Bitcoin What is how to invest and make money
Bitcoin is the most popular cryptocurrency on the market. Designed by the mysterious Satoshi Nakamoto, the digital currency continues to rise in value year after year. Now it's time to learn everything about cryptocurrencies, from their inception until today.
The term Bitcoin is the compilation of two words of English origin: bit (binary data unit) and currency (currency in Shakespeare's language). Virtual currency was first mentioned in 2008 by an individual (or group of individuals) who called themselves Satoshi Nakamoto. This is a pseudonym. We don't yet know to whom we really owe the creation of Bitcoin.
In any case, the mysterious Satoshi Nakamoto stands out today as one of the greatest riches in the world. The person, or group of people, behind this pseudonym, is one of the 50 richest individuals in the world. It is estimated that Satoshi Nakamoto currently owns, through its blockchain portfolio, 980.000 bitcoins, or more than 58 billion euros.
What is cryptocurrency?
Bitcoin does not work like the euro, dollar or pound sterling, it is a cryptocurrency. Bitcoin is a digital currency unit that does not rely on any authority or financial institution. So there is no central body that regulates cryptocurrency. This was also Satoshi Nakamoto's stated goal in the Bitcoin White Paper: to escape financial institutions and introduce a completely independent currency. In this way, it is impossible to devalue the virtual currency.
If Bitcoin is not regulated by any institution or by any bank, the currency is not without certain rules. In the absence of an authority to regulate Bitcoin, its value is fully determined by the law of supply and demand. That is why its course is so variable . But this is also why enormous gains can be made in a few hours. Note that it is also possible to lose money. Ultimately, the value of Bitcoin depends on the trust we place in it.
Not a crime against critics of the currency, Bitcoin has established itself as a real currency in recent years. BTC already performs the three functions of money as defined by Aristotle: the intermediary, the unit of account, and the store of value.
WHAT IS BLOCKCHAIN?
You might think that transactions made with Bitcoin are out of control. This is not the case. In order to ensure the safety of its users, the creators of Bitcoin invented blockchain technology. The blockchain (or chain of blocks in French) is at the very heart of the principle of Bitcoin.
Blockchain is the technology that allows information to be stored and transmitted in a completely transparent and 100% secure manner. A blockchain is a huge database that consists of all the transactions made by its users. When two people exchange Bitcoin via blockchain, their transaction is encrypted on the blockchain network and then locked.
This deal is called "block". The blockchain consists of all transactions, and therefore all user-designed blocks. Other users do not have access to this block, and therefore cannot modify its content. You will understand this: no one can seize your bitcoins. Contrary to what many internet users think, Bitcoin is not anonymous. Technology pseudonym. It is still very easy to track the location of an internet user by finding their wallet on the blockchain.
All active developers of the blockchain network validate and confirm each exchange. For an individual to be able to modify the blockchain, it needs the consent of all other members of the blockchain. It is impossible. If power is decentralized, it is not necessarily non-existent. Similarly, Blockchain is not stored on individual servers but on all computers in the network. So each user stores a piece of the blockchain on their devices. Each device in the network is called a "node".
Like any other computer program, the Bitcoin protocol is regularly updated to improve its efficiency. Recently, the Bitcoin blockchain received a Taproot update. This major upgrade will make individual transactions indistinguishable from transactions involving multiple signatures, improve network privacy, and lower transaction costs.
Bitcoin is not the only cryptocurrency that operates through the blockchain. Most of the 5,023 cryptocurrencies listed by CoinMarketCap operate using blockchain, such as LiteCoin, Ether and their Ethereum platform, or even Doggecoin, Shiba Inu or BNB.
How is Bitcoin created?
The process of creating Bitcoin is called mining. It is a set of very complex computer calculations that allow to quantify each transaction. Thanks to mining, exchanges made in bitcoins have become very secure. To mine bitcoin, you will need to arm yourself with powerful computer equipment, ASIC.
In other words, Bitcoin is the result of an extensive computational calculation performed by hundreds of computers. As with silver and gold, and with all traditional exchange currencies, the amount of bitcoin that can be mined is limited. Satoshi Nakamoto voluntarily imposed a limit on the Bitcoin code. It is already impossible to bypass 21 million units of Bitcoins : the computer code of blockchain blocks simply does not allow it. It is estimated that the maximum will not be reached until 2140. It is this inherent rarity that gives Bitcoin its value.
What is the impact of Bitcoin mining on the environment?
Bitcoin mining requires you to keep powerful machines that work consistently. It is not surprising that this process consumes a lot of electricity. According to an analysis by the New York Times, it currently takes "13 years of household electricity" to mine a single BTC. Bitcoin's energy consumption is equivalent to that of an American country like Washington. It even exceeds the energy consumption of Finland, a country of 5.5 million people.
