2017 is the year of Bitcoin. The cryptocurrency that jumped over 1,000 % in value this year, has now caught the attention of anyone looking for a shortcut to their retirement.
Whatever your end goal is, Bitcoin might just help you get there. Whenever the next crisis hits, the world is likely to turn from fiat money to cryptocurrencies, of which Bitcoin is –by far– the most popular.
What is Bitcoin?
Bitcoin is a digital currency that allows peer-to-peer transactions. In other words: it allows me to send money to you without the need for banks. In a matter of minutes you will have your money, and the transaction costs are negligable.
(Try doing that with a regular international bank transfer!)
Bitcoin and the underlying technology called the blockchain can take a while to understand. Nobody does a better way of explaining this in layman’s terms than Bitcoin evangelist Andreas Antonopoulos.
Why Bitcoin keeps going up
Since banknotes and coins are no longer backed by gold, central banks can basically create money out of thin air. In contrast, there will never be more than 21 million Bitcoin in circulation.
This artificial scarcity prevents inflation. What’s more, it encourages deflation: the value of one Bitcoin has recorded astronomical gains in 2017.
Whereas one Bitcoin cost $1,000 at the beginning of the year, at the time of writing this article it’s eyeing an all-time high of $12,000. That’s a whopping 1,100 percent gain.
And it’s only the beginning, if we are to believe the bullish predictions from traders, entrepreneurs, institutional investors, and even politicians. The wildest predictions see one Bitcoin hit $1+ million a few years from now.
You can get a fraction of a Bitcoin
One argument Bitcoin newbies have used to not buy in, is the price of a Bitcoin. At over $10,000 it may seem rather expensive, but don’t worry: you don’t have to buy a whole Bitcoin to join the party.
You can buy a fraction of Bitcoin, depending on the money you’re willing to invest. So, for example, if you wanted to buy only $30 worth of Bitcoin each month, you could. However, in order to keep the fees (relatively) low, it would be better to save up a little, and then exchange your dollars or euros for Bitcoin.
Ready to make your first investment in Bitcoin? In just 3 steps, you can get and securely keep this cryptocurrency.
Step 1: Sign up for Coinbase
You buy your Bitcoin at a cryptocurrency exchange. This is like a stock exchange, so it may take some time to get your account set up. That being said, Coinbase is one of the most user-friendly exchanges and they have a smartphone app as well as the website.
So go there and create your account. Cryptocurrency exchanges will have to verify your identity, so have your passport and a proof of address ready (a recent utilities invoice or bank statement will do).
It is also recommendable to activate 2 Factor Authentication. This requires you typing in a code that the Google Authenticator app generates every minute. In the event of someone getting your login details, they would also need your phone in order to get to your Bitcoin wallet.
Step 2: Buy your Bitcoin
Bitcoin’s value goes up and down. The lower the Bitcoin exchange rate, the more Bitcoin you will get for your money. This is what a trader does: wait for the right moment to buy (and sell). You can check the market movements on GDAX.
Coinbase allows you to buy Bitcoin with your creditcard. A bank transfer is possible, too, but it takes days before your money is credited to your account, at which time you may get a lot less Bitcoin for your buck.
Step 3: Get a safe Bitcoin wallet
Your investment is only as safe as the exchange you use. While Coinbase claims to insure each Bitcoin wallet against hacks, the safest way to keep your Bitcoin is in a paper wallet or on a hardware wallet like the Ledger Nano S. Like that, hackers can’t steal your private key – sort of like the PIN number to your bank card.
How to get your $10 Coinbase bonus
If you sign up for Coinbase using this affiliate link, you and I will both get a $10 (or € 8) bonus for each $100 (or € 84) you spend on Bitcoin. That’s a win-win, right?
Let me know how it went and whether you would like to learn more about Bitcoin or other altcoins. It’s fast becoming one of my favorite subjects!
Thanks for this easy understandable intro to Bitcoins. I may jump on this ship:)
You’re welcome! If the predictions are not too far off what’s going to happen, you won’t regret it. 🙂