What is Bitcoin (BTC)? A comprehensive guide on Bitcoin investment for beginners

By Le Anh | Invest

What is bitcoin (BTC)

You must be very curious: "Why are people rushing to buy Bitcoin?"

What value does Bitcoin attract to make so many people invest in it? This article will explain Bitcoin and help you understand why Bitcoin is so attractive.

Before going into the details of today's article, if you are new to Bitcoin. In addition to this article, you can read the following articles to better understand Bitcoin investment is how:

The brothers are ready to go into detailed articles about Bitcoin due Coin98 done yet?

Let's start learning about the world's first cryptocurrency called Bitcoin.

Bitcoin call-to-buy

Famous photo of a fan calling for Bitcoin when Former Fed Chairman Janet Yellen testified before Congress 1

Bitcoin or BTC is the first cryptocurrency in the world and lays the foundation for the development of the market Cryptocurrency.

Bitcoin uses the peer to peer protocol (peer-to-peer) for all transactions. And, that is why Bitcoin has eliminated the intermediary step in the process of making transactions.

This means that transactions will be made directly from the sender to the recipient with extremely low transaction fees (almost zero) without going through any intermediaries or organizations.

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What makes Bitcoin different?

What is bitcoin-like

As mentioned above, Bitcoin is a digital currency so it has no shape. It is like all mainstream currencies like USD, Euro, VND ... but electronically encrypted.

What makes Bitcoin different is the following 6 factors:

1. Bitcoin is completely decentralized

Different from paper money (Centralized), Bitcoin is not controlled by an organization like a bank or a government.

2. Bitcoin cannot be created but can be mined (also known as Bitcoin mining).

Listen to this sentence, do you think of something of a similar nature?

Exactly! It is Gold

3. Bitcoin cannot be counterfeited

4. Low transaction fee

5. The security of Bitcoin is very high

You can't hack into Bitcoin's network.

If you want to do that, you need to hack into all the nodes in the Bitcoin network at the same time.

And to do this is almost impossible!

6. You cannot get your money back once the transaction has occurred

Why is that? Because once the information has been written to the blockchain, no one can change or modify that information.

All the preeminent properties of Bitcoin are built on two new technologies: CBlockchain technology and CHe distributes ledger technology.

Blockchain technology is the financial breakthrough of the future. Blockchain is designed to resist data change.

To better understand Blockchain, please watch the video below!

Information in Blockchain cannot be changed and only added with the consent of all nodes in the system. This system is preserved even when a part of the system has problems.

And yet, Blockchain has the ability to transmit data without requiring intermediaries to confirm information.

It is useful that one person can share information for multiple units in the same network being built.

Bitcoin currency will show you how interesting it is with the concept SDistributed female drive (Distributed Ledger Technology - DLT).

distributed ledger

First of all, I will explain what is Distributed ledger technology.

It is a collection of databases that are not stored or verified by any central authority.

For DLT, its integrator has greater control over how it is integrated. In principle, they are still able to dictate the structure, purpose and operation of their service network.

Distributed ledgers are seen as the first step towards Blockchain.

However, it is not made up of a series of blocks that the ledger will be stored on many different servers. We will then contact each other to ensure the latest and most accurate transaction data is maintained.

How many coins does Bitcoin have?

Next you need to know how many coins Bitcoin has and how to distinguish them.

21 million BTC That is the total amount of Bitcoin created.

No one will ever change this number, not even the founder Satoshi Nakamoto.

Currently, the number of Bitcoin mined is around 17 million BTC, which means there are only 4 million BTC left to mine.

However, the actual number of Bitcoin circulated in the market will be less than 17 million due to a number of different reasons.

Unit of Bitcoin

Bitcoin, like other traditional currencies, has a Bitcoin unit.

Bitcoin's smallest unit is named after its founder, Satoshi. At a rate of 1 Bitcoin equals 100,000,000 Satoshi.

bitcoin-unit

What is a Bitcoin wallet?

Like traditional currencies, you need a wallet when shopping. But for Bitcoin, as a cryptocurrency, must "contain" it like this here?

Each Bitcoin storage wallet will be treated as a Bitcoin account, just like your bank account or email.

Each wallet will include a public address (like the account number and owner name) called Bitcoin Address and a private key (like the password of an Internet Banking account) is a Private Key.

You will log in to the wallet with your Private Key and send Bitcoin to others via their Bitcoin Address.

wallet-bitcoin

So once the private key is lost, it means you lost your wallet and all the assets are stored there. This is like a brother dropping a wallet in the street.

So far, no-one has been able to retrieve those lost bitcoins but they are still stored on the system.

