Cryptocurrency has flourished over recent years and gone from an obscure online currency to a booming market.
Today, millions of people in the UK and around the world own cryptocurrency. These digital currencies can be used for anything from trading through to buying items online and much more.
Cryptocurrencies are now similar to other Fiat currencies and can be used for a variety of different business, personal and investment activities.
The most popular cryptocurrency in the world , and the name that most people have heard of, even if they're not cryptocurrency experts, is Bitcoin.
Bitcoin is often used as a term to cover all cryptocurrencies, but it is, in fact, a specific type of digital coin.
If you're unsure about what Bitcoin is and how it works, then Traders Of Crypto has created a comprehensive set of Frequently Asked Questions.
What Exactly Is Bitcoin?
The main question on the lips of many crypto novices is: what is Bitcoin? It's a word you've probably heard a lot, but it helps to know exactly what it is, particularly if you're thinking of investing in it.
Bitcoin (BTC) was the first decentralised peer-to-peer payment solution created in 2008. Trading in Bitcoin began two years later, in 2010.
Bitcoin is decentralised and not controlled by any bank or financial institution. As such, it is a peer-to-peer solution that allows users to control their online bookkeeping.
Over the years, Bitcoin has grown in popularity and become a catch-all term often used to refer to all types of cryptocurrency.
Other cryptocurrencies are also known as altcoins, so that you can distinguish between these and the more renowned Bitcoin.
When conducting transactions with or trading with Bitcoin, investors buy and sell a piece of code that forms a part of Bitcoin's Blockchain.
Unlike money, which is backed by gold, Bitcoin and other digital cash is backed by its Blockchain. A Blockchain is Distributed Ledger Technology (DLT), which acts as a list of all the past transactions associated with a particular cryptocurrency.
This list is made up of 'blocks' of code, which act as a security mechanism to prove the legitimacy of any given cryptocurrency and show the history of its use and the past transactions that have been made with it.
As miners find new blocks, they add to the Blockchain and thus make the virtual currency even more secure.
How Did Bitcoin Start?
The idea of an online, peer-to-peer currency was discussed for many years in the 1990s and early 2000s, as the internet became more accessible.
The first of these cryptocurrencies to be launched was Bitcoin, which made its debut in 2009 on an online mailing list.
The online currency was created and launched by an anonymous individual or organisation going by the name of Satoshi Nakamoto.
Later, Nakamoto left the project, and it grew thanks to the hard work of its network of dedicated miners and crypto fans.
As Bitcoin is a decentralised digital currency with open source software, it is accessible to any interested software developers.
It's also a global form of currency that isn't tied to any particular country. Thanks to these benefits, Bitcoin has become increasingly popular.
What started as a virtual currency 11 years ago has since blossomed into a global phenomenon. There are now millions of users and thousands of new coins, all of which were born from the idea behind Bitcoin.
Bitcoin is now one of the most popular cryptocurrencies on the market, and it can be used for more than just trading.
Many major retailers allow consumers to use Bitcoin to make purchases , and traders can buy the currency using popular payment portals such as PayPal. There are even Bitcoin debit cards and bank accounts available.
Who Controls And Regulates Bitcoin?
Bitcoin and other cryptocurrencies are decentralised currencies. As such, they are not regulated by any country, government or bank, like traditional fiat currencies.
No one owns the software behind Bitcoin, and as such, it is controlled by the miners who find the crypto keys and build Bitcoin's Blockchain.
These miners build the Blockchain and use software solutions, such as exchanges, to sell the crypto to traders.
If you have the money and technical skill to buy or acquire the crypto keys, then you will control your coins yourself.
Most crypto traders use exchanges and online wallets to store their tokens and buy a share in their chosen cryptocurrency.
As such, the exchange or wallet that you use controls the currency, and traders can buy Bitcoin and sell it at the prices set by the platform they use.
Therefore, these trading platforms have an incentive to protect and care for their users. That means that you're likely to get fantastic support from these platforms if you choose to use them.
