Bitcoin is a decentralized currency, meaning there is no bank or governmental intervention in the process of sending or receiving payments. Payments are sent via a peer-to-peer transaction network that is secured by highly advanced cryptography, and all transactions are recorded via a distributed ledger referred to as a blockchain.
Transactions are completed between two addresses, and each address has a public key and a private key. The public key is used to record the transaction on the ledger/blockchain, and the private key is used to keep that transaction anonymous and secure.
Solves 4 major issues with the US Dollar/other government currencies:
1. Limited supply. While there are several major coins out there (just like there are several different countries, each with their own currency), all of the major coins are supply limited, which means their US dollar equivalent price will necessarily increase as their rate of adoption as a means of exchange increases (ex., Overstock.com accepts bitcoin and 4 other major coins), particularly as the steady devaluation of the US dollar continues.
2. Decentralized governance. Each major coin is lead by a non-profit foundation that makes decisions about the future of the coin by the consensus of the network participants. Ie., instead of a select few people at the Federal Reserve deciding things about the value of the US dollar, the cryptocurrency coins are governed by democratic consensus.
3. Universality. You can use bitcoin and other major currencies both in the US and internationally without dealing with international exchange rates and fees. There are concerns about money laundering that have mainly been propagated by the traditional banking sector which is not keen to see their money transfer business (international exchange, wire transfer, etc.) taken over by superior (and much cheaper) technology. Keep also in mind that the traditional banking sector was (up until the advent of cryptocurrency) the only means by which money could be laundered, as was made famous yet again just recently with JP Morgan (google "JP Morgan money laundering").
4. Privacy and security. In the traditional banking world, all of your digital transactions (credit/debit card) are tracked to the penny, and because your money and personal information is stored in centralized locations, both are highly vulnerable to fraud and theft. Bitcoin and other cryptocurrencies are nearly impossible to steal as they are secured by advanced cryptography, and because your personal identity is not tied to your holdings, identity theft is also functionally impossible.
How Do I Get It?
Easiest place to obtain it is Coinbase, which is the first and by far the largest provider of US dollar -> Cryptocurrency exchanges. They do ask for a couple of forms of identification in order comply with US government regulations, and the validation/purchase process can take up to a couple of weeks give the recent interest/volume.
If you use the below link and buy at least $100 worth of Bitcoin, you will get an additional $10 free after they validate the transaction.
There are a few different avenues to explore. There are five main options people normally do (listed below). Please keep in mind that all four of these options are highly speculative and should be considered high risk, ie., do not invest what you can’t afford to lose. Please also understand that I am merely providing information on what I am personally invested in, and should in no way be considered investment advice.
1. Hold on to it as a means of wealth diversification and as a hedge against traditional currency devaluation. This is considered the safest option. If you are investing more than $1000, it's generally considered wise to use the “vault” feature on Coinbase that adds extra layers of protection for your holdings. Alternately, you can store your bitcoin offline by using a Ledger Nano wallet.Click Here For Ledger Nano Wallet
2. Use the bitcoin you have purchased to invest in cryptocurrency mining. “Mining” in this context is not much different than mining for gold; people use strong, specialized equipment to create bitcoin, in this case by solving complex cryptographic equations that have the dual function of maintaining and securing the transaction network. There are a couple of options to explore with this:
A. Mine directly by purchasing a specialized computer (works the same as a regular computer except it has more processing power; I recommend AVADirect as they have the best systems at the best pricing) and downloading Minergate. Minergate is a great way to start out because it does all of the technical software piece for you, so all you have to do is hit "start mining" and you're done. It's the "easy button" for mining.
B. Purchase asset tokens (similar to stock shares) of companies that specialize in cryptocurrency mining; these tokens can be purchased by sending your bitcoin to an exchange (see below) and trading your bitcoin for that asset token. I am personally invested in Envion (EVN), which is purchasable via the HitBTC exchange, but there are many others to look at and consider (again, please do your own due diligence).
3. Use the bitcoin you have purchased to trade in other currencies or assets. The below provider, Binance, is considered to be the best platform by many, and I have personally used it before and consider it to be pretty user friendly, they have a nice mobile app as well.
I also frequently use the exchange HitBTC, which has some asset and currency tokens not listed on Binance (ex., EVN). Between the two, I've been able to trade/obtain everything I've found to be a good investment to this point.
4. Peer to peer lending via BitBond. This service is similar to Lending Club insofar as you are loaning your bitcoin like a bank would loan money to a qualified pool of borrowers, who are given letter ratings from A - G based on their proven creditworthiness. Rates of return range from 6% - 30%+ depending on the risk level you are comfortable with. This is a nice option to get additional interest on your bitcoin on top of any potential price appreciation.