A step by step guide to buying Bitcoin in the USA
Nearly a quarter of all global Bitcoin trading takes place in the United States. With this in mind, you should already have an idea of how widely cryptocurrency, and particularly Bitcoin, is used in the US.
There are currently no federal laws governing cryptocurrencies, and each state must decide how to handle digital currency on its own, though many have yet to do so. Cryptos are categorized in the United States as digital currency by the Securities and Exchange Commission (SEC), commodities by the Commodity Futures Trading Commission (CFTC), and property by the Internal Revenue Service (IRS).
Satoshi Nakamoto developed Bitcoin as the first decentralized digital asset in an attempt to eliminate third-party influence from institutions and banks that are present with traditional fiat currencies. The Bitcoin software was launched in 2009, in the aftermath of the global financial crisis, and is widely regarded as revolutionary. Blockchain technology is sweeping the tech and finance industries by storm.
The development of Bitcoin ever since has enabled users from across the world, and especially in the United States, to easily acquire and trade Bitcoin from the comfort of their own homes. This guide will outline the four easy steps of how to buy Bitcoin and why it is a worthwhile investment for Americans interested in buying BTC.
What Are The Steps to Buy Bitcoin in the USA?
Buying crypto in the US has never been easier. Here are four easy steps to buy Bitcoin online:
1. Find an online crypto brokerage that lists Bitcoin
There are so many exchange platforms and brokerages available online to choose from, where you will set up an account and deposit your money to buy BTC. It’s important to find an exchange that is trustworthy and reliable. eToro is one of the world’s best online crypto brokerages with a user-friendly interface and staff available 24/7 for new investors looking to buy BTC. To sign up for eToro, visit their homepage and follow the next steps.
2. Register and verify your account
To sign up on eToro, simply go to their homepage and click on “Join Now.” Once you get to this page, you’ll need to provide your basic information such as your full name and email. Here you will also pick your username and password. Once you pass this step, you’ll be asked, as part of their security protocol, to provide a POA (proof of address) and POI (proof of identity).
3. Choose a payment method to deposit your funds
Once you are registered and verified on eToro, the next step is to place your funds into your account. There are 10 different payment methods that are available for you to use, making it accessible to everyone. Some of the most common payment methods used in the US are credit/debit cards, PayPal, and Neteller.
4. Buy Bitcoin
Now is the most exciting step. In order to purchase BTC after transferring your funds into your account, go to the navigation bar and click on “Crypto” below the “Markets” option. You will then search for BTC or Bitcoin in the dropdown menu. Once you click on Bitcoin, you can adjust the settings of your trade and once you’re satisfied, click “Buy.”
Why Should You Invest in Bitcoin in the USA?
As the number one leading cryptocurrency, there is no doubt that there is a bright future set out for Bitcoin. Many price predictions from trusted sources forecast Bitcoin to reach $75,000 by the end of 2021 all the way up to $320,000 by 2025.
The idea is that if you are planning to invest in Bitcoin, the earlier you do, the better. Yahoo Finance notes that if you were to invest $100 in BTC in 2010, when the price of the coin was only at $0.06, that investment would now be worth $72,902,650. The price has since had minor fluctuations, but nonetheless grown to a value of over $50,000 USD per coin at the time of writing. The point is, it’s better to invest before it’s too late. Who knows what your $100 today will be worth in a couple of years’ time.
Is Bitcoin a Good Investment in the USA?
According to Bloomberg, Bitcoin is becoming more widely accepted as a form of investment in the US. Financial elites like Paul Tudor Jones and Stanely Druckenmiller are lining up to give their support. There are also large investments being made by big names such as Tesla Inc., who recently invested $1.5 billion in Bitcoin. Square Inc. invested $170 million more, and other firms are all following.
After seeing its Northern neighbor Canada launch the first North American Bitcoin exchange-traded fund (ETF) back in February, many are hopeful that the SEC will also implement the United States’ first nationwide Bitcoin ETF too. A Bitcoin ETF would track the price of Bitcoin and trade on traditional market exchanges, like a stock exchange, instead of crypto exchanges. It would be among the top 20 most popular ETFs in the US in terms of trading volume according to Bloomberg. Hopes are high with President Joe Biden’s nomination of Gary Genslet, a crypto enthusiast, to fill the position of SEC chairman this upcoming summer.
During Bitcoin’s 2021 rally, demand for Bitcoin-based investments skyrocketed. The Grayscale Bitcoin Trust (GSTC), which tracks Bitcoin, has increased by 272% in the last year according to Business Insider. It’s similar to an ETF, but instead, it is backed by Bitcoin. When taking into consideration the rapid worldwide adoption of Bitcoin as an investment and means of payment, especially in the United States, it may be a sign that now is the time to invest.
- Nearly a quarter of all global BTC trading takes place in the United States.
- BTC is categorized as a digital currency by the SEC.
