Investing in bitcoin (BTCNZD) seems complicated to most people, but once we break it down into a few steps, it’s pretty simple.
Bitcoin is a digital currency available for electronic use and distribution. Bitcoin is not tied to any central bank or administrator, and is sent over the P2P network independently of intermediaries.
In this article, we will explain everything about Bitcoin cryptocurrency, including:
- what it is Bitcoin and how to buy it in NZ, how mining works, current bitcoin worth in NZD, how to invest and how to sell bitcoin and many more interesting facts about this popular cryptocurrency. So let’s dig in!
What is Bitcoin?
Bitcoin is the first decentralized digital currency created in 2009, January.
The creator of the Bitcoin code and the first blockchain database is the mysterious Satoshi Nakamoto, who described this currency in his book “The White Paper” published in 2008.
The Satoshi identity has never been discovered or confirmed, and it is suspected that a much larger organization is behind the creation of Bitcoin.
The biggest advantage of Bitcoin is that it offers low transaction fees than the usual payment methods and that, unlike national currencies, Bitcoin is a totally decentralized body.
It is not a real currency like NZD, USD or EUR, but a so-called cryptocurrency or virtual currency because it is not available in physical form and uses cryptography as security.
Bitcoin is stored on a public ledger (blockchain) which everyone has easy access to through unique encryptions (keys). Bitcoin is not supported by any bank organization or government, but despite that, it is a very popular payment method in the world.
What’s more, the creation of Bitcoin has started a chain reaction in the launch of hundreds of new cryptocurrencies, which have acquired a common name as altcoins.
Every Bitcoin transaction must be verified by a process known as “mining”, which requires a large amount of computing power.
How to buy Bitcoin?
Trading or investing in Bitcoin does not require much, but only:
- an account in the cryptocurrency exchange service,
- secure internet connection
- payment method (recommended use of personal e-wallet)
- personal documentation to be provided for the protocol of knowing your client (KYC) on the platform
Wallet financing includes credit cards, debit cards and bank accounts. Bitcoin can also be bought on P2P exchanges and special ATMs.
How Bitcoin system works?
The Bitcoin system consists of a group of computers called “miners” or “nodes” that run the Bitcoin code and store its blockchain.
The Bitcoin blockchain can be compared to a group of blocks. Each block contains a group of transactions.
All computers running the bitcoin blockchain have the same list of transactions and blocks, and all computers have access to new blocks in which new ones are stored by the transaction.
These transactions are occurring in real-time and anyone no matter they run a “node” of Bitcoin or not, can see these transactions.
The system is so secured that it is very hard to make an attack.
To cheat the system, the individual would need to have control of 51% computing power of the Bitcoin system, which is impossible.
Even if an attack happens, all the bitcoin miners and users that are part of the bitcoin network would just split to a new blockchain, which would result in a waste of time for an attacker.
Bitcoin tokens are kept by public and private keys that are made of long strings of letters and numbers in connection with the encryption algorithm.
Public key work in the same way as a bank account number and serves as the address to which bitcoin is sent.
The private key should be kept and kept secret because it is used to authorize all bitcoin transactions.
We can compare the private bitcoin key with the pin code of your Visa / Master card because they have the same role.
What is Peer-to-Peer technology (P2P)
Bitcoin is the first cryptocurrency that uses peer-to-peer (P2P) technology to enable instant transactions.
The companies and individuals who possess the governing computing power and partake in the Bitcoin web (miners) are in control of processing the trades on the blockchain.
In return “miners” receive rewards.
Rewards are releases of new Bitcoin and trade fees paid in Bitcoin.
Bitcoin miners are considered as the decentralized authority that enforces the Bitcoin network credibility. New bitcoins are released to “miners” at a fixed but occasionally declining momentum.
Only 21 million bitcoins can be mined in total. In November 2021, there was existed around 18.875 million Bitcoins, which mean there are less than 2.125 million Bitcoins left to be mined.
Bitcoin and other cryptocurrencies operate very differently compared to fiat currency.
In centralized banking procedures, the currency is created at a rate that matches the development of the economy.
A decentralized Bitcoin system has set a release rate according to an algorithm.
This is how Bitcoin mining work
In short, bitcoin mining is the process of solving computationally complicated puzzles that reveal a new block that is added to the bitcoin blockchain.
Bitcoin mining is the procedure by which Bitcoin is released into circulation.
