Bitcoin (BTC)

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Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.

What makes it different from normal currencies?

Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally.

However, bitcoin’s most important characteristic, and the thing that makes it different to conventional money, is that it is decentralized. No single institution controls the bitcoin network. This puts some people at ease, because it means that a large bank can’t control their money.

 Who created it?

A software developer called Satoshi Nakamoto proposed bitcoin, which was an electronic payment system based on mathematical proof. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with very low transaction fees.

 Who prints it?

No one. This currency isn’t physically printed in the shadows by a central bank, unaccountable to the population, and making its own rules. Those banks can simply produce more money to cover the national debt, thus devaluing their currency.

Instead, bitcoin is created digitally, by a community of people that anyone can join. Bitcoins are ‘mined’, using computing power in a distributed network.

This network also processes transactions made with the virtual currency, effectively making bitcoin its own payment network.

 So you can’t churn out unlimited bitcoins?

That’s right. The bitcoin protocol – the rules that make bitcoin work – say that only 21 million bitcoins can ever be created by miners. However, these coins can be divided into smaller parts (the smallest divisible amount is one hundred millionth of a bitcoin and is called a ‘Satoshi’, after the founder of bitcoin).

 What is bitcoin based on?

Conventional currency has been based on gold or silver. Theoretically, you knew that if you handed over a dollar at the bank, you could get some gold back (although this didn’t actually work in practice). But bitcoin isn’t based on gold; it’s based on mathematics.

Around the world, people are using software programs that follow a mathematical formula to produce bitcoins. The mathematical formula is freely available, so that anyone can check it.

The software is also open source, meaning that anyone can look at it to make sure that it does what it is supposed to.

 What are its characteristics?

Bitcoin has several important features that set it apart from government-backed currencies.

  1. It’s decentralized

The bitcoin network isn’t controlled by one central authority. Every machine that mines bitcoin and processes transactions makes up a part of the network, and the machines work together. That means that, in theory, one central authority can’t tinker with monetary policy and cause a meltdown – or simply decide to take people’s bitcoins away from them, as the Central European Bank decided to do in Cyprus in early 2013. And if some part of the network goes offline for some reason, the money keeps on flowing.

  1. It’s easy to set up

Conventional banks make you jump through hoops simply to open a bank account. Setting up merchant accounts for payment is another Kafkaesque task, beset by bureaucracy. However, you can set up a bitcoin address in seconds, no questions asked, and with no fees payable.

  1. It’s anonymous

Well, kind of. Users can hold multiple bitcoin addresses, and they aren’t linked to names, addresses, or other personally identifying information. However…

  1. It’s completely transparent

…bitcoin stores details of every single transaction that ever happened in the network in a huge version of a general ledger, called the blockchain. The blockchain tells all.

If you have a publicly used bitcoin address, anyone can tell how many bitcoins are stored at that address. They just don’t know that it’s yours.

There are measures that people can take to make their activities more opaque on the bitcoin network, though, such as not using the same bitcoin addresses consistently, and not transferring lots of bitcoin to a single address.

  1. Transaction fees are miniscule

Your bank may charge you a £10 fee for international transfers. Bitcoin doesn’t.

  1. It’s fast

You can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment.

  1. It’s non-repudiable

When your bitcoins are sent, there’s no getting them back, unless the recipient returns them to you. They’re gone forever.

Bitcoin price

Bitcoin Wallets

One of the most important aspects of owning cryptocurrencies is storage. Down below you will find carefully selected wallets. Remember, a hardware wallet is always advised!

Ledger Nano S

Ledger Nano S is a Bitcoin, Ethereum and Altcoins hardware wallet, based on robust safety features for storing cryptographic assets and securing digital payments. It connects to any computer (USB) and embeds a secure OLED display to double-check and confirm each transaction with a single tap on its side buttons.

ledger nano s fold medium - Bitcoin (BTC)

Buy a Ledger

TREZOR

TREZOR is a single purpose device which allows you to make secure Bitcoin transactions. With TREZOR, transactions are completely safe even when initiated on a compromised or vulnerable computer. Because the use of TREZOR is very easy and intuitive we believe it will help Bitcoin adoption among people not familiar with the security issues.

trezor transparent - Bitcoin (BTC)

Buy a TREZOR

Coinbase

Next to being an easy to use exchange for cryptocurrency, Coinbase also offers a wallet service for Bitcoin, Ethereum and Litecoin. It is called the Coinbase Vault. The Coinbase vault is available to all coinbase users. It also offers a group vault, a group vault requires email confirmations from multiple different users when the master account holder (you) requests a withdrawal.  No one else can create a withdrawal, but a certain number of approvals are needed before funds can be withdrawn, either 2-of-3 or 3-of-5. It is very important to designate only trusted individuals as co-signers!