- Buying Bitcoin through an exchange is as easy as four simple steps.
- Forecasts predict Bitcoin to reach $75,000 by the end of 2021.
- if you were to invest $100 in BTC in 2010, when the price of the coin was only at $0.06, that investment would now be worth $72,902,650.
- SEC may implement the first nationwide Bitcoin ETF.
- It would be among the top 20 most popular ETFs in the US in terms of trading volume according to Bloomberg.
- Grayscale Bitcoin Trust (GSTC) has increased by 272% in the last year.
What Are Cryptocurrency Forks and How do they Work?
Crypto forks explained
Cryptocurrency forks are protocol changes in a blockchain. Cryptocurrency may or may not be backward compatible.
Therefore, there are two main types of cryptocurrency forks: hard forks and soft forks.
Since most cryptocurrencies are open-source (meaning that anyone can access or modify), anyone can apply their own protocol changes. However, for a cryptocurrency to fork, the majority of other nodes need to agree with these changes.
Just like many other cryptocurrencies, Bitcoin – the world’s first cryptocurrency – has also undergone protocol changes or forks.
So to understand Bitcoin forks, you need to briefly know how cryptocurrency forks occur.
Hard Forks are protocol changes that are not backward compatible, which means that once the blockchain is updated, it cannot go back to a previous update, and the nodes that are not updated are not valid.
Once this change in a blockchain protocol occurs, the nodes need to update the information to the new rules in order to continue valid mining.
However, if a relatively large portion of a cryptocurrency community decides that they do not want to apply the new changed protocols but rather stick with the older version, then the two versions will be divided into two separate cryptocurrencies and continue to operate independently.
Hence, this type of cryptocurrency fork is known as a hard fork.
Soft Forks, on the other hand, are protocol changes that are backward compatible, meaning that even if nodes are not updated based on the new protocols from the cryptocurrency’s developer, they can still do valid mining in that blockchain.
Compared to hard forks, the likelihood of a cryptocurrency splitting after soft forks is very low.
Client Software Forks
The first Bitcoin fork happened in 2011 and formed Litecoin. Litecoin was intended to have a lower block generation time, increase the maximum supply, and so on. However, some do not consider Litecoin as a proper Bitcoin fork, but rather as simply a new cryptocurrency that followed Bitcoin’s blueprints.
The first prominent Bitcoin fork was Bitcoin XT, and its upgrade included an increased block size which doubled every two years. However, it was not very successful.
After Bitcoin XT, Bitcoin forked to Bitcoin Classic, which also included a larger block size, but not as big as Bitcoin XT. It also failed later on.
Next came Bitcoin Unlimited, which was a combination of the two previous forks, but its supply was unlimited.
What are the Bitcoin Hard Forks?
Bitcoin Gold is a Bitcoin hard fork, which focuses on more decentralization. This is because more powerful miners in the Bitcoin blockchain have a bigger chance to mine than smaller ones. Hence, Bitcoin Gold wants to resolve that.
Bitcoin Cash is the most successful Bitcoin fork so far. It emphasizes its preventions on replay attacks, it has a bigger block size, and it promotes more efficient “electronic cash” transactions.
Bitcoin Cash price throughout the years. Source: coinmarketcap
Bitcoin SV is a result of a Bitcoin Cash split, and it is owned by Craig Wright, an Australian computer scientist who claims to be Satoshi Nakamoto.
- Hard forks and soft forks are protocol changes within a cryptocurrency.
- Hard forks are not backward compatible and can result in cryptocurrency splitting.
- Soft forks are backward compatible.
- Bitcoin has forked several times throughout the years.
- Some of the most important Bitcoin forks are Bitcoin Cash, Bitcoin Gold, Bitcoin SV, etc.
Bearish & Bullish Meaning in Cryptocurrency
What do the terms “bearish” and “bullish” mean in the cryptocurrency world?
Simply put, bearish refers to market pessimism and price declines.
Bullish refers to market optimism and price inclines.
Why ‘Bear’ and ‘Bull’?
Actually, the origin of the terms ‘bearish’ and ‘bullish’ are unknown. However, it is believed that these terms originate from the way that bears and bulls attack. Bears usually swing their paws downward when attacking another animal.
Hence, bearish as a term is used for a downsloping curve. Bulls, on the other hand, attack another animal by swinging their horns upwards. Hence, bullish refers to an upsloping curve.
As mentioned, a bearish market is categorized with declining prices of cryptocurrencies and buyer pessimism. When the price of a cryptocurrency reaches its peak (new highs), investors are inclined to sell cryptocurrencies they own to make a profit. Once everyone starts selling their cryptocurrencies, the price gradually starts going down, and most investors will be keen to sell their cryptocurrencies even faster.
Since more cryptocurrencies are sold, supply increases and exceeds demand, which in return causes a surplus. Whenever there is a surplus, the price goes down to reach new market equilibrium.
