Bitcoin is the new big then in the trading world. It burst out of the gates in 2017 and changed the financial landscape as we know it.
Just what is Bitcoin, though?
Bitcoin is a cryptocurrency. A cryptocurrency is a currency that is entirely digital. There is no physical representation of the value that it holds.
There is no $5 or dime equivalent. Everything is on a computer screen.
You can still use Bitcoin to buy things from certain retailers, and you can trade it like you would on the Forex.
The most significant thing about Bitcoin being digital isn't actually the currency itself. It's the way in which it is made.
Bitcoin is created through a process called minting. It isn't printed like the other major currencies of the world.
When an individual unit of Bitcoin is mined, it's given as payment to people known as Bitcoin miners. Bitcoin miners are entrepreneurs that buy computing hardware to assist with the Bitcoin network.
They install systems onto these computers that allow the network to harvest that processing power and also do manual checks on various Bitcoin transactions.
In return for this service, they are given new Bitcoins, which are then naturally circulated into the wider economy.
Why is this so important for Bitcoin, though?
The Importance of Decentralization
It's important because it means that Bitcoin is decentralized. Here at Bitcoin Champion, we firmly believe that this decentralization of currency is the way of the future and is going to be a massive boon for society.
What decentralization and centralization mean have to do with centers of power.
When a currency is centralized, it means it has a power center. In the case of the dollar, this is the Bureau of Engraving and Printing.
This group of central power is solely responsible for the creation of that currency. This includes when to make more and how much to make.
This is a lot of power and responsibility put into the hands of a few select people, and that doesn't sit well with a lot of the general public, us included.
Bitcoin offers a solution to that power problem in how it's made. The network periodically produces new Bitcoin. There is no human interference. Everything is automatic.
Sure, miners get access to the new coin, but they don't decide when they get it or how much of it.
Bitcoin and Stability
You might remember way back in the days of 2017 that Bitcoin stability was a big issue. People weren't sure about how the currency was acting and feared that it was in a bubble. They were right, and eventually, the bubble popped.
When this happened, it scared a lot of people away. So much so that the general public developed an image of Bitcoin as one that is unstable and unpredictable.
The coin has held onto this perception over the years, even though it has proven to be false.
Since that initial bubble, Bitcoin has remained remarkably stable. It has followed a predictable upwards trend in value and following the rest of the economy when situations dictate.
Take the 2020 pandemic, for example. Like everything else, Bitcoin crashed when things started getting bad.
However, unlike everything else, Bitcoin couldn't go bankrupt. It was considered safer than a lot of stocks, so investors started moving money into it.
The result was that Bitcoin recovered its value remarkably fast.
At Bitcoin Champion, we get asked all kinds of questions about Bitcoin on a regular basis. A lot of these questions tend to be asking the same thing in different ways, so we've put together a short FAQ for you to have a look at down below.
How Much Does Bitcoin Champion Cost?
People are always asking how much our app costs to use. They're used to being charged for other Bitcoin services and assume we're going to do the same.
All of Bitcoin Champion is free for you to use. There are no signup charges and no subscription fees. We don't want to put any barriers between you and trading Bitcoin, and our business practices reflect that.
Why is Bitcoin Considered Digital Gold?
You've probably heard Bitcoin be referred to as digital gold and thought nothing of it. Most people assume it's an expression of the value of Bitcoin being comparable to that of gold, or as a figure of endearment.
In reality, the expression of digital gold actually has some depth to it. It's not just to do with value.
Let's start with what we know about gold. It's a finite resource, it's a commodity, it's definitely decentralized, it only goes up in value, and it can be traded.
Bitcoin shares almost all of those features. In fact, Bitcoin has more in common with gold than it does with other currencies like the dollar and euro.
Bitcoin is finite. The network is hardcoded to stop producing coins once a certain limit is hit. Bitcoin isn't a commodity, but it does act like one. Bitcoin is obviously decentralized, and it also generally goes up in value. Lastly, it can be traded.
All of these similarities are what led to the digital gold nickname.
Should I Trade Bitcoin Like Gold?
Those similarities beg the question, "should I trade Bitcoin like gold or dollars?"
Generally speaking, treating it more like gold is going to be more advantageous for you in the long run.
