A personal blog about finance, trading, and cryptocurrency.

ETHAN WILK

ONE BITCOIN =

 

$X,XXX

OCT. 10, 2019

Bitcoin 101: What is it and why is it important?

Hi, all.

 

Welcome to my first post on this blog.

 

I'm going to be discussing the fundamentals that fuel Bitcoin and similar cryptocurrencies as well as how you can profit off these internet coins right now.

 

To start, Bitcoin was created just a year after the 2008 stock market crash as a mechanism to prevent such a disaster from happening again; an alternative to fiat currency. Decentralized, anonymous, and deflationary, it became a hit among computer nerds and finance buffs but didn't really take off for the general public until it reached $1,000 in 2013 and $19,000 in 2017.

 

Surprisingly, despite the strange currency's commercial success, no one knows who the original programmer behind Bitcoin was, as he or she never claimed the title to fame. The community therefore refers to the unknown character simply as 'Satoshi Nakamoto'. If you hear the name Craig Wright, think: Not Satoshi.

 

Nowadays, a great number of people have left the industry, believing it to have 'died' after falling back to $3,000 from its $19,000 bull run. However, the fact of the matter is it's just getting started, regardless of what you hear on the television or read in the newspaper.

 

Now, knowing some history, let's dive into the technical fuel of cryptocurrency. Bitcoin and similar altcoins run  on the basis of a protocol known as 'blockchain'. In its simplest form, blockchain is just a system that facilitates transactions between anonymous parties. The beauty of this simple algorithm is that anyone can securely and anonymously transfer anything to anyone else, eliminating need for the middle-man (in the modern world, that'd be the bank. Or PayPal). In essence, it's decentralized -- you are your own bank. I won't dive into the raw code for blockchain just yet, but I'll be sure to soon.

 

Now, how can you make money off this strange, new currency? Bitcoin trading became a popular topic amidst the 2017 bull run, in which Bitcoin rose over 1000% in a matter of months, allowing some to become very rich. The basic premise of cryptocurrency trading is not much different than that of stock trading: the same rules apply but personally I've found cryptocurrency trading more alluring because it's unregulated and universal. This allows users to place trades freely and openly, and implement programs with little to no restrictions from the exchange. So, to answer the question simply, you can make money with Bitcoin the same way you do with stocks. Except, with cryptocurrency, it's just more.

 

This blog will discuss a lot of trade strategies, and post a lot of trade algorithms. My goal in writing these articles will be to help facilitate the growth of the trading community as a whole, ideally by helping all who read the blog to learn more about the industry and how to make big bucks from it, one step at a time.