How to get rich off bitcoin

Bitcoin lives on the internet, not spil physical currency but that hasn’t stopped traders from driving up the cryptocurrency’s value.

Bitcoin lives on the internet, not spil physical currency but that hasn’t stopped traders from driving up the cryptocurrency’s value.

(Bloomberg photo by Chris Ratcliffe)

To paraphrase Ronald Reagan, ",Here wij go again.",

Bitcoin is on everyone’s lips this week and the price has gone nuts — shooting past $17,000 vanaf bitcoin ter Thursday’s trading. It has rocketed up $Five,000 ter less than a week, prompting wall-to-wall news coverage that is providing Sen. Ofschoon Franken, D-Minn., Russia, the FBI and even Voorzitter Donald Trump a run for their money.

The value of the digital currency — or cryptocurrency — is up about 15 times this year.

If you were around during the madness of the late 1990s dot-com bubble, the bitcoin mania might have a familiar personages: A fresh technology that wasgoed misunderstood yet spawning hundreds of companies and resulting te speculative trading.

Here’s a primer that might help demystify the fresh phenomenon for you investor types.

Q: What is bitcoin?

A: It is an electronic form of currency that has no physical presence anywhere te the world. There are no physical ",coins", like dimes, nickels and quarters. Bitcoins, like other cryptocurrencies, exist on the internet.

",It is fundamentally a lump of laptop code and software that verifies transactions,", said JR Lanis, an attorney with Drinker Biddle. ",It can be any kleuter of transaction. It serves a purpose and derives its value by verifying transactions. That is the technology.",

Essentially, it is code that says, ",this is what it is.",

Q: Why has the price gone crazy?

A: This one is effortless.

Limited supply. And, evidently, unlimited request — at least for the ogenblik.

People are buying up bitcoins, driving up the price of the 16.7 million coins ter circulation to a total value of $265 billion spil of midday Thursday. That’s not fairly the size of Handelsbank of America, but getting there.

",It’s speculative,", Lanis said. ",People think that the price is going to proceed to go up indefinitely.",

Q: Will it?

A: That would be a very first. Even shares of Amazon.com (whose founder and chief executive, Jeffrey P. Bezos, wields The Washington Postbode) dropped like a stone after the dot-com bubble burst. Amazon has since surged to become one of the market’s big winners.

Unlike almost any stock or unie, the floor value of a bitcoin is zero. It does not pay rente. There is no asset value affixed to it except what the market gives it. It has no central bankgebouw supporting it.

What it does have is a faithful following, which has its own value, just spil gold has had for thousands of years. Bitcoins have value because a community believes te it.

",Bitcoin is indeed a fascinating example of how human beings create value and is not always rational,", former Federal Reserve chairman Alan Greenspan said during an vraaggesprek on CNBC earlier this week. ",It is not a rational currency ter that case.",

Q: How can I buy bitcoins?

A: Two ways. Very first, you can go on websites such spil Coinbase or Gemini that trade digital currency and open an online account.

That’s what Leya Yusupov, a 37-year-old mother who lives ter Queens, did.

",I downloaded the Coinbase app, and created a password. Then I connected my account with my handelsbank account,", said Yusupov, who bought hier very first shares te August. ",You can also use a credit card, but you can buy more bitcoin if you have a handelsbank account spil your payment.", The Coinbase toverfee for hier purchase wasgoed $48.47.

",Te the beginning, they don’t let you buy a lotsbestemming,", said Yusupov, who has a finance degree from St. John’s University. ",Spil you buy more and have verification when you waterput te your ID, they see you buying more and boost your limit.",

Sitting on a big build up after cashing out some bitcoin? Don’t leave behind the tax man!

That’s the advice from two of the largest U.S. tax-preparation services, which are taking activity to help clients — and potential clients — understand the implications of possessing bitcoins and other crypto assets.

Sitting on a big build up after cashing out some bitcoin? Don’t leave behind the tax man!

That’s the advice from two of the largest U.S. tax-preparation services, which are taking activity to help clients — and potential clients — understand the implications of possessing bitcoins and other crypto assets.

She stores them ter hier ",digital wallet,", which can be used with mobile payment systems.