You shouldn't treat the two identically, but a lot of the fundamental logic applied to gold trading can be applied to Bitcoin, too.
Can I Store My Bitcoin on Bitcoin Champion?
Yes, you can keep any Bitcoin you trade for stored on the Bitcoin Champion platform. However, you should consider withdrawing your balance every so often to a Bitcoin wallet.
A Bitcoin wallet is a third-party program installed on any device that can store data, such as a USB or computer.
It's industry standard for traders to store their Bitcoin on a wallet for day to day to use. It's convenient, portable, and incredibly secure.
When you're considering what wallet to use, there are two different types to choose from: hot wallets and cold wallets.
Hot wallets are the most common type that you're going to come across in your journey. It's defined by constantly being connected to the internet. This makes the wallet extremely convenient.
You can transfer money to and from it with nothing more than a quick button press and a bit of typing, hence why so many people use it.
Cold wallets, on the other hand, are not connected to the internet. Coins need to be manually moved to and from it, which takes a little bit of time and effort.
It's the less common of the two, but it does have its uses. As a result of having no internet connectivity, cold wallets are incredibly secure. There is absolutely no risk of a security breach.
While the security measures on a hot wallet are second to none, it is theoretically possible for them to be breached. When you're dealing with a lot of value, people don't want to take that risk.
Regardless of which type you use, you can always use Bitcoin Champion to store your coins if needs be.
Why Does My Wallet Not have a Password?
Your Bitcoin wallet account might have a password, but your wallet itself does not. Instead, you are generated a unique string of letters and numbers that is known as a key.
This key is how you get into your wallet. It's encrypted, meaning no one, but you know what it is. This includes the provider of the Bitcoin wallet.
Put simply, if you lose the key, then you lose your coin. There's no customer support line for you to call. Thus, make sure you make at least two different hard copies of the key.
More Bitcoin is lost to people forgetting their keys than anything else, so don't let yourself fall into that trap.
Is There Really No One I Can Contact About a Bitcoin Problem?
Yes, really. When it comes to the wider Bitcoin ecosystem, you're on your own.
Remember, Bitcoin is decentralized. It's actually the biggest disadvantage of being decentralized. With the banks controlling so much of the dollar, you can call them up if something goes wrong.
There is no central power in Bitcoin, so there is no one you can call. That's why so many traders take their Bitcoin security so seriously. You don't have any sort of backup options.
How Can I Prevent Bitcoin Security Breaches?
The best antivirus you have is your own common sense. If a deal looks too good to be true, then it probably is.
If you keep your wits about you, then you should never encounter any sort of serious security breach.
Don't trade Bitcoin through independent forums, don't send your Bitcoin to someone first if you're not trading through a platform or a brokerage, and so on.
There is one other thing you should be doing to prevent Bitcoin security breaches, and it's related to trading platforms.
There are a few sites online that allow users to trade Bitcoin between themselves. Unlike our platform, which is an automated trading service, these platforms are all manual peer to peer trades.
This is all well and good, but these sites are notorious for having outdated security. There have actually been a handful of times that this security has come back to bite these platforms.
These few security breaches aren't common by any means, but it has happened. When it does, anyone that had stored their Bitcoin on these platforms woke up to their accounts empty.
To avoid this happening, just keep your money off of these sites. You can trade on them, no problem, just make sure you withdraw the coins once you're done.
How Do I Know if Bitcoin is For Me?
What stops a lot of potential traders from getting involved with Bitcoin is the uncertainty of whether or not it's for them.
It's a unique market that is unlike anything in the traditional trading space. However, this shouldn't be a source of fear. Instead, you should allow the prospects to excite you rather than driving you away.
Amazon was new at one point, as was google, just like almost every single thing that has ever been traded.
The only real way to know if Bitcoin is for you is to dip your toes in the water. When you register with Bitcoin Champion, you can make a minimum deposit and start trading for significantly less than a lot of other traders out there.
Make a few trades and see how you feel about the market. You could also do a bit of reading up on Bitcoin to see if it's something you're interested in.
The market is steeped in both technological consequences and economic consequences. There's likely something you're interested in buried in the mountains of documentation there is on the coin.