If you are already investing in Bitcoin or are interested in checking it out, you will come across terms such as cryptocurrencies and blockchain technology. You will find the potential for the deployment of blockchain quite intriguing.
The Basics of Blockchain
Blockchain is an innovative ledger technology that comes with myriads of potential industries as well as fields of application such as:
- Real estate investments
- Smart contracts
- Personal data protection
This is because blockchain, simply put, is a decentralized digital ledger that cannot be changed. To learn more about crypto and the blockchain https://trybe.one/ is very informative.
What is a Ledger?
A ledger is a database technology whose purpose is the recording of transaction histories and ownership. In other words, it gives details of who has handed over what to whom as well as who has right of ownership to what.
Most ledger technologies are centralized (a central bank controls them). They are therefore changeable, impermanent and are controlled by individuals.
The blockchain contains several blocks. In each block, data on transaction history is recorded and the codes for the blocks can only be broken by the miners. Miners are a network of individuals mandated with the responsibility of breaking the codes for each block of data that is added to the blockchain.
Investing in Bitcoin
If you are a beginner, this step-by-step guide should be useful to you.
Trading on Platforms
There are several platforms that one can trade on including Coinbase, Bitfinex, BTC-e, ItBit and OKCoin. A platform is the best choice for those who are just getting to learn about the blockchain and cryptocurrencies. A platform is helpful because it connects you to a network of traders also trading in cryptocurrency. It may be a little confusing for a beginner to mine Bitcoin directly due to lack of means or the technology needed to do so.
In addition, communicating and trading directly with miners and storing your digital currencies and assets may not be easy. Trading platforms take care of these issues.
A trading platform that is a GDAX (a global digital asset exchange company) avails a marketplace for digital currencies. It also sends information about the transactions happening in the marketplace to the appropriate blockchain network. The blockchain network then records those transactions in the blockchain.
Your platform also serves as a digital wallet. This is where a trader stores their digital currencies purchased on the platform. The currencies available include:
- Bitcoin Cash
If you want to trade in digital currencies without hustles of getting into the nitty-gritties, trading platforms are the way to go.
Trading on Platforms
To buy and sell Bitcoin on any platform, you need a link to a bank account or a debit card to your platform account. Many platforms accept wire transfers but you will need to understand the conditions. Additionally, learn the pros and cons of using a bank account or a debit card.
Transactions via bank accounts take a while to be completed. Also, using a bank account supports buying and selling f crypto. You are also allowed to deposit and withdraw money from your platform account. If you are dealing with large investments and purchases, the bank account is recommended.
Debit cards support the purchasing of cryptocurrencies available on your platform. You can transfer funds from your card to the platform and buy your crypto instantly.