But buying bitcoin is about to get much lighter.

The Nasdaq Stock Market will begin a bitcoin futures webpagina on its commodities trading toneel te 2018. The Chicago-based CME Group and the Chicago Houtvezelplaat Options Exchange will start trading bitcoin futures any day now.

",It will become lighter once you begin trading it spil a commodity, like oil or gold,", Lanis said.

Q: Can it be hard to buy bitcoins?

A: Yes. This isn’t like going on Charles Schwab, Scottrade or E-Trade and buying and selling stocks.

Not all the cryptocurrency trading sites, known spil coin exchanges, are built for average folks like mij.

",The platforms aren’t fine,", Lanis said. ",The sites you go on to buy it are fairly rudimentary. They aren’t set up like the stock market sites.",

David Drake, chairman of LDJ Capital, a family office, said that a money transferring license and other regulatory licenses are necessary to operate a business with specie transfers and escrow. Most bitcoin platforms don’t have that license.

Q: What can I use it for?

A: Right now, storing value and speculating — mostly.

",People are witnessing it much more spil an investment than spil a daily form of currency,", Lanis said.

Bitcoins can be used to buy merchandise anonymously, without a middleman and involving lower or no fees and no banks, but it’s not that widely used. It’s not effortless when you have a ",currency", whose value fluctuates frantically.

Bitcoin surged past $17,000 Thursday — and shortly kasstuk $Nineteen,000 — spil the madness surrounding the virtual currency escalated just days before it starts trading on major U.S. exchanges. Bitcoin has gained more than $Five,000 te just the past two days.

At the same time, there are fresh concerns about the.

Bitcoin surged past $17,000 Thursday — and shortly kasstuk $Nineteen,000 — spil the madness surrounding the virtual currency escalated just days before it starts trading on major U.S. exchanges. Bitcoin has gained more than $Five,000 te just the past two days.

At the same time, there are fresh concerns about the.

",There are a few places and vendors ter the software business who accept it spil payment more than anything else,", Lanis said. ",Even some law firms. But it’s not that functional yet.",

Websites such spil Coindesk.com and 99Bitcoins.com list businesses that accept bitcoin spil payment.

Q: How do you sell it?

A: Exchanges have a mechanism for you to sell your coins and get capital for them or a different cryptocurrency, Drake said. Those exchanges include Bittrex, Shapeshift, Bitfinex, Losbreken and Yunbi.

Just like stocks or anything other investment, the risk is that you pay a high price and then the request drops sharply and the value of your purchase goes down with it. You could be left with something that’s worth much less than you paid for it.

Q: Should I invest ter it?

A: ",I wouldn’t,", said Daniel P. Wiener, chief executive of Adviser Investments, a Newton, Mass.-based rigid that manages more than $Five billion ter assets. ",Bitcoin speculation te 2018 is omschrijving to tech stocks te 2000 and real estate ter 2007. All ended badly.",

",It’s speculative,", Wiener said. ",I don’t indeed understand where the value is, and I always look askance at something that goes up 11 times te three weeks. It doesn’t manufacture anything. It doesn’t pay rente. I would not buy it. I would not recommend anyone buying it.",

Drake said he is personally invested ter 50 different cryptocurrencies.

And ",if you don’t mind a loterijlot of risk, then it’s worth a flier,", Lanis said. ",This is something that is enormously, utterly speculative. It’s not something I would handelsbank my retirement on.",

That may be so, but Yusupov is a blessed kampeerauto spil of Thursday. Last summer, she invested ter four bitcoins through a BitIRA retirement account. She also bought some coins for hier private account for just plain investing. She is up ems of thousands of dollars ter each.

",Ter life, you need to take risks,", Yusupov said. ",I want to see my money grow. I don’t want the specie to say there and erode. Bitcoin is going to go up. It’s the currency of the future.",

Jay Blaskey of BitIRA, not remarkably, is bullish on the cryptocurrency’s prospects spil a long-term holding.

",Technology moves ter a given direction,", Blaskey said. ",Wij are not going back to the pony and buggy, bitcoin is a solution built for the world wij have, not the world wij had.",

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