What are bitcoins?
The word bitcoin literally means currency in bits. It is a decentralized virtual currency that no one controls. You can buy bitcoins as if you bought currencies. You can get paid or pay in bitcoins and there are more merchants accepting that currency.
Maybe at first the idea of using bitcoins is a little bit scary, but it is very simple: the programs to handle bitcoins are open source and free to use and the transactions are encrypted and public.
It is a mode of payment and a way to save money as well, but investing in bitcoins is another subject.
Maybe at first the idea of using bitcoins is a little bit scary, but it is very simple: the programs to handle bitcoins are open source and free to use and the transactions are encrypted and public.
It is a mode of payment and a way to save money as well, but investing in bitcoins is another subject.
Why bitcoins?
Bitcoins exist in response to traditional currencies which are 98% virtual and the rest is in the banknotes in circulation.
The drawbacks of the traditional coins are:
The drawbacks of the traditional coins are:
- It is controlled by a central bank.
- Is in constant devaluation, that is manipulation.
- The state controls all movements.
Why bitcoins are interesting?
You can send and receive money around the world at no cost.
Nobody controls, limits or prevents your transactions.
The bitcoin is relatively independent from traditional currencies and allows, in theory, to protect your assets in case of collapse of the euro or the dollar.
This means that you could buy anything even if it is illegal, bitcoins are just a tool and what you do with it is up to you alone.
Nobody controls, limits or prevents your transactions.
The bitcoin is relatively independent from traditional currencies and allows, in theory, to protect your assets in case of collapse of the euro or the dollar.
This means that you could buy anything even if it is illegal, bitcoins are just a tool and what you do with it is up to you alone.
How much do they cost?
The value of bitcoin it's just shooting up and no one knows how far it can reach. The mass of bitcoin is limited to 21 million today, which in theory also limit its value once everything has been distributed.
The value of bitcoin is very volatile
The volatility is hight from 700-540 dollars in two days last November and now (December 2013) has surpased $1000 and the value changes every five minutes.
The value of bitcoin is very volatile
The volatility is hight from 700-540 dollars in two days last November and now (December 2013) has surpased $1000 and the value changes every five minutes.
 | |
| Source : http://www.businessinsider.com/bitcoin-540-2013-11 |
I would say that news and rumors are the only rules with bitcoins.
The risk of bitcoins
The dangers of having bitcoins are basically these two :
- Fraudulent intermediaries such as the case of China Limited Global Bond platform http://www.techienews.co.uk/972880/bitcoin-trading-platform-gbl-shuts-5-million-bitcoin-disappears/ that was supposedly an exchange platform on bitcoins registered by the state, when in fact it was all about scammers that have stolen 5 million in bitcoins.
- Cyber thefts victims because of the lack of security of platforms hosting wallets.
As everything is new it is easy to find unscrupulous people, these are the limits of a currency that is not subject to any rule, but it is something you can easily avoid working only with services or recognized companies only.
Another possible risk is to invest in bitcoins and then to have to get the money out in a time when the value is lower. But this would be the same risk as if we were investing in foreign exchange.
As the whole system is in a period of experimentation it could disappear suddenly and you could lose all the capital . The probability of this happening is remote, but we can not exclude by prudence.
Another possible risk is to invest in bitcoins and then to have to get the money out in a time when the value is lower. But this would be the same risk as if we were investing in foreign exchange.
As the whole system is in a period of experimentation it could disappear suddenly and you could lose all the capital . The probability of this happening is remote, but we can not exclude by prudence.
How does it work?
To use bitcoins you do not need a card id and an appointment with the bank, you do not even have to give any information.
You have to download a program that lets you have a wallet with wich you can generate code that is the key that you will communicate to receive the money .
By the way if it is installed on a computer you must either save the information for this KEY if you do not want to "lose" money if you computer is stolen, damaged or reformated.
With this wallet you can also send money to someone you have communicated your code.
You have to download a program that lets you have a wallet with wich you can generate code that is the key that you will communicate to receive the money .
By the way if it is installed on a computer you must either save the information for this KEY if you do not want to "lose" money if you computer is stolen, damaged or reformated.
With this wallet you can also send money to someone you have communicated your code.
How to buy bitcoins
To feed your wallet you can convert your euros or dollars in bitcoins in specialized agencies (for approximately 1% commission) or "mining" for Bitcoins (a long operation that requires calculation power from your computer).
You can also get paid something in bitcoins it's the easiest way to get them.
You can also get paid something in bitcoins it's the easiest way to get them.
Should I invest in bitcoin now?
I'm thinking of getting a small wallet to experiment. The truth is that I like the idea of bitcoins, because it seems consistent with individual freedoms.
But I would not invest in bitcoins for the moment because there are no rules and because I think that is in a growing bubble period that could burst in any moment.
I consider it an interesting experience to make transactions and a good tool, but would I not use it to seriously invest or deposit a significant part of money.
You can find all useful information on bitcoins in the site: http://bitcoin.org
But I would not invest in bitcoins for the moment because there are no rules and because I think that is in a growing bubble period that could burst in any moment.
I consider it an interesting experience to make transactions and a good tool, but would I not use it to seriously invest or deposit a significant part of money.
You can find all useful information on bitcoins in the site: http://bitcoin.org
0 comments:
Post a Comment