Pros of Bitcoin
- Reputation – Most reputable cryptocurrency on the market
- Security – Unlike Ripple trading, Bitcoin is completely decentralized with a high level of transactional privacy
- International Fees – International transfers of Bitcoin are faster and cheaper than traditional banking services
- Availability – You can make/receive payments 24/7, providing you have internet access.
Cons of Bitcoin
- Protection – Bitcoin transactions are immutable, meaning that once the money leaves your wallet, there is no way to get them back.
History – A brief history of Bitcoin trading
2008 saw a paper called “Bitcoin – A Peer to Peer Electronic Cash System” posted to a discussion on cryptography. By 2009, the BTC software was made available to the public and mining began (the process of creating new Bitcoins, recording and verifying transactions on the blockchain).
In 2011, as BTC’s popularity started to spike, new cryptocurrencies joined the market. Litecoin trading was one of the first and, to this day, is one of Bitcoin’s biggest competitors.
A challenging couple of years followed for BTC. During 2013 Bitcoin saw its first “crash”, falling from $1000 to $300 and in January 2014, over 850,000 Bitcoins were stolen from one of the best Bitcoin trading sites at the time, Mt Gox.
2017 & 2018 were milestone years for the cryptocurrency as BTC reached and surpassed the $10,000 mark. Bitcoin also split into Bitcoin Cash (BCH) & Bitcoin. As interest in the real-world use of Bitcoin increased, by businesses mainly, the need for a larger volume of transactions to be processed per second increased too.
The first Bitcoin ATMs were distributed worldwide in 2019. Last year, PayPal announced that users were now able to buy Bitcoin on its platform. This announcement saw the price of BTC:USD rise well above the previous best Bitcoin trading price, reaching more than $28,000.
February 2021, Elon Musk & Tesla announce the acceptance of payments, cementing the real-world value of BTC. Naturally, the news created a positive movement in the market and has seen BTC raise substantially beyond any previous all-time highs, with a price of $44,200 (BTC: USD).
Development – Development of the #1 cryptocurrency
In 2009, the first Bitcoin block was mined – referred to now as the Genesis block.
The first notable hard fork of BTC is Bitcoin X.T.; this was launched in 2014 and allowed for 17 extra transactions per second. After six months of success Bitcoin X.T. lost user interest, leading to the creation of Bitcoin Classic. Bitcoin Classic followed a similar path to Bitcoin X.T. and, although both still exist, the crypto community have moved on to other options.
2017 saw the implementation of a soft fork, Segregated Witness (which we go into greater detail later) and the hard fork, Bitcoin Cash trading. BCH is currently the fourth-largest digital currency by market cap. It has proven particularly popular with business owners due to the fees and execution of each transaction being much faster than most international bank transfers.
Bitcoin Gold soon followed BCH, and this hard fork aimed to restore the basic GPU (graphics processing units) mining functionality, as many felt that mining had become too complex.
Statistics & Major Facts – Facts to know before you buy Bitcoin
Bitcoin has a circulating supply of 18,623,950 BTC, with a maximum supply of 21,000,000. The largest volume of BTC is currently being traded on Coinbase Pro, one of the best Bitcoin trading platforms to buy crypto online.
When mining, Bitcoin uses the proof of work process called Secured Hash Algorithm 256 (SHA-256) and each block is created, on average, every 10 minutes. Similar to Ethereum trading, miners’ rewards are halved (also known as “the halvening”) every four years. BTC is currently on block 669,835, with plans to split rewards from 6.25 to 3.125 coins at block #840,000.
As of February 2021, the Bitcoin ROI was 34102%, with a value of $46,161.46. In 2010, someone decided to trade their BTC for the first time, swapping 10,000 BTC for two pizzas. Currently, 10,000 BTC would equate to $460 million – that’s a couple of expensive pizzas.
Security, Features, Use Cases – Is Bitcoin risk worth the reward?
Bitcoin’s most common vulnerability is in user error, as we saw from the hack back in 2014. Owners of Bitcoin will store their BTC’s, as well as other assets, in an exchange directly (allowing for quick Bitcoin trading), or their crypto wallets. These can be kept online, or in offline wallets called hardware wallets. Without the correct password protection, wallets can be easily accessed, lost or completely stolen.
Although the U.S. is home to the most secure and stable financial system in the world, there is a growing interest in Bitcoin and particularly having complete control of your assets. For those living in countries with a less secure financial system, political unrest or access to a bank account, Bitcoin offers a financial service that can be accessed through a smartphone alone. Allowing them to buy Bitcoin directly, store other assets and transfer wirelessly.
Peter Wuille presented the idea of Segregated Witness (SegWit), a soft fork of Bitcoin, in 2015. SegWit was later implemented in 2017 and is the process of increasing the block size limit by removing signature data from Bitcoin transactions. This process increases the 1 M.B. limit for block sizes by nearly 4x, creating a faster & smoother running network.