Open a wallet at Coinbase

Where to buy Bitcoin?

  • binance - Bitcoin (BTC)
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    Binance
    Exchange rating:
    10
    Binance is world's largest altcoin exchange. It offers many cryptocurrency markets with high liquidity and low fees. Every cryptocurrency enthusiast should have a Binance account!
  • Coinbase - Bitcoin (BTC)
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    Coinbase
    Exchange rating:
    9
    Coinbase is the world's largest Bitcoin broker. They represent an easy and fast way for new users to purchase Bitcoins. Coinbase supports over 30 countries, including the US, Europe, UK, Canada, and Australia.
  • litebit - Bitcoin (BTC)
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    LiteBit
    Exchange rating:
    8
    Litebit is a Euro based exchange where many different cryptocurrencies can be bought directly. It offers many payment methods and is very beginner friendly.
  • coinmama - Bitcoin (BTC)
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    Coinmama
    Exchange rating:
    7
    Coinmama is an exchange that serves almost all countries in the world for buying Bitcoin and Ethereum with credit cards. Coinmama offers a very easy buying process and therefore is beginner friendly.
  • changelly - Bitcoin (BTC)
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    Changelly
    Exchange rating:
    7
    Changelly offers an easy to use interface for exchanging a wide variety of cryptocurrencies. It combines rates from different exchanges to offer you the best price.
  • cexio - Bitcoin (BTC)
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    CEX.io
    Exchange rating:
    8
    CEX.io is a UK based cryptocurrency exchange, which values high security and legal compliance. It offers a wide variety of trading tools. A traders delight but might be confusing for first time buyers.
  • bitpanda - Bitcoin (BTC)
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    BitPanda
    Exchange rating:
    7
    BitPanda is a Austrian based exchange that offers a variety of cryptocurrencies. With a wide variety of payment options and customer friendly user interface, it is a good choice for buying cryptocurrencies.
  • bitonic - Bitcoin (BTC)
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    Bitonic
    Exchange rating:
    7
    Bitonic is a Dutch Bitcoin broker. It offers a simple user interface and is therefore very beginner friendly. Users can buy Bitcoin directly with iDeal and receive the Bitcoin directly in their wallet.
  • bitmex - Bitcoin (BTC)
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    BitMEX
    Exchange rating:
    8
    BitMEX is an exchange geared to more advanced cryptocurrency traders. It offers high liquidity and a range of cryptocurrency derivatives as futures. However, it can also be used for just buying cryptocurrencies.
  • localbitcoins - Bitcoin (BTC)
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    LocalBitcoins
    Exchange rating:
    8
    LocalBitcoins is a long running service and offers an easy and private way of buying Bitcoins. It is one of the only platforms where Bitcoin trading with cash is facilitated.
  • happycoin - Bitcoin (BTC)
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    HappyCoins
    Exchange rating:
    6
    HappyCoins is one of the longer running Bitcoin only exchanges. It offers a pleasant buying experience with a wide variety of payment options and the occasional 'HappyHour' with 0% trading fees.
  • cointed - Bitcoin (BTC)
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    Cointed
    Exchange rating:
    6
    Cointed is a Austrian based exchange offering euro markets for a variety of cryptocurrencies. This exchange allows for direct buying or for trading on the exchange offering an integrated wallet.
  • bl3p - Bitcoin (BTC)
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    BL3P
    Exchange rating:
    6
    Bl3P, as a subsidiary of Bitonic, is a long running and trusted Bitcoin exchange. It services all European countries. It is one of the smaller exchanges and therefore has limited liquidity.
  • bitrush - Bitcoin (BTC)
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    Bitrush
    Exchange rating:
    7
    Bitrush is a Dutch cryptocurrency broker that allows for a very smooth buying process of various cryptocurrency. With only a few clicks you can buy cryptocurrencies and have them sent directly to your wallet!
  • bitcoinde - Bitcoin (BTC)
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    Bitcoin.de
    Exchange rating:
    7
