What’s all this talk about Bitcoin? It seems like everyone is talking about it with the price skyrocketing lately from $2,800 a coin a couple of months ago to just over $20k this last weekend! We’ve had a lot of our clients ask us about it so wanted to cover the basics here.
What is Bitcoin?
Quite simply, it’s digital cash. It’s an online currency that allows for secure transactions around the world, outside of banks, outside of governments.
- Decentralized: Built on the “blockchain” technology, all Bitcoin transactions get processed across the network of everyone using it.
- Secure: Since each transaction has to be independently verified across the network, this makes it next to impossible to commit fraud.
- Private: Each transaction is recorded in the ledger but just the wallet address (a unique encrypted code) of the sender and the recipient. The actual owner of the wallet is kept private.
- Easy to Send: Simply send the amount of Bitcoin you want to the wallet address of the recipient. There are many ways to do this: from Blockchain.info, through CoinBase, or through another cryptocurrency exchange. Or, you can simply print off a paper wallet (your unique codes printed off) and physically give it to someone!
How to Buy
Whether you’re buying Bitcoin for payment or as an investment, you’ll need to purchase this popular coin. The easiest way to buy is through an exchange like Coinbase.com, although there a lots of others. We prefer Coinbase though since it’s so easy to set up and use, and has a mobile app. You will need to be careful with transaction fees though – there are cheaper alternatives but not as easy to use. GDAX, also owned by Coinbase, offers much lower fees.
Opportunity or Bubble?
There’s definitely arguments for both sides here. Bitcoin has already seen remarkable gains but with the mass adoption it’s now experiencing, it could have plenty of more gains. However, since its price has raised so quickly, the market may snap back to a more sustainable level. Only time will tell.
Wherever you stand on this debate, make sure to be smart in your investing – don’t invest more than you’re OK with losing, and do your own research.
Besides Bitcoin, there are a LOT of other cryptocurrencies, commonly called “altcoins”. Some, you can buy directly from the exchanges. For most altcoins though, you’ll need to purchase Bitcoin first and then buy your altcoins from your Bitcoin balance.
Doing our own research, there are quite a few altcoins that we’re excited with based on their development teams, vision, and opportunity.
- First is Ethereum (www.ethereum.org/): the runner up to Bitcoin, it’s built on a different blockchain, has smart contracts, and its own development language.
- Next is Dragonchain (www.dragonchain.com): a newly added coin, it’s developed by Disney and supports common programming languages, and also smart contracts. Because this coin is still so new, you’ll probably want to buy at www.kucoin.com.
- Next would be Ripple (www.ripple.com): it’s a low-cost alternative to wire transfers typically found in banking.
- Lastly, IOTA (www.iota.org): offers trading without fees, perfect for devices enabled for the Internet of Things. Also, uses “tangle”, an alternative to the blockchain technology.
It’s an exciting time with all these new cryptocurrencies – new technology, solutions, and opportunities. If you decide to invest in Bitcoin or altcoins, make sure to do your own due diligence.
Disclaimer: we’re just sharing our opinions – don’t take this as financial advice. Trading is a highly risky activity.