How do you get actual physical cash from Bitcoin?
I quite obviously don't know jack about any of that market crap (the only "finances" I know about are my own) but how does something that's completely intangible result in people getting actual tangible money from it? Like, I can comprehend investing in a company that sells something because that company is actually worth something because it supplies something that people consume, but as far as I know (which again, is not very much) bitcoin only exists because people believe it exists and investing in it is predicated on the number of people who are into it. Or something.
Also, what's the legal status of Bitcoin? I know you live in a different nation than I do Sonny so things are likely different but is this really something that nations around the world recognize as valid currency? My greatest misgiving about the whole thing is that if I invested $1000 USD into Bitcoin, I'd never be to use whatever it grows to as actually legal tender in the US. How do you actually spend Bitcoins and where?
While I do have a BA in Finance (and an MBA), I didn't know anything about Bitcoin other than the very minimal knowledge like that it is a virtual currency and that it was very speculative.
A good friend of mine, who's very smart and very talented, kept pumping the Bitcoin topic to me for quite a while. Not as an investment but rather as a new path for a career... He said that once this thing blows, companies will be looking for people with financial background who understand cryptocurrencies. I kept saying 'okay, okay' but never really found the time (work, two kids, wife an MD, etc.).
A few months ago I was fired from work and I decided to finally take some time and learn the topic.
My mind was blown. The more I studied it, the deeper I went down the rabbit hole and the more I am convinced that this is really our future.
You can get all of the info online for free but I paid some money and signed up for an online academy ("Ivan on Tech") that teaches you from zero knowledge to being an expert (either programming on blockchain or business route without programming).
I'll answer your questions *very* shortly but please take time to learn the topic before you do anything. Don't buy until you understand what you are buying, why you are buying it and how to keep it safe.
So Bitcoin is a cryptocurrency that is being spread through technology called blockchain. Blockchain is extremely secure and immutable (that means that all history is saved on it... you cannot change it).
Everyone can connect to the blockchain and everyone has a copy of it at all times (this means that it is decentralized
). Much like radio or internet, no one can control, manipulate it nor shut it down.
This is the greatest power of the Bitcoin and this is why many institutions are afraid of it. People in country with failing economies (like Venezuela), where the local currency has no value, are using Bitcoin to save themselves.
Sure, there can be local regualtion (like a ban on cryptocurrencies) but governments understand that this cannot be stopped.
There are many other cryptocurrencies with many use-cases. Etherium, for example, adds a layer of a Smart Contract on the blockchain so you can implement the technology in healthcare, industry, insurance and so on.
Ripple or XRP is made for fast international transfers between banks and there are many other examples.
Bitcoin is king though. It drives the industry and it is often compared to modern gold (even though it has many advantages):
Many companies understand the importance of the technology and are putting MASSIVE efforts into figuring things out and develop new tools and methods.
However, Bitcoin is still considered as early adoption. This is Bitcoin's market cap (picture from a few years ago says 41 billion, today it's already 120):
Bitcoin supply is VERY limited and soon we will get to 21 million Bitcoin, which is programmed to stop being produced\mined.
Many believe that when the really big money starts flowing into the industry, Bitcoin value will skyrocket from the 5-6-7K that it is being traded these days to 100K and some say even 1M USD for one Bitcoin.
We did have a big rally a few years ago where bitcoin went to $20,000 in price very fast then crashed but those prices were driven by a lot of speculation.
Today the fundamentals are very strong, so many people and companies are working on it... it's a big industry, smarter and more experienced.
Still, it is very dangerous and the price fluctuates so if you ever decide to invest, be sure to only invest what you will have no problem losing.
As far as buying goes, there are many exchanges that will allow you to buy (and sell) Bitcoin and other cryptocurrencies.
You can store your coins on those exchanges but I STRONGLY suggest getting a *cold* wallet. Basically a wallet provides you with a public and a private key. Think of a public key as your home address. You can share it with people and people can send you stuff to that address. A private key is like a key to your house. You don't share it with anyone and if no one has that key, no one can ever touch your coins.
I highly recommend the Ledger Nano S
In Israeli law Bitcoin is not considered a coin\money but an asset. This means that you can trade it but the profits you make are taxable. I believe the situation is similar in the States but please check for yourself.
Take a look at this video, I think it's a good place to start:www.youtube.com/watch?v=41JCpzvnn_0