Bitcoin king of Crytocurrency

Bitcoin king of Cryptocurrency :How the money from the Internet works

Bitcoin king of Cryptocurrency: Bitcoins are the new hype. Investors expect high profits from digital money. Is it really worth investing in Bitcoin? Is it serious at all? How does internet money work? Where can you get it? The financial experts of the Stiftung Warentest classify the topic.

A fortune on the hard drive

The ultimate tip? Or bottomless crash? Memories of the Neuer Markt are awakening: The digital currency Bitcoin, known to insiders a year ago, is a party theme. Many want to be there, everyone wants to get rich. Almost everyone knows stories like that of bitcoin-paid pizza, which would be worth a fortune in today’s prices. Or the Englishman, who suspects his Bitcoin-filled hard drive at the local dump and wants to dig for it there. And even though the price has risen madly, some of the followers believe that this was just the beginning.

First twenty times, then almost halved

The value of Bitcoin peaked at around $ 1,014 in 2017 to around $ 20,000, and Bitcoin has only been around since 2009. In early 2011, the price was $ 1. For comparison: the value of the share of the most expensive company in the world, Apple, has “only” increased four hundred times since the IPO in 1980, including dividends.

Bitcoin king of Crytocurrency
Bitcoin king of Crytocurrency :How the money from the Internet works

Reader’s call: Have you already bought bitcoins?

Have you already bought bitcoins and bought a digital wallet? Or have you registered on a platform? Have you ever paid with bitcoins? Did that work out well or did you encounter difficulties? Do you have any questions about the topic? We would be happy if you would share your experience with Bitcoin or other crypto currencies. Of course, we treat your submissions confidentially. 

The digital coin

The name Bitcoin is made up of the word for the smallest digital unit, the bit, and the English word coin for coin. A certain Satoshi Nakamoto is responsible as the inventor – although it is still not clear which head is behind it, perhaps it is a whole group.

Gold rush (Bitcoin king of Cryptocurrency)

Bitcoin rally. 1 Bitcoin was briefly worth around $ 20,000 in December 2017.

Bitcoins, or BTC for short, do not have any coins or notes, they only exist virtually as a digital string. Even if they like to be compared to gold: there is no real value behind them. New bitcoins are created by the users themselves using mathematical methods. The balances and payments are managed in a decentralized network, the block-chain. In order to book a transfer with Bitcoins, a complicated calculation task has to be solved. The first to do this will get bitcoins as a reward. One speaks of mining, in German the mining of Bitcoin – at this point the comparison with gold fits.

Bitcoin as a climate killer

In the beginning of the virtual currency, mining was done with a PC at home, but today powerful machines are needed to deal with the increasingly complex calculations. In an interview with the Handelsblatt, the Bundesbank points out calculations according to which a single Bitcoin transaction corresponds to the monthly electricity consumption of a single-family household in Germany. Environmentally friendly is different.

Financial industry gets involved

That Bitcoin has risen so much is not only due to the gold-digging mood among investors, but also because of the interest of the financial industry. Hedge funds invest, two US futures exchanges have introduced Internet currency futures that allow speculators to bet on rising and falling prices. It is probably only a matter of time before the first ETF on Bitcoin comes on the market.

Certificates and funds (Bitcoin king of Cryptocurrency)

Why are bitcoins considered power guzzlers? Should you still get in now? Our detailed podcast provides answers to these and many other questions.

For example, there are certificates. One of the securities that investors can use to speculate on Bitcoin growth is sold by Swiss bank Vontobel, the other by the Swedish issuer XBT provider. Funds are also taking advantage of the crypto hype. The mixed fund Acatis Datini Valueflex, for example, bet on Bitcoin in a big way – and thus ultimately achieved a better return than equity funds world.

Thousands of imitators

Bitcoin’s price growth attracts imitators. There are now said to be more than 1,000 cryptocurrencies. Bitcoin is the market leader with a market capitalization – the number of coins multiplied by the current value – of around $ 250 billion. Ripple is in second place with $ 140 billion, followed by Ethereum with the Ether computing unit with just under $ 95 billion. Only three dozen digital currencies have a market capitalization of a billion dollars, and many others don’t even have a million.

