Bitcoin eBook

We are living in an ever-changing world, socially, economically and monetary. How would the world look tomorrow, it is hard to say. We can only assume and hope for the better. The governments must stop controlling everything that moves in the world, but maybe this is only a utopia. However, the human conscience might finally wake up, and the Earth could be transformed into a new Eden.

The Role of Cryptocurrencies in the new world

It can be anything: Bitcoin, Litecoin or another instrument of freedom, but new internet currencies can also be transformed into an instrument of control. One way or the other, we will hear about the Bitcoin more and more. If we choose to bet on the Bitcoin today, we might gain immense satisfaction tomorrow, because building the future starts now!

Besides the characteristic of the Bitcoin as a method to save money and to gain more advantages, we must also observe that this currency is more and more accepted as a payment method. Universities, economists and major companies believe in Bitcoin, some of them talking about “the gold of the future.” You can pay Bitcoins for hosting, food, shoes and websites, and you can also play with it on the financial markets. Smart people already managed to make serious money from cryptocurrencies, just by speculating the course difference. On the other hand, the cryptocurrencies are still new on the market, so their evolution can’t be anticipated.

Why would we give you advice about trading cryptocurrencies and making money from it? We are a team of Bitcoin passionate miners and traders, fascinated about this new world that opens in front of us. We realize that the Bitcoin can only grow if people know what it is, how to trade it and how to use it. The goal of this ebook is to teach as many people as possible to trade cryptocurrencies, because the entire virtual world would benefit from them. We would like you to consider Digital Currency Newsletter as your main hub for the latest Cryptocurrencies news, but also for guides and resources about the financial world, which seems to be moving online. For good.

Chapter 1: The Financial Wonder Called Bitcoin

The Bitcoin can be considered as the first cryptocurrency, and the most important of them. If you understand how the Bitcoin works, you will understand the other virtual currencies, because they are based on the same main principles. This is why our first chapter is dedicated entirely to the Bitcoin (BTC).

1.1 What are the cryptocurrencies and how can we benefit from them?

image001 The Bitcoin grows like a character from fairytales, imposing new concepts and ideas in the financial world. It is currently used by many websites as a payment method, because it has several advantages compared with traditional currencies. The commissions are small, the privacy of the parts involved is protected, and the safety of payments is almost perfect.

Usually, when people talk about virtual currencies, they talk about Bitcoin. On the other hand, many other currencies have been developed on the internet after this one. Should we keep an eye on all of them? No. Many of those are simple experiments that would probably die in a few years. Only a few cryptocurrencies deserve the full attention of economists and financial specialists, and Litecoin is one of them.

We will try to focus on the Bitcoin and the Litecoin, because they are the most representative currently. This can change in any moment, but for now, you can learn everything that it is to be known about virtual currencies just by studying those two concepts. Sure, there are many aspects involved, and we can’t cover them all here, but you will know the basics of cryptocurrency trading when you finish reading this book.

It is practically impossible to anticipate every chart move, but this is a general truth for other currencies and trading instruments. Is there any perfect stock, or Forex traders on the market that are always right? No. However, there are people making money constantly from trading those assets, and you can be just as good in cryptocurrencies. The secret is to study and to be patient, and especially to read the basics of virtual currencies trading from this book.

1.2. How are Bitcoins created?

Our goal is to clarify the financial aspects behind Bitcoins, but this is impossible as long as you don’t understand the mechanisms behind it. Cryptocurrencies are a combination of IT and financials, and you can’t understand one side of it as long as you don’t know a few things about the other one.

We heard about Bitcoin for the first time at the end of 2008 in a Whitepaper, when Satoshi Nakamoto announced the intention of introducing a new virtual currency on the internet, with some unique characteristics. This happened a few days after registering the domain Bitcoin.org. On 3 January 2009, the first block was established, allowing the network to process information. At the same time, the Original Bitcoin Miner was made available for interested users. On 12 January, the first transaction was made from Satoshi to Hall Finley, on Block170.