In some regions, crypto is regulated by financial authorities and bound by their rules. For example, in the US, the Securities and Exchange Commission (SEC) believes that Bitcoin and other digital coins are types of security.
As such, they are bound by the SEC's rules. Other regions, such as the UK, are looking to introduce regulation for crypto.
Therefore, when you're trading in Bitcoin and using the digital currency for online transactions, you need to make sure you understand the regulations in place and any upcoming or proposed rules.
Is Bitcoin Cash The Same As Bitcoin?
If you've been doing your research, then you've probably come across the term 'Bitcoin cash'. It's easy to think that it's the same as Bitcoin, but it's not.
Bitcoin cash was developed by miners of Bitcoin who were dissatisfied with the amount of time that transactions using Bitcoin took.
As Bitcoin became more popular, transactions became even slower, so they developed a new Blockchain and created Bitcoin cash.
The main distinction between the two cryptocurrencies is that payments and transactions can be made quickly when using Bitcoin cash, thanks to its block size, which is larger than traditional Bitcoin.
Bitcoin cash was released around 2017, making it a much newer entrant to the crypto market than the original Bitcoin.
Today, Bitcoin cash is popular with crypto investors, and its Blockchain size has grown to a maximum size of 32MB.
While Bitcoin is traded under the initial BTC, Bitcoin cash is also known as BCH. When you enter the crypto trading market, you should learn the distinction between the two coins and ensure that you choose the right one for your cryptocurrency portfolio.
How Can I Buy Bitcoin?
There are plenty of different ways that you can buy Bitcoin. One of the most popular ways to buy Bitcoin is to use a cryptocurrency exchange.
Each cryptocurrency exchange offers a platform for traders to buy Bitcoin and other virtual tokens. As Bitcoin is a decentralised currency, each crypto exchange sets its own Bitcoin price.
So, when you're searching for a crypto exchange on which to trade Bitcoin, you need to make sure that you check out the prices and pairing available.
There are many different crypto exchanges out there, some of which allow users to trade in other financial assets and some that specialise in cryptocurrency.
Using these exchanges, it is possible to buy Bitcoin using a debit card or to trade other financial assets or cryptocurrencies for these popular virtual coins.
It is also possible to buy Bitcoin without a crypto exchange or an account using other trading platforms.
Often, buying Bitcoin and other digital tokens is riskier and more complicated when you don't use an exchange, so this approach isn't recommended for beginners.
One of the downsides of using a Bitcoin exchange is that you have to pay fees for the use of their services.
If you check out exchange reviews like the ones that Traders Of Crypto provides, then you'll be able to learn about the different fees each trading platform charges and which ones are the most cost-effective.
As well as fees, you also need to consider other factors when choosing a Bitcoin trading platform, including the jurisdiction it covers, the user interface the system uses, the altcoins it offers and much more.
For an insight into some of the most popular crypto exchanges, most of which offer Bitcoin, check out our cryptocurrency exchange reviews .
Additionally, we offer an insight into where to buy Bitcoin so that you can find out about the various opportunities that you have to buy this popular cryptocurrency.
Can I Buy Bitcoin Without ID?
One of the most significant benefits of using Bitcoin is that it's anonymous and can be used to hide the identity of the person behind any given transaction.
That's because it is possible to buy Bitcoin without providing your personal details or any form of identification.
Some crypto trading platforms require ID and verification, particularly if they are regulated by a governing body and if they allow users to buy and sell other financial assets.
While many popular Bitcoin trading platforms ask for ID, there are others that do not, and there are other ways to buy Bitcoin, including using a Bitcoin ATM.
As such, buying Bitcoin can be a safe, anonymous solution for many people who don't want to be named on a record of their transactions.
Where Do I Keep My Bitcoins?
Bitcoin isn't like real money; you don't have anything physical to prove your ownership of it. So, where do you keep your Bitcoins once you've bought them?
Much like the cash you keep in your pocket, you keep Bitcoin and other cryptocurrencies in a wallet. Instead of a physical wallet that you can touch and carry around, you use a digital Bitcoin wallet to store your digital coins.
Many exchanges have their own wallets or partner with third-party wallet providers, so you can link your Bitcoin wallet to the exchange you use.
