Pros of Bitcoin
- World’s largest cryptocurrency
- Backed by institutional investors
- Broad range of real world uses
- Seen as an inflation hedge
Cons of Bitcoin
- Slower transactions that some rivals
- Volatile asset
History – A brief history of Bitcoin
A pseudonymous inventor called Satoshi Nakamoto began writing the code for the Bitcoin blockchain back in 2007. He registered the bitcoin.org domain name in August 2008, and then published a paper – Bitcoin: A Peer-to-Peer Electronic Cash System – explaining his vision two months later.
Nakamoto released version 0.1 of the Bitcoin software on SourceForge in January 2009, and launched the network by mining the first every block, which had a reward of 50 BTC. It was the height of the global financial crisis, and he chose to enter the text “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” into the Coinbase transaction, referencing a headline from the British national newspaper.
A cypherpunk called Hal Finney received the first-ever Bitcoin transaction on January 12, 2009. He downloaded the Bitcoin software on its release date, and received 10 BTC from Nakamoto. The first commercial transaction using Bitcoin took place the following year, when programmer Laszlo Hanyecz bought two Papa John’s pizzas for 10,000 BTC.
The price of Bitcoin started at US$0.30 in 2011 and increased to US$5.27 by the end of the year. It went from $13.30 in January 2013 all the way up to US$770 by the start of 2014. Volatility ensued, and it was hovering below US$1,000 by January 2017, but a prolonged bull run brought it into the mainstream that year. BTC reached an all-time high of almost US$20,000 by December 2017, making several people rich.
The number of Bitcoin exchanges increased dramatically during that year, and there are now even more cryptocurrency exchanges to choose from. Bitcoin had dropped to just US$4,000 by March 2020, but then shot up to new record highs by the end of the year and broke through the $40,000 barrier for the first time in January 2021.
Development – What was Bitcoin developed for?
Bitcoin needs to be mined. This process ensures the blockchain remains consistent, complete and irreversible by repeatedly grouping new transactions into a block. This is then broadcast to the network as part of the crypto mining process, and verified by recipient nodes. Miners are given a reward in BTC for their efforts. Analysts estimate that Nakatomo mined around 1 million BTC before disappearing in 2010, handing the network alert key and control of the code repository over to Gavin Andresen.
Andresen, who became lead developer at the Bitcoin Foundation, oversaw the decentralization of the blockchain. Wladimir van der Laan took over as lead developer in April 2014 after Andresen left to dedicate himself solely to the foundation. There have been several key developments in the ensuing years, including a SegWit software upgrade in 2017.
There have also been several forks resulting from disagreements among Bitcoin developers and proponents. Bitcoin Cash was created as the result of a hard fork in 2017, while Bitcoin Gold was created in another hard fork later that year. Litecoin is an early spin-off from Bitcoin, and Bitcoin SV resulted from a hard fork from Bitcoin Cash.
Statistics – Facts you need to know before signing up to Bitcoin exchanges
Supply Bitcoin is capped at 21 billion coins. That creates some scalability issues, but the finite supply arguably has the potential to make it a valuable asset in future. The current circulating supply of Bitcoin reached 18.6 million by January 2021.
You are by no means obliged to purchase an entire Bitcoin when you buy crypto currency online. The best exchanges for Bitcoin will allow you to simply allow you to enter the amount you wish to spend, calculate the Bitcoin exchange to dollar and tell you the fraction of a Bitcoin you will receive, once Australia crypto exchanges fees have been deducted.
The satoshi is currently the smallest unit of the Bitcoin currency recorded on the blockchain. It is a one hundred millionth of a single Bitcoin, so you can essentially think of yourself as buying and selling several satoshis if you are trading at lower levels at the top cryptocurrency exchanges.
Bitcoin miners initially received ₿50 per block, but that reward has been halved every 210,000 blocks since then. It dropped from 12.5 to 6.25 in 2020, and it is expected to halve again by around 2024. The halving will continue until the last Bitcoin is mined in 2140. The Bitcoin ledger has a SHA-256 hash function and operates on a proof-of-work system.
Security, Features and Uses – What you can expect from crypto exchanges Australia?
Bitcoin is a decentralized cryptocurrency that cuts out the middleman and facilitates peer-to-peer online transactions. That makes it quicker, more secure and theoretically more cost-effective than sending fiat currency via a traditional financial institution. It was designed to serve as an online currency on a native blockchain, and it does have several real-world uses.
You can buy property, cars, fine wine, jewellery, holidays, gadgets, food, coffee, lap dances, plastic surgery, tickets to sporting events, guns, Rolex watches, furniture, vacuum cleaners, gold and even funerals. Several charities also accept Bitcoin. Many users pay for services with Bitcoin too, and a lot of businesses use it to conduct transactions.
Yet many people see Bitcoin moving away from its initial purpose as a currency and becoming more of an asset, akin to gold. The price fluctuates dramatically on a weekly basis, so it is highly volatile, but it has broadly charted an upward trajectory over the past decade and many people view it as a hedge against inflation during times of economic uncertainty and quantitative easing. Institutional investors are now increasingly visiting Bitcoin exchanges and checking out our cryptocurrency exchanges list as they seek to diversify their portfolios.