The queen of cryptocurrencies consumes 7 times more electricity than all of Google's infrastructure. It is less than the banking sector. The cryptocurrency will consume 113.89 TWh/year, or half of what the banking sector (238.92 TWh/year) and gold mining (240.61 TWh) consume. However, it should be noted that most Bitcoin mining farms rely on green and renewable energy, such as hydropower. In addition, many players in this sector are currently working to reduce the environmental footprint of mining.
How to buy Bitcoin?
To buy Bitcoin, or part of Bitcoin (satoshis or sats), it's very simple. Just go to the online exchange platform. Most of these platforms can be accessed through an app available on the Google Play Store or App Store. Among the most famous are Coinbase, Crypto.com or even Binance Basic. On these platforms, you can exchange your bitcoins and convert them into euros, ether, USDT (a cryptocurrency whose price is stable) or BNB. Most exchanges offer to deposit funds by credit card or by wire transfer.
How to make money with Bitcoin?
There are several ways to grow the bitcoins you have purchased. Experts have identified several ways to invest in cryptocurrencies. Depending on your goals, start bet, and greed, you will have to determine your investment methods. Similarly, you can bet in the short or long term. Before proceeding, we remind you that every investment involves risk.
If you want to bet on the long term, we recommend using the "Hold" method. Deposit a small amount into Bitcoin, forget about it for a few years and then come back again and find out if your initial bet is small. Nothing prevents you from looking at the price and trends from time to time but in any case, you will not resell your bitcoins. In this tactic, you first determine how much you will consider selling from.
Another popular investment method is DCA (Average Cost in Dollars). This practice consists in the regular deposit of a specified amount in the wallet. For example, you can invest 15 or 50 euros every month. This tactic makes it possible to facilitate the entry price of investors and not take a large amount at once. Several platforms make it possible to invest in DCA, including the French company StackinSat.
The trader's method involves risk but is sometimes more profitable, consisting of buying and selling within a short period of time. You buy a small portion of bitcoin when the price is at its lows, and you sell when the price is at its highs. To achieve your goals, you will have to try to predict the market price. If your nerves are strong, you can try it. Warning: This is by far the most dangerous way!
WHAT CAN I BUY WITH BITCOIN?
Don't think Bitcoin is just to guess. Cryptocurrency can also be used to make online purchases. Currently, more than 100,000 sites around the world allow their customers to pay using bitcoins. Retailers who accept Bitcoin as a payment offer a warning "We accept bitcoins" or "Bitcoins are accepted here".
IN WHICH COUNTRIES IS BITCOIN BANNED?
Fearing that cryptocurrencies would facilitate money laundering and participation in the financing of terrorist groups, some countries have passed legislation against Bitcoin. This is especially the case with China. The Chinese government has banned cryptocurrency payments. China prohibits any foreign platform from providing services to investors residing in China. Exchange platforms such as Coinbase, Binance, Kraken, or even Bitfinex are not allowed to provide services to Chinese citizens. Other countries in the world, such as India or Nigeria, have declared themselves hostile to cryptocurrencies. Recently, Sweden also opposed Bitcoin, believing that energy consumption in mining threatens the climate. The specter of a ban looms in many areas.
On the other hand, other countries have instead decided to adopt cryptocurrency. This is the case with El Salvador. In this South American country, Bitcoin is recognized as a means of payment. It is possible to buy coffee or McDonald's in bitcoin. All traders in the country must allow residents to pay for their purchases using cryptocurrency. The Salvadoran government has launched its own app to easily pay with BTC, Chivo Wallet, and plans to create the first 100% city dedicated to Bitcoin. Note that many countries around the world (in South America and Africa) are considering following suit with El Salvador.
Bitcoin Price
Since its inception, the price of Bitcoin has continued to rise, causing an explosion in the valuation of the cryptocurrency market. In November 2021, the price of the digital currency finally surpassed $60K. Bitcoin's price peaked at $69,000 before falling again. The currency then fell back below $55,000, marking the start of a new bearish phase. Experts believe that this autumn is due to the emergence of a new type of Covid in South Africa. A hypothesis was confirmed in the days that followed, causing bitcoin to fall below the $45,000 mark, for the first time in months.
Many observers believe that Bitcoin should continue to rise in value. Experts estimate that the digital currency could reach $100,000 in the coming months. In fact, Mick McGlone, chief strategist at Bloomberg, expects the price of the digital currency to exceed $100,000 in 2025. Tom Lee, co-founder of Fundstrat and Wall Street analyst, predicts the price will reach $168,000 by early 2025. The current economic environment should prompt people to invest in alternative assets, such as Bitcoin and cryptocurrencies, and in traditional safe havens, such as gold and precious metals.
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