So keep this in mind, store your private key very carefully and don't reveal it to anyone!

The most prestigious Bitcoin wallet today

Like the bank account you choose to use, you often consider whether or not it is reputable. Right?

As for Bitcoin wallets, you need to know which types of wallets are reputable to deposit your Bitcoin into.

reputable bitcoin wallet

One of the two popular and reputable Bitcoin wallets today is: Coinbase wallet and Blockchain.info wallet.

In addition, if you own large amounts of BTC, you should store them in Ví Ledger Nano S or Ví Trezor to ensure safety.

Besides, you can also refer Coin98 Wallet - multi-chain decentralized wallet with high security and excellent user experience.

Where is the real value of Bitcoin?

value-of-bitcoin

In recent years Bitcoin has grown rapidly in value, Bitcoin once reached a record price of $ 20000 per BTC on December 18, 12.

But this is not its true value but only reflects the law of supply and demand of the market only.

So where is its real value? The most appropriate answer is its technology!

Because Bitcoin uses a peer-to-peer protocol (peer-to-peer) for all transactions and eliminate intermediaries in the process of making transactions. This is the reason for Bitcoin to exist.

Is Bitcoin a scam?

As people often think, the virtual thing is mostly a scam.

But Bitcoin is absolutely not!

This can be 100% sure because you have never seen gold can be deceptive?

Bitcoin cannot be created, you can only mine (dig Bitcoin) just like gold. And Bitcoin is like digital gold.

If you've ever heard of someone being cheated on Bitcoin, you can only use Bitcoin to cheat.

Is Bitcoin legal in Vietnam?

When you want to join and invest in this currency, you should know some legal provisions to avoid "Disability money".

Currently in Vietnam, there has been no official announcement to use Bitcoin currency legally. Therefore, you should never foolishly bring Bitcoin to pay when buying goods!

But when you consider Bitcoin a commodity that uses money to buy or invest, it's still legal.

So far, a lot of people have invested in Bitcoin and made a profit.

How to make a profit from Bitcoin

As I mentioned above, there are many people who choose Bitcoin as an investment channel like securities or Forex.

Now I will show you some ways to earn profits from Bitcoin.

Bitcoin Mining (Bitcoin Mining)
bitcoin-mining

The first way to help you make money from Bitcoin is Bitcoin Mining.

In order for Bitcoin network transactions to work properly, it must be verified by so-called miners - miners.

Bitcoin mining or mining requires powerful configurations and a specialized Bitcoin miner has been developed ASIC.

When you mine Bitcoin, the first consideration is how Bitcoin works, as well as the cost of Blockchain Technology.

Consensus guessing will tell you that!

Consensus algorithms is designed to ensure that transactions are valid and distributed across multiple participants to verify accuracy and create reimbursement of transactions.

There are four leading algorithms you need to know:

  • Proof of work PoW - Proof of Work
  • Proof of stake PoS - Proof of Stake
  • Delegated Proof of Stake
  • BFT - Byzantine Fault Tolerance consensus mechanism.

Bitcoin miners are similar to regular machines that have the specifications.

The unit of measurement to know how much bitcoins you dig is Hashrate. It is a measure of the computing power of equipment used to mine virtual currencies (Bitcoin Mining).

At the time of Bitcoin mining, it was necessary to solve a lot of problems, only then could it be earned. All previous transactions will be stored in the public area.

Miners gather the necessary hashes from different combinations, allowing access to secret keys and new transaction operations.

You should refer to some types of Bitcoin miners: Antminer S9, Antminer S7, AvalonMiner 761, WhatsMiner M3, AvalonMiner 821.

* On another occasion I will talk more about these devices.

Buy Bitcoin for hoarding - HOLD
hold-bitcoin

The second way I want to mention to you is to buy Bitcoin for hoarding (HOLD).

Hold is the most popular form of Bitcoin investment. And if you do not know about technical analysis, then perhaps you are suitable for this form. In essence, Hold Bitcoin is a form of buying at low prices and selling at higher prices for a long time.

There are two ways of hoarding Bitcoin (HOLD): buying Bitcoin on Remitano and buying Bitcoin on the black market. Each way has its advantages and disadvantages.

And exchanges Remitano is a large and reputable floor.

For those who want to know more about Remitano: Remitano Exchange: Guide to register and trade Bitcoin on Remitano

When you buy and sell Bitcoin here will be guaranteed of safety and fast transactions. You will not worry about being scammed when participating to buy on this floor.

Buying on the black market is a way of trading 'wild' The most and most dangerous way to buy Bitcoin. You just need to go to a shopping mall or flea market and ask a cryptocurrency trader.

