Before you buy bitcoin, here is everything you need to know about cryptocurrency

After years of public skepticism, Bitcoin is finally gaining credibility.

Tesla is now accepting Bitcoin as a form of payment and announced that it has purchased $ 1.5 billion ($ 1.94 billion) in the cryptocurrency as part of its cash holdings.

Meanwhile, Uber and Mastercard also said they wanted to accept Bitcoin.

And Twitter CEO Jay Z and Jack Dorsey announced that they are setting up a Bitcoin development fund.

There is speculation that more companies will invest in Bitcoin and more companies will join.

Bitcoin is stored in a digital wallet that is either in the cloud or on your computer. Photo credit: Getty Images

Some investors believe this could be a good hedge against inflation and a weak dollar.

The US Federal Reserve cut interest rates in March 2020, weakened the US dollar significantly and increased the price of Bitcoin.

So, if you’ve ignored Bitcoin and thought it might just be a financial fad, now is the time to pay attention.

Here’s what you need to know.

What is bitcoin

Bitcoin is a cryptocurrency created in 2009 by an unknown person under the alias Satoshi Nakamoto.

Transactions are anonymous and are carried out without a broker or intermediary.

You can’t physically use Bitcoin – it’s digital currency.

And it’s decentralized, which means it’s not controlled by any bank or government.

Bitcoin hit a record $ 64,829.The most popular cryptocurrency, Bitcoin, hit a record $ 64,829. Image credit: AP

Right now, it can be used anywhere from to PayPal – and that list is growing fast.

Many people see Bitcoin as a good investment too. And that was certainly true this week as Bitcoin topped $ 60,000 ($ 77,670).

In January, the cryptocurrency hit records of over $ 40,000 ($ 51,780).

Where can I buy Bitcoin?

Bitcoin is 100 percent digital.

Marketplaces known as “bitcoin exchanges” allow people to buy or sell bitcoins in various traditional currencies.

Coinbase is a leading exchange alongside Coinmama, CEX.IO and Gemini.

Where do I keep my Bitcoin?

Bitcoin is stored in a digital wallet that is either in the cloud or on your computer.

It’s like having a virtual bank account.

However, unlike bank accounts, stored Bitcoin is not always insured.

What has Elon Musk got to do with Bitcoin?

Elon Musk, CEO of Tesla and SpaceX, has tweeted support for assets in the past, driving their value soaring. The richest man in the world is a very big bitcoin booster.

“I think (Bitcoin) is on the verge of widespread adoption by conventional finance professionals,” Musk said in a recent interview about the audio-only app Clubhouse.

Not long after, when he formalized Tesla’s relationship with crypto, the company announcements began flowing.

Elon Musk, CEO of Tesla (file)Elon Musk’s Tesla announced that it had purchased $ 1.5 billion worth of Bitcoin. Image credit: AP

Is Bitcoin Safe?

The cryptocurrency is very volatile and therefore very risky.

For example, Bitcoin value rose to $ 42,000 in January, fell to $ 30,000, and then rose back to $ 40,000 – all within a week.

And there are some inherent dangers to a digital currency: a hacked server, deleted file, or lost password can mean the money is lost forever.

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