We’re getting close to the end of our Bitcoin detox Chinabased. The last few weeks have been challenging, but rewarding. With each passing day, my confidence in Bitcoin and cryptocurrencies grows. I’ve learned how to manage my money more responsibly and avoid the pitfalls of other digital assets. And speaking of cryptocurrency, the end of June 2014 marked a turning point for me in terms of understanding its value. That’s when I realized that Bitcoin was going to be the next great thing. It would be a global currency that circulated freely around the world and could one day be used to pay for things with your credit card or even as a storehouse for digital cash. These are exciting times for everyone who practices moderation in their use of digital media (real or virtual). Let’s explore why and how Bitcoin is coming along at this specific moment in time:
What is Bitcoin?
Bitcoin is a decentralized digital currency that was developed as an alternative to traditional currencies. It is used as an inexpensive and distributed method of payments that uses encryption and authentication to prevent banks and organizations from monitoring and tracking users’ activities. The blockchain is a digital ledger that contains all the information needed to track transactions and verify them. Bitcoin is a decentralized currency that is not owned or controlled by any country or entity. These days, most companies only issue digital currency (like Bitcoin) as an alternative to their traditional currency. The blockchain technology used in Bitcoin is known as a “distributed ledger.” This means that each transaction on the blockchain represents an “avalanche of data” that is “linked” together and verified “against.” This verification process ensures that “no single entity or event can forge or modify any data” because all of the data is “linked.”
How Does Bitcoin Work?
To understand how Bitcoin works, imagine that you are sitting in a luxurious hotel room with hundreds of dollars worth of computer hardware. You have just spent the money on a computer, but your computer doesn’t know what to do with it. You could try throwing some papers in the recycling bin, but throwing papers in the recycling bin doesn’t make you a broker or a dealer of computer hardware. You have to take the papers to a computer facility where they are verified and certified as being from your address. If the papers arrive at the computer facility as listed in the ledger, you are able to use those papers to access your financial account.
Why Is Bitcoin Doing So Well?
First, let’s start with the numbers. In the last few months alone, we’ve seen an increase of over 40% in the price of Bitcoin! That’s incredible! It has been trading for years as a very niche digital currency with very limited trading volume. It makes sense then that people would want to use it as a store of value. And, it turns out, this is exactly what people are doing. In fact, one study found that people are more likely to accept funds in Bitcoin than their traditional cash equivalents. Overall, this is great news for Bitcoin. It means that these days people are willing to take the leap into a more lucrative market place.
How to Buy Bitcoin
While it is not fair to expect every Bitcoin user to pick up the phone and call all of their friends and family members, it does pay to research the market place. In fact, it’s better to research the market place thoroughly and carefully before you invest in Bitcoin. There are a lot of moving pieces right now with the recent price rise and wall of silence on the matter of Bitcoin regulation. The main thing you should consider is this – are you willing to sacrifice some of your Privacy for the potential gain of big bucks? If the answer is yes, then get ready to mine with a miner from now on. Instead of selling your coins for fiat money, you are actually investing in the future of the technology. This investment is tax-free, and it will grow with the price of Bitcoin. Plus, if you invest dollar for dollar, your taxes will be cheaper than if you try to calculate them out as a percentage of the value of your investment.
The Bottom Line
Ultimately, it’s all about managing your money wisely. Your money should be managed so that you can maximize its benefits while avoiding the pitfalls of all other digital assets. There are always new developments that may cause you to lose your money, but they are not the end of the world. This is where the Bitcoin revolution is leading us, and we are all in it together!
