There are a lot of questions you may want to ask about cryptocurrencies and Bitcoin in particular. Interest in the world’s first mainstream cryptocurrency is coming fast and they are relentless now that the price has really started to take off and more and more people are taking notice of it. However, with so many eyes on cryptocurrency, some people may have some pretty basic questions that they feel are a little silly and they simply do not wish to ask them. Yet we are here to tell you that no question is a silly one, we all have different knowledge of Bitcoin and so asking a question is simply our way of gathering more information. So here are some of the questions that you may be afraid to ask about Bitcoin.
Is it a scam?
Let’s get this one out the way right away, the simple answer to this question is no and there are a few reasons why. Firstly it is a completely independent currency, it is not owned or controlled by a single entity, this means that if someone was to suddenly remove their bitcoin from the markets, or to simply state that the price is much higher or lower, then this would make no difference to the ecosystem. Not a single person can control it and so it cannot be a scam. The second point is that the price is controlled by supply and demand, it is an open market that anyone can trade on, anyone can buy or sell, so you are able to sell your bitcoin at any time, you are not forced to hold and you are not stuck with them, a scam would not allow you to sell at any time in order to get your money back. To put it simply again, Bitcoin is certainly not a scam.
Is it a bubble?
This is a slightly harder question to answer, there is evidence that it may be a bubble, but there is also evidence that it is not, but what you really need to ask yourself is whether or not it is actually a bad thing even if it was a bubble. Of course, if it is not then that is great, the price continues to rise and rise. If however it is a bubble and at some point, it bursts, there is nothing to say that the price won’t recover and then continue to rise afterward. Look at the dot-com bubble, that burst, but now the internet and internet-based businesses are bigger than they ever were within that bubble. Yes, bubbles bursting can be pretty bad short term, but they don’t mean that things won’t be successful in the long run.
What is it?
A lot of people may be hearing about Bitcoin for the first time, so while it may seem silly to not know what it is, many people won’t and so this is not a bad question at all. Bitcoin is a cryptocurrency, this means that it is a currency that exists only on the internet and is based on a form of an algorithm, or a blockchain in this case. Bitcoin can be used as a currency, traded and exchanged for goods or other currencies. The way it works is that each person has a wallet with their coins in, you can then send the information, computer algorithms and processing power is used to confirm each transaction and not one person has any control over the network. All transactions can be seen within the blockchain. There is of course more to it, but we would be here for hours trying to explain everything.
How do I store Bitcoin?
Actually, another good question, when we think about storing our money we think about banks or our wallets, the latter is exactly how we store Bitcoin too, in a wallet, only that it is a digital wallet rather than a physical one. This wallet acts as our safety deposit box for our Bitcoin, any bitcoin that is sent to us will go to that wallet and anything that we wish to send will come out of it. No other person will have access to it apart from you and as long as you keep the credentials, the wallet will be around forever, as it is recoverable on other devices with those credentials.
Can you trade it?
Yes, you certainly can and there are a few different ways that you can do it. You can simply buy or sell it, there are many exchanges that allow you to buy bitcoin with your local currency or to sell it in order to get your currency. You can also trade it like you do in the foreign exchange markets, many brokers that offer Forex services are now enabling you to trade cryptocurrencies like Bitcoin too. This makes it extremely accessible and easy to trade on the global markets, there are even Bitcoin or cryptocurrency-specific brokers popping up that have very good trading conditions available on them.
What can you spend it on?
Pretty much anything. Bitcoin is becoming more and more accepted. In fact, no matter which country you live in, there will be services and shops available for you to spend your Bitcoin on. Even places like PayPal, the world’s most popular payment processor, are now accepting Bitcoin and allowing you to purchase through them and to pay through their portal with Bitcoin. There are a lot of shops that now accept it too, if you are looking for pretty much anything on the internet you should be able to find it available for Bitcoin. So while you might not be able to use it in your local shops, you can online, but there is nothing to say that your local shops won’t start accepting it any day now, more and more companies are each and every day.
Those are some of the questions that you may be afraid to ask, but you should’;t be, we all have different knowledge and different understandings of what Bitcoin is, the whale cryptocurrency world is a brand new one, and not one knows everything about it as it is constantly developing. If you have questions you should ask them, no matter how silly it may seem to you, just ask away, you will gain a lot more knowledge doing that than sitting on your question and never finding out the answers.