Cryptocurrency refers to money that’s traded on software platforms. The companies that deal with these cryptocurrencies aren’t only creating an innovative form of currency, but also a new software platform.

According to Jacob Williams from bitcoin-trader.info, many banks and businesses are now cashing on cryptocurrency. In the year 2016, the cost of a bitcoin was rated at $710.09. And by February 2019, the exchange rate for one bitcoin had risen to $3,890.  Those who invested in bitcoin in the past few years ago are now reaping huge profits- but the good news is that it isn’t too late for you to join the game. Of course, you may find it hard believing that digital currencies could be worth so much. After all, unlike other forms of physical currency, such as printing money and precious metals, bitcoin is only represented by lines of code. So what’s this that makes bitcoin so valuable?

Currency Value

In ancient times, the value of the currency used to be gauged in terms of precious metals. For instance, from 1879 to 1933, Americans could trade their federal government USD 20.67 for an ounce of gold. But all that changed when the country faced high unemployment rates as well as spiraling deflation. In the year 1933, Franklin D. Roosevelt, who was America’s president by then, decided to cut the country’s ties to gold, allowing the Federal Reserve to inject more money into the economy. 

Key Takeaways

  • As a form of digital currency, bitcoin promises lower transaction charges than traditional online payment methods.  

  • Several aspects determine the value of bitcoins; the faith of investors, the integration of cryptocurrency into financial institutions, as well as the public’s willingness to learn. 

  • Whenever someone pays for items using bitcoin, electronic computers on the Blockchain rush to make sure that the transaction is accurate. 

  • People who want to trade bitcoin should have a safe place to store them- in this case, a digital wallet that’s connected to a debit/credit card, or a bank account. 

  • To trade bitcoins for conventional currencies, traders can join an online exchange or marketplace. 

Understanding the Meaning of Blockchain

Even if a firm has redundant servers all over the world, the data may only be backed up in about 3 to 5 locations. Besides, these companies collectively spend millions of dollars every year on cybersecurity to safeguard this data. 

But with the help of a Blockchain database, it’s possible to back up the data on thousands of computers located all over the world, for a much lower cost. Plus, the information contained in these Blockchain databases is heavily encrypted and files are sometimes broken into pieces. So, in case one of the pieces is exposed, it won’t necessarily expose the entire file.

The Bottom-Line

Bitcoin now offers a great way for traders to make real money. Currencies are traded across online platforms at low fees and security is optimized at every stage. Though the cost of bitcoins has significantly increased over the past few years, investors still stand a better chance of reaping huge profits. All you need is to master the above strategies.

 

Published by Charlesa Gibson