All this tendency to sell cryptocurrencies because of the fear that the price will go down, which as a result actually decreases the price of that cryptocurrency, is known as a bearish market.
Bearish markets occur after a bull run and are usually a 20% price decline, which is then followed by another bull run.
Buying Cryptocurrencies In a Bearish Market
If you invest while on the bearish run, you do not need to panic. Even though the likelihood is that the price of the cryptocurrencies you purchase may go down, the possibility that it will go up again also exists. So even if you purchase at the wrong time, perhaps you can profit in the long run.
After Bitcoin’s bull run in 2017 where the price went close to $20,000, its price drastically decreased. However, as of April 2021, Bitcoin’s price is around $60,000, which is almost three times the value of its price by the end of 2017. So even if you had invested when the price was at its highest in 2017, which was then followed by a bearish market, you would have made a profit in the long run.
As the opposite of a bearish market, a bullish market is categorized with inclining prices of cryptocurrencies and buyer optimism.
When after a bearish run, the price of a cryptocurrency reaches new lows, investors are encouraged to buy cryptocurrencies because of the new potential to increase in price. When everyone starts buying cryptocurrencies after a bearish run, the price starts going up, and more investors will seek to buy those cryptocurrencies because of the fear of missing out on potential profits.
When more of these cryptocurrencies are purchased, supply decreases and demand exceeds supply, which causes a shortage. Whenever there is a shortage, the price goes up to reach the new equilibrium.
This run of purchasing cryptocurrencies because of the fear of missing out (FOMO) on potential price increases, which as a consequence increases the price of those cryptocurrencies, is known as a bullish market.
Bullish markets occur after a bearish run and are usually around a 20% price increase, followed by a bearish run again.
- Bearish refers to market pessimism and price declines.
- Bullish refers to market optimism and price inclines.
- Bearish markets occur after a bull run and are usually a 20% price decline, which is then followed by another bull run.
- Bullish markets occur after a bull run and are usually around a 20% price increase, followed by a bearish run again.
DApp Meaning – What are DApps in Cryptocurrency?
A guide on decentralized applications
DApp stands for decentralized application. They are digital applications that offer decentralized services, where no third party is required.
DApps were successfully implemented in cryptocurrencies with the Ethereum blockchain.
There are a lot of different DApps. Some are used for decentralized financial services (DeFi), some are used for gaming, exchanging, voting, compiling data, voting, etc.
The integration of DApps in cryptocurrencies has revolutionized the world of cryptocurrencies.
DApps On The Ethereum Network
So how were decentralized applications initially integrated into cryptocurrencies?
Bitcoin as the first successful cryptocurrency only offers decentralized transactions. But if transactions could become decentralized, so could many other digital services.
The idea for this kind of decentralization could have come even before Bitcoin, but it was Russian programmer Vitalik Buterin the one who made the idea possible. Together with Gavin Wood, Vitalik Buterin launched the Ethereum Network in 2015. Thus, Ethereum became the first cryptocurrency that offered various decentralized services on its blockchain through DApps.
These DApps interact with smart contracts in order to operate without a central authority. These smart contracts are sets of codes that determine how each service is going to run.
Decentralized applications have changed the world of cryptocurrencies for the better. With the creation of Ethereum, many other cryptocurrencies emerged with similar blockchains that allowed people to launch and run DApps.
According to Coindesk, as of 2021, there are around 3000 DApps running on the Ethereum network.
All these DApps differ in features and functions. Let’s look at some of these different types of DApps.
What are the Types Of Decentralized Applications?
There are a lot of decentralized applications that offer games that reward the user with various tokens while playing. For instance, Alien Worlds, Upland, Axie Infinity, etc.
One of the biggest use of DApps is running decentralized financial services without the need for banks. Some examples are Pancake Swap, Value DeFi, Venus, etc.
Another type of decentralized application is gambling DApps. These DApps offer casino and gambling services with much lower earning cuts. For example, Serious Dice, BLINK, Earnbet, etc.
Exchange DApps offer decentralized exchanges without additional fees (only gas fees). Some examples are UniSwap, SushiSwap, TTSwap, etc.
These DApps allow users to collect moments, pictures, videos, that can be later traded in exchange for tokens. A relevant example would be NBA TopShot, which allows users to collect basketball highlights and then trade them with each other
These DApps offer services just like any other social media but are decentralized. Some examples are Steemit, Yup, Hive Blog, etc.
- DApps are digitalized applications that offer decentralized services.
- Some are used for decentralized financial services (DeFi), some are used for gaming, exchanging, voting, compiling data, voting, etc.
- Ethereum became the first cryptocurrency that offered various decentralized services on its blockchain through DApps.
- There are around 3000 DApps running on the Ethereum network today.
- Some trending decentralized applications are NBA Topshot, Alien Worlds, PancakeSwap, UniSwap, AtmoicAssets, Upland, AtomicMarket, etc.
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