For bitcoin mining various hardware can be used, however, some bring higher rewards than others.
If you also use chips such as application-specific integrated circuits (ASICs) and graphics processing units (GPUs), you can achieve even more rewards.
These mining processors are also known as the Mining Rigs.
Did you know that one bitcoin is divisible by as many as eight decimal numbers, while the smallest unit is called Satoshi?
If necessary, and if the participating miners accept the change, Bitcoin could eventually be made divisible to even more decimal places.
But there is no limit, if miners agree and accept the Bitcoin can be evenly divided into more decimal places.
Timeline of Bitcoin
- 18th August, 2008: The domain with the name Bitcoin.org was registered. It is still unknown to public who stands behind it, due to WhoisGuard protection.
- 31st October, 2008: The first announcement by Satoshi Nakamoto to the Cryptography Mailing List with the introduction sentence: “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.”
- 3rd January, 2009: Block 0 is mined; The first Bitcoin block also known as “Genesis Block” with the text message “The Times 03 / Jan / 2009 Chancellor on brink of second bailout for banks,” This message has not yet been deciphered whether it was created due to evidence when the block was made or due to political goals.
- By 2013: Bitcoin had its ups and downs where we recorded its first peak to $ 29.60 in June 2021, as well as the biggest drop to 2.05 the same year. 2013 witnessed by then the highest value in value when Bitcoin reached $ 230. At the end of 2013, it reached a value of $1237 to fall to $ 687 three days later.
- Through 2014: and the early Januar 2015, Botcoin value droped to $315,21.
- From 2016: and further the Bitcoin value start to climb slowly and in 2017 the value climbed to $2000 in May, and then jumped to an unbelievable $19.354.29 on 15th December 2017.
- In 2020: due to a pandemic, the value of bitcoin starts the year at $ 6,965, but all shutdowns and restrictions have accelerated the growth of bitcoin. On November 23, 2020, the price of bitcoin was $ 19,157, while in December 2020 it reached just under $ 29,000.
Curent Bitcoin price nzd
See the current Bitcoin price in currency of NZ dollars here.
Who is Satoshi Nakamoto?
Despite the popularity of Bitcoin, as well as the fact that El Salvador is the first country to accept Bitcoin as a legal tender; there is so little to know about the true creator of Bitcoin cryptocurrency.
Nobody knows who owns a Bitcoin, the only thing that is known is the name and pseudonym “Satoshi Nakamoto”, behind. Rhe real creators of this currency are hiding.
The original Bitcoin White Paper was released in 2018 by an individual or group of people. The White Paper was a notice of the arrival of the first cryptocurrency and what its purpose was.
Before Bitcoin, similar currencies that did not have the power of bitcoin were also released. The owners of these currencies are well known, they include: Adam Back (Hashcash) Wei Dai (b-money) Nick Szabo (bit-gold) Hal Finney (Reusable Proof of Work)
In the White Paper, you can find many references to B-money and HashCash as many other research fields related to digital currencies before. That is why it is not strange when many speculate that some of these individuals have something with creating Bitcoin.
No wonder why the creator or creators of bitcoin are secret, two main reasons include:
- Privacy: Considering that Bitcoin is so popular, if Satoshi Nakamoto revealed his identity he would become a public figure with a lot of media on his back as well as various world governments.
- Competition with existing fiat currencies: If Bitcoin received mass adoption, there would be a great chance that this cryptocurrency would surpass the existing sovereign fiat currencies. This would not have pleased the state government, and legal action had been taken against the person who created Bitcoin.
Bitcoin as a payment method
Bitcoin serves as a payment method for various products and services. In addition to online payments, bitcoin is also accepted in many stores on land. You will notice the “Bitcoin accepted” label on many stores.
Payments are made in three ways, which include:
- required hardware terminals
- wallet address
- KR codes
- touch screen application
In recent years, more and more online businesses have added this payment option to their list of accepted payment methods.
Top 10 businesses that accept Bitcoin in NZ
Here is the list of the top ten businesses in New Zealand that accept Bitcoin:
- Auckland City Hotel (www.achhobson.co.nz)
- Abalone Thai Christchurch (abalonethai.co.nz)
- Aurum Auckland jewerly (www.aurum.co.nz)
- Freshstore New Zealand (freshstore.co.nz)
- Future Health Dunedin (futurehealth.co.nz)
- Party Dudes (www.partydudes.co.nz)
- Bookabach (www.bookabach.co.nz)
- Cerebral Palsy Society New Zealand (cerebralpalsy.org.nz)
- Mane Salon Wellington (manesalon.co.nz)
- TreeFellas Auckland (www.treefellas.co.nz)
How to invest in Bitcoin?
