Following its monumental rise and subsequent fall in 2017, bitcoin – all cryptocurrencies in general – are once again a hot topic. For those interested in investing, it is important to understand the basics of how this digital currency works and how to go about purchasing it.
While there are countless online articles and videos that aim to inform and advise users about bitcoin, for many the best way to learn about something is still through a good old-fashioned book. “Cryptocurrency Investing For Dummies” is available in paperback, as an audiobook or Kindle download. It provides detailed information on bitcoin and other cryptocurrencies and insights into various trading platforms and strategies.
Bitcoin was created by developer Satoshi Nakamoto in 2008. It is an alternative payment system that exists outside of traditional financial institutions. It relies on blockchain technology, which records transactions on a decentralized, public digital ledger that cannot be altered or changed.
Using bitcoin is somewhat more difficult than using a regular bank account. It requires knowledge about safely buying and storing bitcoin via online exchanges and digital wallets. Unlike traditional banking methods, the onus to secure your funds falls upon your own shoulders, and there is often no way to recover lost bitcoin through mistakes – therefore it is vital to understand the basics before starting to trade.
Any book that aims to explain bitcoin must cover the essentials necessary to start using this digital currency, therefore as a minimum, it should include the following topics.
There are several different ways to acquire bitcoin. While it can be purchased directly from an individual, the most common way is via an online exchange. This usually requires registering your details and sending fiat currency from your bank account.
Once you have purchased bitcoin you want to ensure it is stored safely. It isn’t advisable to keep your bitcoin on an exchange for extended periods of time. Rather, it should be stored in a digital wallet to which you own a private encryption key along with a public key that can be used by anyone else to make deposits. Alternatively, a hardware wallet, which is similar to a thumb drive, can be used to keep your assets offline.
The price of bitcoin can fluctuate significantly, and as history has shown, it can increase quite rapidly. However, to realize gains, you will need to trade it for another digital currency or sell it. Both of these actions can be done via an exchange. If you would prefer not to convert your bitcoin back into fiat, then there are several ‘stable coins’ that have a fixed value of $1.
The process of creating new bitcoin is called mining. Most people do not get involved in the mining process as it requires a specialized computer, but it is important to understand the process as it forms the backbone of digital currencies. When a computer adds a transaction to the blockchain a small amount of bitcoin is minted and given as a reward to the person whose computer completed the transaction. This can be a good way to receive bitcoin without having to actually purchase it.
Bitcoin books are relatively inexpensive and range from around $5-$25.
A. Bitcoin transaction fees tend to vary, depending on how busy the network is. It generally hovers at around $5-$10, which is quite expensive for small amounts of money, but can be much cheaper than bank charges when sending large sums.
A. No. The number of bitcoin is capped at 21 million, which, in part, gives it
value and inflation. At present, about 19 million have been mined. The remaining two million will take roughly another 100 years to be mined.
“Cryptocurrency Investing For Dummies”
What you need to know: Written by Kiana Danial, an award-winning, internationally recognized investing and wealth management expert, this book takes readers through the basics of bitcoin and other cryptocurrencies.
What you’ll love: It offers advice on digital wallets and risk management strategies. It also can help understand current tax regulations imposed by various countries.
What you should consider: The book contains several advertisements for the author’s online investment company.
Where to buy: Sold by Amazon
"Mastering Bitcoin for Starters”
What you need to know: Written by ethical hacker Allan T. Norman, this book focuses on the technology behind blockchain and bitcoin.
What you’ll love: The information is concise and easy to understand and explains the basics of buying, selling, trading and securing bitcoin.
What you should consider: Some of the links to exchanges and wallets are outdated.
Where to buy: Sold by Amazon
“The Bitcoin Standard: The Decentralized Alternative to Central Banking”
What you need to know: This book is written from the viewpoint of an economist and describes the history of money and bitcoin's place in our current financial system.
What you’ll love: It aims to answer many of the more difficult questions about bitcoin, such as, “Who owns bitcoin?” “Can it be changed or destroyed?” and, “Is it used by criminals?”
What you should consider: Some readers feel the author's opinions are biased.
Where to buy: Sold by Amazon
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Chris Gillespie writes for BestReviews. BestReviews has helped millions of consumers simplify their purchasing decisions, saving them time and money.