    Bitcoin.de is the longest running German Bitcoin exchange. It offers high security and regular audits on their funds. It offers a moderate user experience.
  • anycoin - Bitcoin (BTC)
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    Anycoin
    Exchange rating:
    8
    Anycoin is a Dutch cryptocurrency broker which allows you to buy multiple cryptocurrencies directly with a wide variety of payment options. Easy user interface makes it beginner friendly.
  • Bittrex - Bitcoin (BTC)
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    Bittrex
    Exchange rating:
    8
    Bittrex is a cryptocurrency only exchange. It is used by most seasoned traders and offers many advanced tool. Because of the many users most cryptocurrency markets have high liquidity.
  • shapeshift - Bitcoin (BTC)
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    ShapeShift
    Exchange rating:
    9
    Directly exchange cryptocurrencies with shapeshift. The elegant user interface makes it easy for beginner to exchange their cryptocurrencies against fair market prices.
  • Bitfinex - Bitcoin (BTC)
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    Bitfinex
    Exchange rating:
    7
    Bitfinex is a widely used cryptocurrency exchange. It offers very low fees and high liquidity. For traders and large buyers this is a go to exchange as it offers fair market prices, even for big amounts.
  • Kucoin - Bitcoin (BTC)
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    KuCoin
    Exchange rating:
    8
    New and upcoming exchange offering many cryptocurrencies. This exchange is a delight for everybody that wants to get into trading. KuCoin is a cryptocurrency only exchange.
  • kraken - Bitcoin (BTC)
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    Kraken
    Exchange rating:
    8
    Kraken offers cryptocurrency markets for multiple fiat currencies. It is a highly financed and trusted exchange and often publishes audits of its funds.
  • bitstampnewlogo - Bitcoin (BTC)
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    Bitstamp
    Exchange rating:
    9
    Bitstamp is one of the longest running Bitcoin exchanges and now offering various other cryptocurrencies. It has very low fees, and a good range of payment options.
  • btcdirect - Bitcoin (BTC)
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    BTC Direct
    Exchange rating:
    7
    BTC Direct offers a service to directly purchase cryptocurrencies with fiat. A simple user interface in combination with a low minimum order amount makes the buying process easy for first time buyers.
  • coinfloor - Bitcoin (BTC)
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    Coinfloor
    Exchange rating:
    7
    A UK base regulated and trustworthy exchange. Its GBP markets are one of the most liquid GBP markets and therefore is a good choice for UK citizens. Coinfloor also offers Coinfloor Vaults, a secure storage solution.
  • cubits - Bitcoin (BTC)
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    Cubits
    Exchange rating:
    7
    Cubits is a european exchange offering bitcoin markets for 20 different fiat currencies and a wide variety of payment methods. With its intuitive design, buying Bitcoin is made easy.
  • gdax - Bitcoin (BTC)
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    GDAX
    Exchange rating:
    8
    GDAX is the cryptocurrency exchange linked to Coinbase, worlds biggest cryptocurrency broker. It offers low fees and high liquidity. While good for traders, first time buyers are advised to go to Coinbase.
  • itbit - Bitcoin (BTC)
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    itBit
    Exchange rating:
    6
    ItBit is a US based exchange with low fees. Due to deep liquidity you can always be assured that you get a fair market price! ItBit also offers an OTC trading desk.
  • paymium - Bitcoin (BTC)
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    Paymium
    Exchange rating:
    6
    Paymium offers advanced trading as well as simple Bitcoin buying via their mobile app. It serves the European market and has a variety of payment options.
  • poloniex - Bitcoin (BTC)
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    Poloniex
    Exchange rating:
    5
    Widely used and long running cryptocurrency only exchange. Offering advanced tools and high liquidity, Poloniex should mostly attract seasoned cryptocurrency traders.
  • safello - Bitcoin (BTC)
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    Safello
    Exchange rating:
    7
    Trusted Swedish exchange with a wide variety of payment methods for European customers. This exchange is especially known for their excellent customer support.