With the cryptocurrency frenzy at an all-time high, beginners have many questions in their minds before starting their crypto trading journey. From what is liquidity to which are the best exchanges available, there’s a lot they have to know. If you’re an ardent crypto enthusiast who wants to begin trading cryptocurrency, you should start by learning more about the top cryptocurrency leading the space, i.e., bitcoin. To make your work easier, we’ve listed down five things you should know about this top, popular cryptocurrency.
1. Bitcoin has a Finite Amount
There are 21 total million bitcoins that can ever be produced and, due to this finite quantity, if demand for bitcoins increases and the price goes up, so will the demand. It’s not clear if all 21 million bitcoins have been extracted until now, but once they’re mined, they’re done. Each bitcoin could be divided into eight decimal points and even potentially smaller units if the need arises in the future. Furthermore, bitcoin transactions can be performed in smaller units referred to as “bits,” and there are 1 million bits in a single bitcoin. At present, the value of all bitcoins is greater than $20 billion.
2. Bitcoin is a form of a Currency
Ever wondered what is Bitcoin? Well, it is an electronic currency that utilizes encryption techniques to manage its creation and ensure secure transactions without the central bank. The encryption methods make it extremely difficult to create counterfeit forms of any kind. You can consider bitcoin is pretty much like the cash for the entire internet. Users can buy bitcoins or fractions of bitcoins through online exchanges or from a broker and keep them in a digital wallet. Many stores accept bitcoin, and billions of dollars’ worth of bitcoins is traded daily across the globe.
3. Bitcoin has a Fair Share of Critics and Fans
Billionaire Warren Buffett has been a vocal opponent of bitcoin. He blasted bitcoin in the course of a 2014 CNBC interview in which he advised users to “stay away from it.” He even told viewers that Bitcoin is a mirage. Jamie Dimon, CEO of JPMorgan Chase, is also a bitcoin critic and previously described bitcoin as “a fraud.”
Yet, despite the negative comments, there are still plenty of supporters. A few notable investors include Tyler and Cameron Winklevoss and the billionaire venture capitalist Tim Draper. In fact, Richard Branson has spoken positively about cryptocurrency. He recently made a bet on the start-up of a bitcoin blockchain wallet which is basically software that can store and manage bitcoin cryptocurrency.
4. Bitcoin Will be Trading on Three Major Exchanges
The U.S. CFTC announced it would permit bitcoin-related futures trade at three notable exchanges: the Chicago Mercantile Exchange Inc. (CME), CBOE Futures Exchange (CFE), and the Cantor Exchange (Cantor). This means that investors will be able to place bets on bitcoin without actually purchasing it.
According to J.Christopher Giancarlo, the chairman of CFTC, bitcoin, as a virtual currency, is a commodity unlike any the exchange or commission has dealt with in the past. He even cautioned the investors that they should be aware of the high level of volatility and risk associated with trading bitcoin in any of the approved mediums.
5. A Mysterious Creator
In 2009, a prototype was made public on a cryptography mailing list under the name of Satoshi Nakamoto. Bitcoin was described as a peer-to-peer electronic cash system in this document. The initial 50 bitcoins were mined on the 3rd of January, 2009, by Nakamoto, who is said to have quit the project in 2010. The community grew, and later other developers joined the project. However, since the start of bitcoin there has been a constant dispute about the identity of Nakamoto. There is no way to determine whom or who Nakamoto is; however, some have attempted that eventually failed.
Now that you’re what Bitcoin is, you can consider starting your investment journey with this cryptocurrency.