Bitcoin: what you need to know

Bitcoin: what you need to know

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Just this week, Tesla (TSLA) said it will soon accept bitcoin as payment for its vehicles and said it bought $ 1.5 billion in cryptocurrencies as part of its cash. About that, Uber (UBER) and MasterCard (BAD) they also said they plan to start accepting bitcoin. And BNY Mellon – the oldest American bank, whose history goes back to the founding of Bank of New York by Alexander Hamilton in 1784 – announced that it has formed a “digital assets” unit.

So if you’ve been ignoring bitcoin thinking it might just be a financial fad, now is the time to start paying attention. Here’s what you need to know.

Bitcoin is a cryptocurrency created in 2009 by an unknown person, using the pseudonym Satoshi Nakamoto. Transactions are anonymous and without brokers or intermediaries.

You can’t use bitcoin physically – it’s a digital currency. And it is decentralized, which means that it is not controlled by a bank or government.

Right now it can be used everywhere, from Overstock.com to PayPal – and that list is expanding rapidly.
Many people also see bitcoin as a good investment. And that was certainly true this week, considering that bitcoin has hit a record high of $ 49,000 this week.

Where can I buy bitcoin?

Bitcoin is 100% digital. Markets called “bitcoin exchanges” allow people to buy or sell bitcoins using different traditional currencies. Coinbase is a leading exchange, along with Coinmama, CEX.IO and Gemini.

Where do I keep my bitcoin?

Bitcoin is stored in a digital wallet, which is either in the cloud or on the computer. It is like having a virtual bank account. But unlike bank accounts, the stored bitcoin is not insured by the FDIC.

Wait, what does Elon Musk have to do with this?

Elon Musk, CEO of Tesla and SpaceX, has a history of tweeting support for assets and sending his value through the roof, and the richest man in the world is a big bitcoin booster.

“I think that [bitcoin] is about to get wide acceptance by mainstream finance people, “said Musk in a recent interview on the social audio app Clubhouse.

Not long after that, he formalized Tesla’s relationship with cryptography, corporate ads began to flow.

Is bitcoin safe?

Cryptocurrency is highly volatile and therefore very risky. For example, in January, the value of bitcoin rose to $ 42,000, fell to $ 30,000, and rose again to $ 40,000 – all within a week.

And there are some dangers inherent in a digital currency: a hacked server, a deleted file or a lost password can mean that funds will be lost forever.

– Paul R. La Monica from CNN, Chris Isidore, Tal Yellin and Hanna Ziady contributed to this report.

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