Five things every layman should know about Bitcoin

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Bitcoin's explanation

Five things every layman should know about Bitcoin

There will be few Dutch people who have never heard of it: Bitcoin, the popular crypto currency. Almost everyone sometimes experiences that in the office next to the water cooler or during a birthday it suddenly becomes about Bitcoin and the most exotic, technical terms are used. Bitcoin is a perfect example of a technological revolution that has rapidly become embedded in society. Bitcoin has frequently front pages and opened the NOS Journaal. But because the advance was so rapid, there are also hordes of people who still have little control over the entire Bitcoin phenomenon. So today: five things every layman should know about Bitcoin.

1. Why is Bitcoin so popular?

Strictly speaking, Bitcoin is a means of payment, a digital currency. The previous really big revolution in the field of money was the introduction of cashless money: no coins or paper, but virtually in your bank account. Now Bitcoin is unleashing a new revolution in the financial world. The  Bitcoin price is volatile, which has allowed savvy investors to make big profits. In countries with high inflation and where the home currency is under pressure, virtual currencies can offer some security. Digital currencies are completely separate from central banks.

2. What distinguishes Bitcoin from euros and dollars?

The Bitcoin is anonymous and is developed by computer software (mined). It is known in advance that a total of 21 million Bitcoins can be created. There is no central bank that can suddenly print digital coins, causing the value of the currency to fall. This is what the European Central Bank has done for the euro, for example.

A Bitcoin transaction cannot be traced, which is one of the reasons why Bitcoin has become popular as a means of payment, among others in the criminal circuit. Finally, Bitcoin is not traded on traditional exchanges, but through online trading offices.

3. Can anyone just get started with Bitcoin?

In principle yes. The technology behind Bitcoin (the blockchain) is quite complicated, but you don't necessarily have to understand it to get started with Bitcoin. In fact, any layman can still buy and sell Bitcoin today, as long as you have an internet connection and a money transfer option, for example via PayPal, iDEAL or a credit card.

4. What do I need to buy or trade Bitcoin?

Bitcoin, like other cryptocurrencies, can be traded via a crypto wallet. A crypto wallet is a type of digital wallet that only you can access via your computer or smartphone. Cryptocurrencies that you buy end up in your crypto wallet, where you can later take them out to make payments or to buy other cryptocurrencies. You do this buying and selling of cryptocurrencies via a crypto exchange. There are all kinds of different types of wallets and exchanges, so read carefully before you get started.

5. What risks or disadvantages should I pay attention to?

Buying Bitcoin is tempting because there are many success stories of people who got rich quick with it. Realize that those stories are exceptions; Don't buy Bitcoin because you want to get rich, but do it because you find it fun or interesting. Like any investment or investment, there is a risk involved and you can also lose your investment. Also pay attention to which exchange you use. They all have their own characteristics and rules with regard to, for example, commissions that are charged. Finally: forget your passwords and keys not. A key is a code that gives you access to your Bitcoin. Since everything is anonymous and there is no Bitcoin bank, you are on your own. Unfortunately, there are stories of people who have lost a fortune in Bitcoin because they forgot or lost their key. So don't become one of those people.

 

Bloeise editor

The Bloeise editorial staff consists of Thomas Lapperre. These messages are not credited personally because they are written by others: hired copywriters for sponsored content and submitted press releases. The editors cannot take any responsibility for submitted press releases - text and images are[…]
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