Master your cryptocurrency trading skills by joining our #1 cryptocurrency trading course. Get started for free!
An Introduction to Bitcoin (BTC)
What is Bitcoin?
In 2017, Bitcoin’s price for one unit passed $11,500 for the first time. Though, the quintessential cryptocurrency’s story didn’t just start there.
Bitcoin’s origins go back to 2009, where its unknown creator (under the alias Satoshi Yamamoto) implemented the mining process. Mining necessitated Bitcoins being created, transacted, and verified on a blockchain.
To further elaborate, a blockchain is a system that maintains a record of crypto transactions across several computers that are linked together in a network.
In 2010, somebody swapped 10,000 bitcoins for two pizzas. This action was unprecedented at the time – because bitcoin had only ever been mined. Never traded. Therefore, it wasn’t possible to place a monetary value on bitcoin.
What makes the above anecdote so jaw-dropping?
Well, at the cryptocurrency’s peak, that same number of bitcoins would’ve been worth $100 million. No pizza could possibly taste that good!
The Current Price of BTC/USD
Why Use Bitcoin?
Uses of Bitcoin range from booking hotels on Expedia to shopping for furniture on Overstock and buying Xbox games. Though given the success Bitcoin has had on the market, its most popular means of use is through trading.
One of the main features of Bitcoin (and other cryptocurrencies) is the anonymity and lack of regulation, no matter where in the world it’s being spent. Bitcoin cuts out the middleman and removes banks from the equation. While small businesses enjoy using them because there are no credit card fees.
Buying and Selling Bitcoins
A plethora of marketplaces known as “bitcoin exchanges” provide a platform for people to transact the cryptocurrency using other kinds of money.
As an example, Bitstamp, Bitfinex, and Coinbase are three prominent exchanges. Unfortunately, with Bitfinex getting hacked in 2016 (leading to a loss of 10s of millions of dollars), security has become a rising concern.
Bitcoin Price Predictions For 2019
Bitcoin Has Recently Taken a Hit
Recently, Bitcoin’s price dropped 15%, seemingly a result of the unspectacular launch of the Bakkt crypto platform.
As of this writing, the price for Bitcoin is at $8,060—a far cry from its 2017 heyday. Though, still quite impressive—consider where cryptocurrency started.
Further research suggests there could be a concerning systematic trend in bitcoin price movement. The price is expected to tumble way more than average in the face of CME’s bitcoin futures contracts being settled each month.
These contracts do cash trade-ins and reportedly allow traders to bet against Bitcoin and short its price. All while Bitcoins never actually change ownership.
It will be interesting to see how Bitcoin responds to this challenge over time.