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Bitcoin: Should You Get Onboard?

• on: Bitcoin

Bitcoin is form of currency – a decentralized global digital currency. A Bitcoin is brought into existence by mining, using computers. The easiest way to acquire Bitcoins is by exchanging Dollars, Euros, et cetera for Bitcoins. The network is set to limit the total number of Bitcoins that can be created. The value of Bitcoin is not set by a government, the value is set by what people are willing to pay for it.

Benefits

  • Decentralized – Not controlled by any person or government. The bitcoin block chain (code and ledger) resides on tens of thousands of computers. It’s a massive peer-to-peer network.
  • Global – Residing on the internet, Bitcoin can be transferred between anyone with a computer and an internet connection. Some people have even created physical coins, with the Bitcoin block encoded into them.
  • No Fees – For the most part, when transferring Bitcoins, no fees are incurred for domestic and even international transactions.
  • Secure – The ledger is public record, it’s for all intents and purposes impossible to tamper with Bitcoin.

Risks

  • Hacking – The bitcoin network itself is secure, but the exchanges are a weak point. - Bitcoins have been stolen from online wallets and there is no way to recover them. Putting your coins in cold storage—storing them offline on a USB drive removes a lot of the risk. - Exchanges have also closed, taking users Bitcoins with them.
  • Regulation – It would be unwise for a country to smother Bitcoin, because it’s global and would give other countries an edge. However the fundamental laws and rules are still being created by Government, e.g. how Bitcoin profits will be taxed.

Positive Reception by Senate

Regulators See Value in Bitcoin, and Investors Hasten to Agree – NYTimes.com

  • “…considered currencies or whether they are more properly categorized as commodities or securities. The distinction will determine which agencies regulate the networks and how they are treated under tax law.”
  • “All the officials at the hearing said that crime had been an issue during the early days of credit cards and online payment systems like PayPal, and should not be a reason to limit innovation.”

Where to Buy

  • The main online exchanges are: CoinBase and BitStamp
  • CoinBase has the easiest and fastest exchange process, BitStamp takes longer.

The choice is yours! Do you want to get onboard with the world’s largest decentralized global digital currency?

I’ll be writing more posts about Bitcoin. If you have specific questions, I’ll do my best to answer them in the comments section below. For those of you who are subscribed to my newsletter, feel free to email me.