With Bitcoin becoming very popular in these times we are living in, you might find it necessary to learn more about this digital currency that seems to have come out of nowhere. If you aren't aware of what Bitcoin is, or if you have heard of it but need more information on the matter, I'm here to answer a few questions you might be asking yourself right now. Hopefully after reading through this, you have the answers you are looking for regarding this new, interesting, and slightly confusing new currency that everyone seems to swear by.
What is a Bitcoin and how does it work?
When you ask what this digital currency is, you are likely being given many different responses. The easiest answer is that it is a digital currency, but it has a few strings attached. A lot of people describe this as a computer chip placed inside of a digital wallet, but that is an explanation few can actually understand.
If you want to really understand what this currency is, think of it like a digital gift card, or a coupon code that gets you a few dollars off of a specific product. This is something that is completely digital, and the places you can spend it vary depending on the part of the world that you live in.
It doesn't expire, but it isn't something that you can ever physically touch. You can get this coin by either mining it, which a lot of people do, buying stock in it, or paying for it with real money. If you aren't sure how stocks work, you should read up on that before diving any further into Bitcoin.
How does Bitcoin make money?
Because this is a digital currency with a large amount of sponsors, you can often earn more coins by spending money at certain stores and verifying that purchase with the app. Because you bought something from one of these stores either using a code from the app, a link from the app, or you bought something from a store that sponsors the app, you can get rewards back. The reason you receive free coins after making these purchases is because the app gets a little bit of money back from these stores when you make a validate a purchase. It's a partnership between the two companies and you are helping make them both money, so you get coin in exchange.
Another way the company makes money is by having people purchase coins themselves. Very few people do it, but when they do, they buy a lot at a time. So the business makes a lot of money and can continue giving out free coins to people who purchase things from their partners.
Can you really get rich with Bitcoin?
While it isn't impossible to get rich by using this digital currency app or website, it isn't something that is going to happen overnight. You need to invest in the right stocks, and you need to save up. If you are constantly spending your coins, or trading them for other things like stock or physical items, you aren't going to become rich. But if you stay dedicated, invest in things that are profitable, and save up your coins, you could make a decent amount of money back from this experience. But at the least, you are going to have to wait for a few months to see any kind of large money difference when you are only mining the coin and not making any purchases or putting coin in different stock markets.
Why did Bitcoin get so valuable?
While this currency is completely digital and can be produced out of thin air, it isn't actually like that at all. People will assume that since this is digital currency, there is no ending to it. But the reason why this coin is very valuable is because, like real money, there is only so much of it. Once it reaches the gap, there is nothing more to share. It would become meaningless if there was an endless supply of this cash. But since there is a limit, you are more interested in gaining more and more of it. This is why you become rich from buying into the coin. If you hold a lot of the coin, people will offer you thousands of dollars for even half of what you have access to.
Think of a collectible DVD that was only released in 10 copies. If you are one of the 10 people that own this DVD, you will receive plenty of offers because these DVDs are valuable. The same goes for the coin. The only difference is this is something digital and has more uses than a collectible DVD from a few years back.
Is Bitcoin legal?
If you live in an area that allows you to gamble, and make money on the internet, then yes. Bitcoin isn't something that you have to be afraid of, it isn't going to get you into any trouble as long as you aren't taking advantage of it, hacking into accounts, or mining too many coins at once without putting money into the system. However, if you live somewhere in the world where you aren't allowed to gamble or make money on the internet, then you should read the fine print so that you can avoid any trouble you might get into.