What is Bitcoin:
Bitcoin is a digital currency (also called cryptocurrency) created in 2009. Bitcoins can be used as payment for goods and services with vendors that accept Bitcoin as a payment method.
What is a Digital Wallet:
Bitcoins are stored in a “digital wallet,” which exists either in the cloud or on a user’s computer. The wallet is a virtual bank account that allows users to send or receive Bitcoins, pay for goods or save their money. Unlike bank accounts, Bitcoin wallets are not insured by the Federal Deposit Insurance Corporation.
Hot Wallet versus Cold Wallet:
Bitcoins can be stored in two kinds of digital wallets. A hot wallet has digital currency stored in the cloud on a trusted exchange or provider and can be accessed through a computer browser, desktop, or smartphone app. A cold wallet is an encrypted portable device much like a thumb drive that allows you to download and carry your Bitcoins.
Bitcoin’s Popularity:
Most investors are attracted to Bitcoin because it is digital and this factor is quite appealing to traders and investors. There are no fraud issues because it has no physical appearance and is not controlled by the government or financial institution. Bitcoin is not dependent on the central authority and bank, meaning they do not need intermediaries or no intermediaries are involved. There are no transaction fee charges compared to processing traditional currency. Transferring funds through Bitcoin is a much easier process as it takes a few minutes to complete the transaction. There are big companies that are buying Bitcoin such as Elon Musk (CEO of Tesla).
7 ways to Buy Bitcoin:
- PayPal
- Coin base
- Robinhood
- Interactive brokers
- Bitcoin atm
- Bottom line
- Cash App
Written by Anna Li