For many countries, this is called a black transaction of illegal cash flow. This amount is completely invisible to the tax authorities or central banks.

Bitcoin investment
investment-bitcoin

The last way that I would recommend to you is Bitcoin investment.

Trade Bitcoin is a form of making a profit in a short period of time and usually hours or days.

This created a group of people called Trader. They use Bitcoin charting techniques. With the purpose of finding entry points at low prices and selling points at higher prices.

A pretty useful suggestion for those new to the market: Bitcoin investment roadmap for newbies

There are several ways to invest in Bitcoin that you should refer to are ICOs and Margin.

ICO (Initial Coin Offering) is a form of mobilizing investment via cryptocurrency for startups in the field of Blockchain.

To invest in this form, you will need to use another cryptocurrency, not Bitcoin.

I have a tutorial article about investing ICO: What is an ICO? A comprehensive guide on ICO investment from A - Z. You will be guided more clearly in this article.

Still Margin investment (margin trading) also known as margin trading - this is a form of borrowing money from some exchange.

If you explain it a bit, it is a form of using financial leverage. As a result, you will have more money to trade and bring higher profits.

And, of course when you join the margin in the trade coin you will be charged the loan interest.

Bitcoin investment risks

If you invest, you must take risks, right?

This is an area where people who are brave and brave enough to succeed.

Bitcoin bubble - periods of Bitcoin falling into crisis

The first risk to mention when learning about Bitcoin is BBitcoin shadow bee.

This is a phenomenon of Bitcoin spike in a short time.

For example: In early 2017 Bitcoin was priced at only $ 1000. But after 24 hours it reached the threshold of 11000 USD then exceeded 11000 USD and then returned to 9000 USD.

When Bitcoin increased so fast in 2017, there was a bubble burst in 2018 when Bitcoin had 10 consecutive declines.

This is a major risk for Bitcoin investors.

Bitcoin Halving
Bitcoin-Halving

The next risk I want to show you is Bitcoin Halving.

Halving means halving: For every 210,000 Bitcoin blocks that are born (about 4 years), the reward for digging out of a new Bitcoin Block is halved (1/1).

As a result, the total amount of Bitcoin generated is an asymptotic limit of 21 million BTC.

BITCOIN HALVING TOOLS:

Bitcoin Halving No. 1: From January 03, 01 to November 2009, 28, 11 BTC were created, which means that 2012 BTCs are mined every 10.500.000 minutes.

Bitcoin Halving No. 2: From January 28, 11 to November 2012, 09, 07 BTC were created, which means that 2016 BTCs are mined every 5.250.000 minutes.

Bitcoin Halving No. 3: From July 09, 07 to mid-2016, there will be 2020 BTC generated, which means that every 2.625.000 minutes mined 10 BTC

Bitcoin Halving No. 4: And from 2020 to 2024, 1.312.500 BTC will be generated, which means that every 10 minutes, only 6.25 BTC will be mined.

...

Bitcoin Halving No. 64: No more Bitcoin will be mined.

Bitcoin Dominance

The last risk I want to say is Bitcoin Dominance.

Bitcoin Dominance can be understood as the dominance rate of Bitcoin. This ratio represents the dominance and dominance of Bitcoin with other altcoins in the cryptocurrency market.

BTC Dominance rate is calculated by market capitalization. The higher the market capitalization of Bitcoin compared to other altcoins, the higher the percentage of BTC Dominance.

Bitcoin ATM - simple way to trade Bitcoin

Bitcoin-ATM

At this point, you understand quite well about Bitcoin but I still want to mention one more problem: How to trade Bitcoin. You should consult Bitcoin ATM, this is a very simple way of trading Bitcoin.

Bitcoin ATM (BTM) an Internet machine that allows users to exchange Bitcoin and cash. Bitcoin ATM service providers may require users to present relevant information in order to be able to conduct transactions on the machine.

Bitcoin ATM is not like traditional ATMs, because it is not connected to bank cards and users can exchange directly between Bitcoin and cash.

Some two-way Bitcoin ATMs allow withdrawals of Bitcoin or cash. Currently, the highest transaction cost at Bitcoin ATM is 7%.

summary

Hope article today is already bring useful knowledge for you. In the following articles, I will guide you to learn other cryptocurrencies and how to invest Bitcoin for newbies.

If you have any questions, please comment right below this article. Or, can contribute comments in Coin98 Finance Please! Coin98 will try to answer as soon as possible.

In addition, I have made a video introducing some good books on Bitcoin investment for those who are interested. Let me see the video below!

And now...

Hello and see you again in the next article!

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