As Bitcoin becomes more recognized, we are seeing plenty of services & goods starting to accept the online currency. Musicians, such as Dolly Parton & Imogen Heap, are now accepting BTC in exchange for album downloads. Microsoft accepts Bitcoin in the app store, allowing you to download movies, games and other app-based services. Expedia is also backing Bitcoin, accepting the currency to pay for flights and hotels.
The crypto-gambling industry is benefiting from the rise in legislation over recent months. In many cases, U.S. nationals are banned from gambling online and are turning to crypto-based casinos and gaming sites.
How to Trade – Top exchanges when trading Bitcoin
Some of the best Bitcoin trading sites include Coinmama, CEX.io, Bittrex and Kraken. It is worth reading up about all available exchanges and considering what level of trading knowledge you hold. This will be a crucial factor in whether you choose a simple platform like Coinbase, or a more intricate exchange such as Binance, home to over 200 different cryptocurrencies, including its own Binance Coin trading.
We want to help set you up on one of the best Bitcoin trading platforms, Kraken. Firstly, open your preferred browser and make sure you are visiting the official Kraken website. In the top-right hand corner, click on “Create Account”. On the newly loaded screen, input your email address, a username (this cannot be changed at a later date), a strong password and country of residence.
Confirm your password, complete the captcha if requested and select “Activate Account”. Congratulations, you are now the owner of a Kraken trading account!
To secure your account, you will want to set up your two-factor authentication. This will add a second level of security to your account and, if your account is compromised, makes things very difficult for a hacker to withdraw, or trade any of your assets.
To verify your account, click your name in the top-right corner and select “Get Verified”. To become an “Intermediate”, or “Pro” user, you will need to supply documentation proving who you are, and your residence. Once you have chosen your verification level, follow the simple on-screen form and upload your Passport or Driving License. Next, upload a utility bill, bank statement, credit card statement, tax document or insurance statement (all dated within the last three months), Valid SSN (Social Security Number) or ITIN (Individual Taxpayer Identification Number) and a face photo.
Depositing funds is nice and simple, although first-time deposits are subject to a 72-hour withdrawal hold on your account. Click Funding, select your preferred currency and the “Deposit” option (FedWire or SWIFT). Review any important notes & instructions carefully, process the payment, wait for the required processing time, and voila. You can now buy yourself some Bitcoin! Simply head to the market, select “BTC:USD”, enter the amount and whether you are looking to buy Bitcoin, sell Bitcoin or margin trade Bitcoin.
Future Outlook – What does the future hold for Bitcoin trading?
Tesla has accepted Bitcoin as a payment method and, in doing so, have cemented BTC’s real-world use.
In a statement on 8th February 2021, Elon Musk said to “further diversify and maximize returns on our cash”, Tesla “expect to begin accepting bitcoin as a form of payment for our products in the near future”
The future of Bitcoin? As the world’s wealthiest person invests $1.5 billion into the #1 cryptocurrency, we think it would be fair to suggest that other big companies will soon start to follow suit. Market value is already soaring after just one day of the news being released, and we cannot see this slowing down just yet. 2021 may well be the biggest year for the best cryptocurrencies to invest in yet.
Reputation and Customer Feedback – Slowly being accepted by the masses
In the beginning, Bitcoin’s reputation was questionable. Many doubters, scare-mongers and those just scared of the unknown had a lot of negative things to say. However, Bitcoin has stood the test of time, and there is a reason it is the #1 ranked cryptocurrency.
Bitcoin makes up the majority of most investor’s portfolios and is backed by several big names including Elon Musk (mentioned earlier), and Silver Lake Co-Founder, Glenn Hutchins, who defended Bitcoins reputation saying “In the U.S., 80-90% of $100 bills are used for organized crime and tax evasion, and there’s a very good reason for that – they’re untraceable and fungible. However, Bitcoin leaves a permanent, unalterable record, hence why almost all criminals using it are caught. It is fundamentally wrong to say that Bitcoin is mostly used for crime”.
JP Morgan, the U.S. investment bank, also commented this week that Bitcoin could eventually hit $146,000, providing it further cements itself as “an alternative to the precious metals”.
Overall Conclusion – Thinking of investing in Bitcoin?
Initially, Bitcoin trading and investing can seem intimidating. There are many stories surrounding Bitcoin scams and people losing money. Although aspects of this may be true, your BTC’s security is, ultimately, down to you and it has never been easier for you to invest safely. Always remember to buy crypto online from a licensed exchange to avoid any potential Bitcoin trading scams.
Due to the real-world demand for security, privacy and lower fees, we would not be surprised to see Bitcoin being introduced as a legitimate form of payment for assets such as property, cars and land in the not-too-distant future.
Bitcoin is currently valued at over $46,000 and has just been backed by the wealthiest person in the world. As previously mentioned, with Tesla planning to accept payments, it will not be long before other big-name companies start to jump on the Bitcoin train.
BTC is breaking through all-time highs, and we cannot see this slowing down for some time. (This is not investment advice)