The Bitcoin wallet you choose is vital to the security of your coins. It's effectively a piece of software that's keeping your virtual money safe, so it needs to have the latest digital security features, as well as an easy to use interface.
Learn more about crypto wallets, passwords and security to help you to choose the best Bitcoin wallet for you.
Can I Get Free Bitcoins?
Every exchange sets its own Bitcoin price, so it can be tough to find a cost-effective way to buy Bitcoin. Thankfully, there are ways that you can get free Bitcoin!
It might sound too good to be true, but free crypto is actually surprisingly common. Many communities, like Traders Of Crypto, host crypto competitions where traders can win digital cash prizes based on their overall portfolio value or the profits they make each month.
There are many other ways to get free Bitcoin, including referring your friends to crypto exchanges, using Bitcoin banks to earn interest or even mining Bitcoin.
Additionally, you can find freelance jobs online, where business owners will pay you for your services in Bitcoin .
Each of these techniques is unique, and some require a lot of effort, skill and time. Others are more simple and require only a little trading skill and pluck, so you can find the perfect way to get free Bitcoin.
Check out this news article about where to find free Bitcoin so that you can search through all of your options and find the best one to suit you.
Is It Easy To Mine Bitcoin?
Mining Bitcoin might sound like an easy way to get this popular cryptocurrency without investing your money in it.
However, mining Bitcoin is not an easy task: it requires a lot of coding skills and specialist technology.
Effectively, Bitcoin miners are auditors who are verifying the legitimacy of transactions made using the token.
They check that coin users aren't trying to spend their digital tokens more than once and thus using them fraudulently.
Once you have verified 1MB of transactions, which is the equivalent of one block of the coin's chain, then you will be rewarded with a set amount of Bitcoin.
As well as verifying the block of code, miners also need to get there first and identify a specific 64-digit hexadecimal number, known as a hash. Achieving this requires both speed and luck.
Otherwise, you could find that you don't receive a reward: there is no guarantee when mining Bitcoin or any cryptocurrency.
If you learn the skills needed to mine Bitcoin, then it can take as little as just 10 minutes to mine one token .
The rewards for successful Bitcoin mining reduce every four years, but they are still valuable, so you could potentially earn a lot from mining Bitcoin.
If you want more straightforward ways to get free Bitcoin, then consider entering into trading competitions like ours. You can check out our crypto trading competition FAQs page to learn more about this incredibly easy and enjoyable way to get free coins.
What Other Virtual Currency Could I Trade In?
Bitcoin might be the most famous name in the crypto world, but that doesn't mean that it's the only cryptocurrency that you can buy and use.
There are thousands of different cryptocurrencies out there for you to choose from, each with different exchange rates and benefits.
Some of these coins can be used exclusively for certain transactions or are endorsed by particular celebrities.
Others are more popular, such as Ethereum, Litecoin, and Tether. All of the cryptocurrencies can help traders to diversify their portfolios and boost their profits.
Most trading platforms that offer Bitcoin also offer a selection of other cryptocurrencies so that you can find the right crypto for your trading strategy.
If you want to start investing in these virtual currencies, then you should check out our coin list and learn more about the different cryptocurrencies available.
How Do I Start Trading In Bitcoin?
If this guide has helped you to see the benefits of investing in Bitcoin, then you might be tempted to jump straight in and invest.
Hold your horses! Before you commit your hard-earned cash to buy Bitcoin, you need to make sure that you check out the market and learn everything you can about trading in Bitcoin.
When you start trading in any financial asset or investment vehicle, you need to do your research to ensure that you get off to the best possible start.
If you don't do your homework, then you might take unnecessary and potentially costly risks. Additionally, you might not get the best Bitcoin price and not make as much profit as you could.
Cryptocurrency communities such as Traders Of Crypto share our collective knowledge so that we can help novice traders to get the most out of the world of crypto trading.
With all these resources at your disposal, as well as our exciting trading competitions, there's no reason why any novice Bitcoin trader shouldn't sign up for an account and join our trading network.