Bitcoin was created in 2009 by an anonymous person or group, under the name Satoshi Nakamoto, whose goal at the time was to create a completely decentralized electronic cash system.
Bitcoin is the first and most famous digital currency in the world, and it is not subject to any central authority or government institution, and it can be dealt with without the need for a third intermediary, unlike traditional cash currencies, whose users are forced to resort to banks to carry out their basic transactions, Like sending money to people or receiving it.
How does digital currency bitcoin work?
Unlike traditional fiat money, Bitcoin is not printed, instead, it is mined via computers.
Bitcoin mining requires a lot of high-powered computers, and it also takes a lot of effort, so miners are rewarded with 12.5 bitcoins for every new bitcoin they create.
Also, about 1,800 bitcoins are mined every day, by miners all over the world, and the most that can ever exist in the world is 21 million bitcoins, and this was predetermined when this digital currency was created by Satoshi Nakamoto.
In addition to creating bitcoins, mining verifies transactions made by users of this digital currency, in return for paying miners a very small fee for each successful verification of these transactions before they are included in the Blockchain, which is a series of blocks of data that cannot be Never change them once they are registered. Also, anyone can download and check this ledger of transactions at any time.
How can I start trading bitcoin?
The first thing to have for bitcoin trading, is a stable and secure internet connection.
The second step, is to create a special account in one of the cryptocurrency exchanges, which will give you the ability to buy and sell bitcoin.
It should be taken into account that there are two types of these exchanges:
Fiat to Crypto:
This means that you can buy and sell bitcoin or any digital currency, using traditional fiat currencies like the US dollar or any other currency. This type of exchange is generally very beginner-friendly.
Crypto:
This type of exchange is only intended for trading cryptocurrencies with its counterpart, and is intended only for the most experienced traders in general.
To start trading bitcoin, you will need to open a personal account with one of the cryptocurrency exchanges such as Coinbase, Binance or Bitstamp, and transfer your money to these platforms to start buying and trading bitcoins.
Bitcoin trading tips
In the following lines, we will mention Bitcoin trading tips for beginners:
Safety Standards
Bitcoin exchanges are exposed to many hacking attempts from hackers, while some of them fall victim to this, so you should check whether the exchange you are considering using is among those that have been hacked, and you should also research the privacy policies and the way they encrypt the data of customers , and whether they use the dual credibility system.
Transaction fees
You should check if the exchange you are considering using charges fees for its transactions, such as deposit and withdrawal transactions. Remember that there are a lot of platforms that offer these services for free.
Ease of use
Ensure that you can easily navigate the digital platform of the exchange.
Reviews
Make sure to research cryptocurrency forums, to see if others have had a positive experience using this platform.
Once you start buying bitcoins, you will also need a bitcoin digital wallet to store them.
Risks to consider when trading Bitcoin
Bitcoin has become very successful in the past few years, so we are seeing a lot of people rushing to take advantage of the opportunities it offers.
However, the cryptocurrency market is still a new market, and it is still very risky. Therefore, you must have a clear knowledge of the risks that you may face, before you start investing in this field of digital currencies.
Some popular ways to trade bitcoin
There are a lot of different ways to trade cryptocurrency, we will look at some of the most common methods.
It is also important to note that there is a big difference between investing in bitcoin and trading it.
As investors buy this currency and hold it for a long period of time, believing that its value will eventually rise.
Day Trading
This type of trading, allows traders to open several positions during the day to take advantage of short-term price movements.
This type of trader may hold their assets for a few minutes or a few hours, but the idea is always to sell them at the end of the day for quick and small profits.
Trading by Scalping Method
This type of trading is very similar to day trading, but what distinguishes it is that it takes the principle of day trading to the extreme. By buying and selling bitcoins so quickly, that they hold their assets for only a few minutes or seconds before selling them again.
Swing trading strategy
This type of trading involves holding an open position for longer than one day.
This type of trader looks at the bigger picture
of the market, as they study market trends and try to predict price movement,
and once they open a deal, they may hold that deal for days, weeks or a few
months, while watching market movements before selling at the best times to try
to take advantage of Bigger profits.