Our advice (Bitcoin king of Cryptocurrency)

Crypto currencies. Real, decentralized cryptocurrencies that are mined and traded using blockchain technology are not per se dubious. Speculation on Bitcoin and Co is like going to the casino. Only use money that you don’t need. You can lose everything.

Initial coin offering. Buying tokens and other “vouchers” that companies raise capital to sell is far too fraudulent and risky. Better not to. More on this in our special cryptocurrencies: Coins and tokens – speculation or fraud?  

The dark side of bitcoin

In the past, Bitcoin was primarily used as a currency for dealers who used it to carry out arms and drug deals on the Darknet. Literally translated, the Darknet is the dark side of the Internet in which users can surf largely anonymously. Bitcoin recently hit the headlines in connection with ransom demands.

The end is at 21 million (Bitcoin king of Cryptocurrency)

“I am grateful to be part of the revolution”. Ex-US boxer Mike Tyson in 2015 at the launch of a “Mike Tyson” Bitcoin change machine in Las Vegas.

Bitcoin was created as a decentralized currency with no third party control. So far, according to the website Coinmarketcap, there are almost 16.8 million bitcoins, with 21 million should be over. However, the growth continues to slow down. You can also trade fractions of bitcoins. Purchases of millibit coins are currently popular with beginners.

Currencies work differently

It is doubtful whether it is a currency in the classic sense. Bitcoin is not a legal tender in Germany. Nobody is obliged to accept bitcoins, and only a few do so, like a few shops, cafes or bars in some German cities or the food delivery service Lieferando. Wikimedia, the foundation behind the online lexicon Wikipedia, accepts donations in Bitcoin. Mozilla, the operator of the Firefox internet browser, can also be supported with bitcoins.

A salary for a villa or five rolls

A currency should be suitable for transferring value – which is hardly possible given the sharp fluctuations in Bitcoin prices. Imagine that the salary comes in bitcoins. You could pay the rent in one month, buy a villa the next month – and possibly only five rolls the next day. Nobody, neither a private investor nor a retailer, would get involved in this game if it were about its existence. Then prefer euros. However, Bitcoin can have a protective function in countries with high inflation or capital controls. It can be worth exchanging the national currency here.

Bundesbank and Bafin warn investors of losses

The Bundesbank and financial regulator Bafin warn against considering bitcoins as a store of value – the third function that a currency performs. Investors could lose all of the money invested.

The one, the one, the Bitcoin?

According to Duden , both the male and the female form are possible. test.de has chosen the more common male form. With regard to the question of single or multiple, we stick to the concise definition of Heise Online : “The plural bitcoins represent the monetary unit of the digital currency, while the single bitcoin describes the entire decentralized monetary system. The special thing about Bitcoin is that the entire system “only” consists of the network of users of the currency, i.e. senders and receivers of money, as well as the recording of all transactions, the so-called blockchain. “

Beware of crashes and theft

The crash before Christmas gave a foretaste of the risks when the price of 1 Bitcoin dropped from $ 20,000 to around $ 11,000 within a few days. One of the reasons for the setback was the closure of a Bitcoin exchange in South Korea. Again and again, digital money comes under pressure because hackers have cleared a platform. Even those who store bitcoins on their private computers should protect themselves against theft.

Buy bitcoin (Bitcoin king of Cryptocurrency)

If you are looking for the thrill and want to become a Bitcoin owner, you can get a digital wallet called a wallet. There are instructions on the web about what types of wallets are available and where to get them from. The wallet has a public account number and a private key that you can use to lock it. It is a bit easier to get to Bitcoins, for example, on the Bitcoin.de platform . Registering there is just as easy as opening a call money account. The bitcoins are then stored on the platform, you don’t save them yourself on your cell phone or computer.

Keep an eye on costs (Bitcoin king of Cryptocurrency)

Bitcoiners should pay attention to a fair price and – importantly – the costs. Shortly before Christmas, a transaction sometimes cost more than $ 30, according to the www.Bitcoinfees.info website . It’s not worth it for a pizza or a beer.

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