Bitcoin transactions are secure, but storing Bitcoin leads to a number of security concerns. There have been numerous high-profile hacks over the years, and Bitcoin is highly vulnerable to theft through scamming and phishing. More than 1 million Bitcoins have been stolen from cryptocurrency exchanges, so it is generally advisable to transfer your BTC from Bitcoin exchanges to your wallet as soon as you have purchased it.
You will incur a withdrawal fee, but it is worth it, as Australia crypto exchanges are regularly targeted by hackers and this nascent industry is not heavily regulated like the traditional financial sector. Web-based crypto wallets are insecure, so you should consider moving your BTC to an external wallet if you plan to hold it for a while. You can opt for a software wallet on your mobile or desktop, but you would be better off investing in a solid hardware wallet made by Ledger or Trezor.
That allows you to store your Bitcoins offline, where they are free from hackers. You can then use your wallet to make transactions, or link it up with a software wallet to manage it. Just remember that Bitcoin exchange sites can be great for buying and selling BTC, but there is a significant security risk if you leave your balance in your account for a lengthy period of time.
How to Trade – Top tips for crypto exchanges Australia
If you choose one of the top Bitcoin exchanges from our cryptocurrency exchanges list, the trading process should be quick and simple. Click through to one of the leading crypto exchanges Australia, such as Coinbase. Click on the “Get started” button at the top right of the homepage.
You can then enter your first name, last name and email address, choose a password, certify that you are over 18 and agree to the terms and conditions. Click “Create account”. You will then have to click through from a link sent to your email address to confirm it, and submit scans that verify your identity and address (such as a passport and bill).
The process is pretty similar with the majority of sites on the Bitcoin exchanges list. Once your account is verified, you can start trading. Click “Buy / Sell” to bring up the trading box. It should automatically be set to Bitcoin, as that is easily the most popular coin at cryptocurrency exchanges. But you do have the option of Litecoin trading, as well as many other altcoins. Enter the amount you wish to buy in AUD and it will work out the Bitcoin exchange for cash rate for you.
Click “Preview Buy”, and it will tell you the Bitcoin exchanges prices, the cryptocurrency exchanges fees and the amount of BTC you stand to receive. If you are happy with it, click “Buy Now” to confirm the transaction.
You can switch to “Sell” or “Exchange” at the top of the trading box. If you want to sell BTC, you have to transfer it from your wallet to the exchange first. Then enter the amount you wish to sell, choose the destination you want to send the AUD to, and confirm the transfer. You can also swap BTC for a variety of altcoins.
The list of altcoins covered varies between different cryptocurrency exchanges. The Binance crypto exchange and Kraken crypto exchange provide more pairs than the , for instance, but some traders prefer the user experience at Coinbase. Withdrawal fees also differ, so read the crypto reviews before deciding which crypto trading site to use.
Future Outlook – What is the future of Bitcoin?
Thousands of articles, blog posts and videos are released each week on the subject of Bitcoin’s future outlook. It is the subject of intense speculation across the world. Nobody knows for sure, but many insist that the price will soon hit US$100,000 and maintain a long-term upward trajectory.
They argue that supply is shrinking as more and more investors buy it to HODL (hold on for dear life) and point to institutional investor interest as proof that it is being taken seriously across the spectrum. Many also point out that it is nowhere near the market cap of gold yet, but claim it should ultimately have a significantly higher market cap.
Yet there are also many commentators that regularly savage Bitcoin, arguing that it is a bubble waiting to burst and warning investors to stay away from it. Bitcoin certainly splits opinion, but most people agree that it will be prone to sharp volatility in the short and medium-term. The real difference lies in its long-term outlook, with some predicting it will reach US$1 million, and others suggesting it will completely fizzle out.
Reputation and Customer Feedback – Generally positive Bitcoin reviews
Bitcoin has legions of diehard fans that regularly heap praise upon it. Feedback is generally positive among those that use it for online transactions, as it is quick, secure and highly cost-effective. They appreciate that the use cases are continually increasing, and they remain bullish about its long-term prospects.
There are certainly cryptocurrencies that facilitate quicker transactions, but Bitcoin remains the benchmark against which all others are measured. It is the largest and most popular cryptocurrency by a huge margin, and rival coins will likely fall by the wayside as Bitcoin simply becomes increasingly prevalent in future.
Conclusion – Time to sign up to the best crypto exchanges in Australia!
The leading Bitcoin exchanges allow you to buy and sell BTC quickly and easily. However, there are several to choose from and they all have different attributes, so our Bitcoin exchange guide can help you find your perfect match. If you are a beginner, you might prefer to use a site like our Coinbase review, which is among the Bitcoin exchanges by volume and operates all around the world, with Bitcoin exchange to euro, dollar, and various other fiat currencies available.
If you plan to trade larger volumes and you want to benefit from more sophisticated analytical tools, while also trading a wealth of altcoins, Binance might be a better choice. Just make sure you stick to popular, reputable Bitcoin exchanges that offer transparency, a strong recent security record, decent customer service and reasonable trading fees.