Many investors will say that Bitcoin is the digital currency of the future. Many use it because it offers a fast payment system with very low transaction fees.
One of the biggest reasons for the growth of bitcoin is that it acts as an alternative to fiat currencies and traditional commodities such as gold, silver and others.
The US IRS said in March 2014 that all cryptocurrencies would be taxed as if they were property and not currency.
The most popular way to invest in Bitcoin is through the bitcoin exchange, but there are other ways to earn it.
Big jumps in the price of Bitcoin have attracted many investors in the last few years, and this currency has become very popular.
In December 2019, one bitcoin cost about $ 7k, while a year ago the price of psol jumped by 300%, so you could buy one bitcoin for about $ 28k.
Unbelievable, isn’t it, and did you know that in the beginning of 2021, the price of bitcoin rose to an incredible $ 68k.
The fact is that Bitcoin and other cryptocurrencies are more popular as an investment value than as a medium of exchange.
Understand the risks
Bitcoin is still new, and many people still don’t understand what it is and how it works. Plus, with the use of cryptocurrencies comes a lot of risk.
Here we have listed few important things you need to know if you want to involve with Bitcoin, and these include:
- Bitcoin and other cryptocurrencies are high volatile and risky
- Price of Bitcoin is not stable, and can go down and up very fast
- Bitcoin is not regulated in NZ
- If you plan to buy Bitcoin, NZ goverment reccomend Kiwis to use NZ based trading platforms that offers maximum level of protection
- Trading platfroms must be registered by the FSP register (Financial Service Providers)
- Bitcoin trading platforms, cryptocurrencies and the users are often a target of hackers, scams and online frauds
Investing in this cryptocurrency have its own risks.
By looking at a fact that Bitcoin is a big competition to government fiat currencies, and that can be used for many illegal transactions and activities such as money laundering, tax evasion and others.
In a result of that we can say that it is not stable and it can be regulated, restricted and banned in some countries.
Frequently asked questions
Why Is Bitcoin valuable?
In the last decade the value of bitcoins has exponentially risen from NZD1,5 to around NZD 100,000 during 2021, and to more than NZD 58,000 in beginning of the 2022.
Bitcoin value deriving from sources such are:
- market demand
- marginal production cost
- and relative scarcity
- So even if we talk about virtual currency that is intangible its total market cap for November 2021 was around $1.11 trillion of US dollars.
Is Bitcoin a scam?
Bitcoin is not a scam. This virtual and untouchable currency has been in circulation for more than ten years, and its system has proven to be stable.
The great advantage of bitcoin is that its open source code can be downloaded and analyzed by anyone for potential errors or evidence of malicious intent.
Of course, the risk that arises when trading bitcoins has nothing to do with the open source of bitcoin system, but it is the influence of third parties, most often hackers and fraudsters who want to fraud you and steal your bitcoins.
How many bitcoins are there?
The exact limit on the total number of bitcoins is 20,999,999,9769. At the moment of writing this article, there are 18,925,137 bitcoins in existence. This means that there are only left 2.1 million bitcoins to be mined.
How to sell Bitcoin?
To sell Bitcoin in New Zealand it is a must that you have acess to your private key. If you have your private bitcoin key, the selling will be the simplest and easiest problem to solve. All you need to do is to find online exchanges that support NZD. There are thousands of exchanges to choose from, but the best is to sell on those with (FSP register).
Who has the most Bitcoin?
The Bitcoin owner was it individual or gruop Satoshi Nakomoto owns more than 1,000,000 BTC, which is more that any other wallet adress entity owner. Beside Satoshi Nakamoto there are four other BTC millionaires that own all together cirka 672,000 BTC.
- Adam Back
- bank account
- Bitcoin mining
- Central Bank
- computing power
- Credit Cards
- Cryptocurrency Exchange
- digital currencies
- digital currency
- Fiat currency
- How To
- integrated circuits
- Legal Action
- Market Cap
- mining machines
- Most Popular
- New Zealand
- Online Businesses
- Online Casino
- online payments
- open source
- Payment Methods
- payment system
- Private Key
- Private Keys
- the world
- third parties
- virtual currency
- What is