Bitcoin has been around for a mere 10 years but it has certainly made an impact on the way we ‘see’ money. Created by an unknown programmer who goes by the alias Satoshi Nakamoto, Bitcoin was released as an open-source software in 2009.
Virtual, valuable and volatile: these three words describe Bitcoin to the ‘T’. Even though it’s highly-sought after now, the virtual currency had zero value when it was first introduced to the market.
It took some time but the cryptocurrency started growing in value from 2011 at a price of just one US dollar. As of December 2019, that price has climbed to almost 7,000 US dollars.
It’s been quite a journey for bitcoin and even with all its highs and lows, it shows no sign of slowing down - the virtual currency is here and here to stay.
Clearly, we all have a vague idea about Bitcoin but what exactly is it and how does it all work? Keep reading.
What is Bitcoin?
As mentioned above, Bitcoin is a virtual currency or a digital currency. Sometimes referred to as a cryptocurrency, this is the first kind of money that’s completely virtual.
It’s still quite controversial and some countries have even banned it, questioning its worth and validity. There’s no physical Bitcoin and the familiar picture is nothing but a gimmick. Bitcoins value lies in the private codes that are printed inside them.
How Does It Work?
To buy, sell or make any transactions with Bitcoin, you need to first have a digital wallet app installed on your computer or on your smartphone. You can send Bitcoin or parts of Bitcoins only through this digital wallet.
The transactions are not completely traceless as every one of them is recorded in the blockchain. The blockchain is a public list and they’re essential for tracking counterfeit or stolen Bitcoin. They can also undo transactions if necessary.
How to Get Bitcoin
There are a few ways one can get their hands on Bitcoin. The simplest way is to buy it with typical money or sell things and get paid in Bitcoin. But you can also generate or create Bitcoin.
How are new Bitcoins generated? The process of creating a new Bitcoin is called mining. Mining is basically solving difficult sums to get rewards.
It’s become common now to set up powerful, sophisticated computers just to work out these incredibly difficult sums and get rewarded with Bitcoin. But to regulate the market, the sums are becoming increasingly difficult. So, it could be years before a single Bitcoin is generated from one of these puzzling sums.
Another way to own and make a profit by Bitcoin is by investing and trading. Just like the ‘real money’ stock market, cryptocurrencies have their own trading space. You can buy and sell digital assets by tracking the cryptocurrency market yourself or getting a crypto trading bot.
What is a Crypto Trading Bot?
These are computer programs that automatically buy and sell cryptocurrencies at the right time. They make decisions by monitoring the market and it reacts according to a predefined algorithm. They can also be programmed to suit particular preferences.
But, it’s not a magical genie, most bots aren’t even profitable.
Ideally, a bot should generate a profit every time if the algorithm is set, right? It’s obviously way more complicated than that. There’s no perfect algorithm for the perfect setup.
The volatility of the cryptocurrency makes it harder to foresee returns on investments and it also involves higher risks. When investing in cryptocurrencies, the keyword you need to keep in mind is ‘consistency’. Consistent returns or gains means less risk. High returns are not just enough, high risk-adjusted returns are what you want.
But it’s quite tough to keep your eyes on the market all the time unless you’re a seasoned trader. The market never sleeps and that’s where crypto trading bots come in handy. If you want to invest in Bitcoin through trading bots, check out Bitcoin auto trading reviews to get a better idea of the options available to you check out the Bitcoin Pro website.
Why Choose a Trading Bot Over a Human?
Well, the obvious reason is that just like the market, the trading bot never sleeps. It can operate 24/7, unlike humans. Another advantage is that it doesn’t need time to think or react as humans do. It makes much faster decisions than any human can.
Humans are driven by emotions - greed, fear, and excitement. These emotions can become a vice when it comes to trading. Emotions can drive us and cause us to ignore signs that a robot wouldn’t. Robots are consistent, monotonous and, frankly, the complete opposite of humans.
But, a robot is only as good as the person who created it. They cannot outperform humans in subjective thinking. It’s useless in second-degree thinking and in scenarios that don’t have a specific outcome.
How to Choose the Best Trading Bot for You?
Before you buy yourself an auto-trading bot to generate Bitcoin, there are a few things you need to consider. Research the firm and try to gather information about their senior leaders, their professional experience and if they have a good track record. Another thing to consider is whether they’ve managed to generate more than $100 million for their clients.
Another crucial aspect is to know about the algorithm or the software the bot is using. Is it openly available and widely known? If so, then it can easily be copied. You need to look for one with an ‘edge’.
Don’t forget to look at the fine print and the clauses. It’s important that the firm works for you and not the other way round. Make sure you know what happens after you make the investment. Are they going to cut their losses if you don’t make a profit? Are they going to provide information afterwards or are you on your own? You need to know exactly who you’re getting in bed with and make sure all the scenarios work for and not against you.
Where Do You Go from Here?
Bitcoins are hard to counterfeit or copy as every transaction is recorded publicly. Some would say it’s more secure than actual money nowadays. You can spend bitcoin anonymously and many find comfort in the fact that it’s not controlled by any government or bank. You are in total control.
For many, the future of currency is already happening and it’s only a matter of time before virtual currency takes over. Even if the price is sky-high and there’s still so much we don’t know about cryptocurrencies, more and more people are getting ready to invest in it. Some would say they’re getting ready for the future. So, the question is if the future is already here, where do you go from here?