be foolish to use it for anything other than an investment. If Bitcoin can overcome these two challenges, then the sky is the limit in terms of its future price and global adoption.
Predicting The Price
To get a sense of Bitcoin’s future prices, it is a good idea to keep a tab on the latest Bitcoin news. This is important whether you are looking to invest as a long-term, medium-term, or short-term investor. After learning about the overall narrative of Bitcoin, the next best place to look is its price charts. While price data is purely present and past, price patterns can emerge which point to its future. There are several different “chart indicators” which can help you to analyze an asset such as Bitcoin. Each indicator will use a slightly different approach to ascertain slightly different information.
Three popular ways chart indicators can be used is to decipher an asset’s trend, volatility, and momentum. The Moving Average Convergence Divergence (MACD) is a popular tool for working out the trend. When MACD’s two chart lines are close together, there is no trend, and when they are apart, it means there is a trend. Bollinger Bands are excellent at measuring volatility. When its three bands are close together called the “squeeze,” it implies a high level of volatility. Finally, the Relative Strength Index (RSI) can be used as an indicator of momentum, working a bit like the Stochastic indicator, focusing on high and low-price purchases in its calculations. A good online trading broker will include some chart indicators to use, such as these.
The best way to buy Bitcoin is not the same for everyone because there are many different trading options available to you. If you simply want to purchase Bitcoin there are exchanges and online brokers through which you can buy and sell Bitcoin. After you receive your Bitcoin, you can usually leave it in an online wallet held by the trading site or exchange where you bought it. If you plan to hold Bitcoin for an extended time, it is highly recommended you store your Bitcoin in a separate wallet. There are many types of wallets available now, but one of the safest methods to use is saving your wallet onto a portable storage device, such as a USB stick and keeping this somewhere safe. Just remember to keep safe and secure a copy of your wallet’s passcode because, if you lose it, you lose your Bitcoin too.
Derivative Bets And Bitcoin
Some brokers will also allow you to place derivative bets on Bitcoin. This means you are trading on Bitcoin’s price without directly owning the underlying asset (Bitcoin) itself. Hedging is one technique that uses derivative bets. Futures and options contracts are examples of this. Hedging strategies are used to mitigate against losses, rather than to make gains. By contrast, CFDs (“contract for differences”) are a means of leveraging money, to increase your potential gains. CFDs have become popular in recent times, although remember the risk goes both ways. You can also lose much more money from a relatively small stake. Next: where to buy Bitcoin.
Platforms From Where To Buy
If you want to buy Bitcoin online (which is the easiest way), there are several options open to you. Not all online trading platforms are built the same. Unfortunately, some sites are simply not reliable or trustworthy at all. We can, however, highly recommend our online trading brokerage, “TradeOr.” Not only is TradeOr a reputable and well-established trading platform, but it also ticks all the boxes in terms of Bitcoin trading. TradeOr has several marketplaces, including cryptocurrency, the stock market, forex and commodities. Members have access to several market analysis tools, including chart indicators. There is a fantastic support team, offering technical and expert advice. Traders can also choose to use real or virtual money, allowing users to practice their trading skills without risking a cent.
If you want to buy Bitcoin, it is important to keep up-to-date with market news and learn how to use chart indicators. This can help inform if and when to purchase Bitcoin. Next, there are lots of ways to invest in Bitcoin itself, from buying the coin to placing derivative bets, which you will need to decide on. After this, you’ll want to find yourself a top-quality broker through which to buy and trade Bitcoin. While there are many options, we can guarantee our very own TraderOr will provide you with all you need for a positive trading experience. You can even trade with virtual money with one of our “demo accounts” to practice before investing any money.