Bitcoin is a type of currency similar to any of the other forms of albeit digital. This means it can be invested, spent, saved and stolen. The introduction of the Bitcoin, which is to date the most circulated cryptocurrency started in 2009 by a person or a group disguised under the alias Satoshi Nakamoto. Bitcoin cryptocurrency trading became even more important just recently when the value jumped from $2 to $266 between the months of February and April and a market valuation of over $2 billion.
Bitcoin, as one of the cryptocurrencies is generated using a process known as “mining”. This essentially involves the use of a computer’s processing power that solves complex algorithms known as “blocks.” Users can earn approximately 50 Bitcoins once a single block is decrypted. Dependent on the power of the CPU, solving just one block could take up to a year or even more. One of the other ways to obtain this currency is to purchase it. This involves exchanging a physical currency for a digital currency at one of the Bitcoin exchanges like Bitstamp or Mt. Gox.
How To Become Involved In Bitcoin Cryptocurrency Trading
There are currently several ways of becoming a player in the bitcoin markets each with their own weaknesses and strengths. These include:
1. Mining It
The slowest, yet easiest way to enter Bitcoin will be mining it. This involves the set-up of a computer that is dedicated to nothing else but to decrypt Bitcoin blocks. All that is required is to install Bitcoin-mining software and the computer does the rest. For the mid-range desktops, it often takes more than a year to decrypt one block.
For those looking for a faster way to generate bitcoins, the costs are a lot more significant to set up the purpose-built mining-rigs that start from around $2,400 for a 128 GHs Bitcoin Miner. Today, mining Bitcoin has reached a stage that it is virtually impossible for individual users to recoup their investments.
2. Joining Mining Pools
Mining pools are Internet-connected Computer Clusters that divide the work of blocks into pieces shared throughout a group. As soon as the blocks ae decrypted, the Bitcoin that results are then distributed out according to the amount of work the user’s rig contributed.
The security levels among these pools also varies significantly, from requiring a simple BTC username onto the requirements of 2-Step Google Authenticator codes before they pay out. Fortunately, the anonymous nature associated with Bitcoin, means that the users won’t need to include any stealable and personable information. However, complete strangers and money can still pose situations that are combustible.
3. Playing The Markets
The riskiest, yet fastest method is to go directly into the markets. For example, for Mt. Gox which is the most reputable, oldest and largest Bitcoin exchange, the users are required to first create their own user name and to sign up. They are then required to respond to a confirmation through email to verify the users address.