So I’m all over Bitcoin right now, and have been actively watching it for the last 6 months. At that time it was riding high at over £600 a coin, and it was only when it dropped to £450 that I decided to buy some.
It then stayed low for a while, dipping a little too much for my liking, and when it eventually popped up to around £700 a coin, I sold.
After that sale Bitcoin jumped to around £2000 a coin.
What a swine. So, right now, the price has dropped to around £1800 and it isn’t coming back down again.
I want to write a quick post here to explain to the newbie what Bitcoin is, how it works, when you should invest, and why I sold mine to buy a completely different cryptocurrency called Ethereum.
What is Bitcoin, Mark?
Bitcoin isn’t cash. It is a bit, but actually it’s more like gold than a digital version of paper money. So, remember that: Bitcoin is more like chunks of gold than cash.
Bitcoin is better than Gold. Why?
It’s better than Gold for two big reasons:
- Although Bitcoin transactions are only digital, you can’t fake them. No-one can say, ‘I paid Dave, honest’ because you can check. In fact, all Bitcoin transactions are traceable and have to be confirmed by a bunch of other computers in order to verify that the transaction went ahead. No more online fraud. No more corrupt Governments. Yes Nigeria, I’m looking at you! Hooray for Bitcoin 🙂
- Unlike Gold, which is in limited (controlled?) supply, Bitcoin is actually limited: 21 million coins to be exact and they are being released (mined) very slowly. Because of this, and taking into account that even at a conservative estimate of 1bn people wanting to complete secure digital transactions, there’s still only 21m coins. Luckily, 1 Bitcoin, can be divided by 100 million. Yes, that’s 0.00000001 (one hundred millionth of a bitcoin). Nice.
How does Bitcoin work?
You have to set up a wallet, prove who you are with some ID, add a bank card (eg: Visa), and buy some Bitcoin. The easiest way to do this is with Coinbase (app). As far as I’m concerned Coinbase is the Bitcoin Wallet brand equivalent of PayPal. It’s reliable, well-built, and stable (within reason).
Once you’ve got some money in the Coinbase app, you’re good to buy some Bitcoin. You can either buy an amount in £ or an amount in ฿ (or BTC, or Bitcoin).
Bitcoin looks like this:
To check the transaction, you can go here: https://blockchain.info/ and enter the above address into the search box in the top right. Ta-daa. You can see my purchase history.
If you click the red/green buttons in the lower right of that page, you can see the amount in USDs that sum of BTC is currently worth (not the price I paid/sold them for).
This is all. I’ve already written way to much!