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Money without banks, bank fees and inflation? Is it possible? Since the inception of bitcoin, thousands of cryptocurrencies have been issued in answer to that question, all made possible by blockchain technology.
Today, the most commonly used are bitcoin, ethereum, XRP, bitcoin cash and litecoin.
Bitcoin blockchain
Blockchain is a data system that’s secured through thousands of computers around the world, with no central point to attack. This is different from the way traditional money works because we trust the institutions that print and store money – the central banks. To replace the trust that we have in these institutions, the bitcoin blockchain verifies and secures bitcoin transactions throughout thousands of computers spread around the world. This process cuts out the middlemen while making all the information transparent for anyone to see (called ‘decentralization’). Jennifer can’t say that Bob’s bitcoin is hers because there are thousands of computers that prove it belongs to Bob. If Bob gives Jennifer some of his bitcoin, thousands of computers will reflect that transaction as well.
How to buy cryptocurrency
Choose a credible cryptocurrency exchange. Sites such as Vancouver-based netcoins.ca make it easy to get into the crypto market – even for beginners – by providing an easy-to-use platform and high-level customer service by phone, email or live chat. Knowing the people and companies behind the platform is the best way to avoid fraudsters.
What can I do with bitcoin?
Bitcoin is viewed by many as a kind of digital gold. In the same way people would buy and hold gold investments, people are buying and holding bitcoin investments. That’s because they see bitcoin as a hedge against inflation; a way to protect their savings from losing purchasing power over time. This is the primary reason people, companies and institutions have been buying bitcoin in 2020 and 2021.
Some people also trade bitcoin like they do stocks, buying dips and selling when a specific return has been made. Investors may hold bitcoin for the long term or make frequent trades with it.
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