The period between 2020 and 2021 was certainly marked by the speculative bubble on Bitcoin, the world’s first and most popular digital currency. The price rose above $60,000 on March 13, 2021, then collapsed abruptly. Even today, we are still witnessing a downward phase that has affected not only Bitcoin but all cryptocurrencies.
Bitcoin has become extremely popular and a relatively common topic of discussion. In this article, we will explain the success (at least in terms of popularity) of Bitcoin and everything you need to know about it.
Bitcoin: what are they?
Bitcoin was launched in 2009 and is considered the first cryptocurrency ever conceived. Originally, Bitcoin was created to eliminate traditional intermediaries and conduct financial transactions without banks and governments. Today, it is used to pay online on many platforms, and it has enormous scope in other ways, some of which we are only just beginning to explore, like its role in video games and casino games. Did you know that you can use it when you’re gaming online with others, or even join crypto casino games that integrate it into their systems?
Before you can start using crypto in a casino game, though, you need to know how it works and what its advantages are. The first one is control; we all know that banks organize and control the euro and other currencies with which you pay online. In contrast, cryptocurrencies are not controlled by anyone, and to be a secure method, there are a series of connected computers in which their movements are replicated.
How does Bitcoin work?
Bitcoin transactions are based on a computerized accounting system that works between people (P2P) without intermediaries to validate the transactions.
The network in which these operations are carried out is protected with cryptography. In addition, the record is distributed simultaneously to all connected computers. This makes the system extremely difficult to breach and much more stable and resistant to computer attacks, forgery and embezzlement.
For users, however, operating in Bitcoin is as simple as sending an email: there is a sending address, a receiving address and an amount in bitcoins going back and forth. Both the sender and the receiver of bitcoins operate privately and remain anonymous to the rest of the network.
Bitcoins, blockchain, and miners
Unlike traditional money, bitcoins are not printed but generated through mining. This is the name given to the use of special computers dedicated to processing the calculations necessary to validate transactions.
For each transfer, the system takes note of a series of data in code: amounts and Bitcoin addresses of the sender and the receiver. As this is not required, no private information is collected, nor is information about the devices from which the transactions are made.
In exchange for their efforts, the network generates a value in BTC that is credited as payment to the miners. This is called proof of work and is the only way to create bitcoins.
Where to invest in bitcoin?
If you are starting out now and simply want to execute Bitcoin trades, then you could use trading platforms, usually provided by brokers themselves. Here the investor to trade uses what are called Contracts for Difference, derivative products concerning the cryptocurrency.
Are Bitcoin secure?
As of today, as a payment method, Bitcoin is secure and private, although they are not yet accepted on most major platforms.
If you want to use them to get rich by buying them cheap and selling them expensive, then no, it is not a safe financial asset. It is not advisable to play the buying and selling game if you do not fully understand how this game works, as their value can plummet without warning at any time, and you can lose almost all your money, or you may have to wait months or years for the selling value to be the same as the buying value.
Investing in bitcoin: advantages and disadvantages
Bitcoin is designed in such a way that its quantity is limited in time, in fact bitcoins will be mined until the maximum cap of 21 million is reached. The scarcity of the currency according to some analysts ensures that its value in the long run tends to rise. It is hard to believe this in bearish market phases such as we are currently experiencing, but there is no question that it is an asset that has a limited quantity and this is a factor to keep in mind.
Another advantage is the fact that Bitcoin is not tied to monetary policy choices, but travels on a parallel and autonomous track from the world of finance governed by central banks.
Among the disadvantages we must again mention its volatility and instability, which makes investment difficult for those who are not familiar with this market.
In addition, making a mistake during a transaction can cause one to lose capital in full, so care should be taken to type the wallet address correctly, because transactions are irreversible.
Not all countries view cryptocurrencies and Bitcoins favorably; in fact, some nations have banned them. This is the case in China, Egypt and Tunisia, for example, but in other states (e.g., the Middle East) the ban is implicit, but such that would-be investors are put off.