Satoshi set an arbitrary value for the BTC, at $0.0000001. In 2010, the first significant bitcoin transaction was recorded, when the user Laszlo bought a pizza for 10 000 BTC.

image005 Bitcoins are created as we speak. They have been created since 2009, the year when the first computer started to mine bitcoins. What do we mean by “mining”? During the 18th century, Eldorado became one of the most important attractions of the world. People came here to find gold, and many of them got rich. A few decades later, gold was almost exhausted, so the difficulty of finding it increased.

The same principle applies for the Bitcoin, with the difference with mining Bitcoins is more precise. Modern mining is based on computers, and we can always anticipate how much Bitcoins we can make. Some regret that they didn’t know about the BTC in 2009, when it was possible to make tens of Bitcoins a day with a simple computer. Don’t despair! Even if you missed the first train, the history of Bitcoins is written as we speak, and from some points of view, it is even better to enter the cryptocurrency market today, when we know more about it.

“Mining” Bitcoins means to put a computer to work. The miners are the base of the Bitcoin economy, just like the workers in a factory. Whenever a transaction with Bitcoins is made, it is sent to the mining network for processing. The computers in the network would encrypt the respective transaction, connecting it with the rest of transactions made since that moment. The network created by those transactions is called a blockchain. A transaction made today is connected with one made yesterday, which is connected with an older one, and so on, until the original transaction.

This system gives security to the network. If somebody would want to falsify a Bitcoin, he or she would need a computational power greater than the one of all computers mining Bitcoins at a certain moment, which is practically impossible. Even if somebody would have that power, it would be better put in use for mining Bitcoins, not for stealing them.

Each computer that contributes to those calculations is rewarded for its efforts with new Bitcoins. The computational power required to create Bitcoins grows every day, after a pre-determined algorithm. No matter how many computers are mining at a certain moment, the number of generated bitcoins follows this algorithm. If we assume that one computer remains to mine in the entire world, this computer will receive all the rewards.

The reward for each computer mining at a certain moment is calculated considering a variable called difficulty. This indicator grows exponentially. Each new computer in the network would increase this difficulty, so it will be harder for all the computer to obtain new coins.

1.3. Facts and Numbers

The total number of Bitcoins that will be in circulation at a certain moment will be 21 million. In the first four years of the bitcoin history, more than half of those coins are already on the market, because the difficulty of creating Bitcoins was insignificant from 2009 to 2012. During those years, each confirmed block released 50 new bitcoins for the mining computers. In 2012, the value of a block was halved to 25 BTC. In 2010, it was possible to make 100 BTC every day with a simple computer. Later, passionate Bitcoiners discovered that GPU processors are a lot more effective in mining. In 2013, the first specialized mining computers appeared. Those were made by specialized companies, and they were called ASIC miners (based on the ASIC technology, which is used for other industries too).

The computational speed is measured in Hash/Second. This measures the total number of calculations made per second by a unit. In 2009, it was possible to make 100 BTC per day with a computational power of 10 Mhash/second. When the difficulty increased, miners realized that it was more profitable to mine in pools (teams). The reward was distributed amongst the miners in a pool according to their contribution. In 2013, 50 GHash/second was a decent speed allowing the miner to make 1 BTC PER MONTH!

As you can see, the difficulty grows exponentially. The miners consume a lot of electricity. This is why so many people renounced mining Bitcoins, scared by the huge electricity bills. In this scenario, why would somebody want to mine Bitcoins, as long as the costs are so high? We will have to analyze the financial aspect of Bitcoin to clarify this aspect.

1.4 The Financial Wonder: The fastest growing currency in the world

image001There is no other currency in the history that grew faster than the BTC. It started in January 2009 with a value of $0.00000001, and it reached $1000/1BTC in December 2013. Even if the difficulty is growing and it is a lot harder to create Bitcoins today, the increasing value of the Bitcoin is fascinating. Besides the possibility of buying items from the internet and from the real world with BTC, this currency is also suited for financial speculation. Any report can influence it in one direction or the other.

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Even if financial specialists analyze the BTC every day, it is hard to establish patterns, as it is possible in the case of dollars, gold or stocks. However, based on empiric observations, we can make some observations about the value of Bitcoin based on rumors and news:

Financial Crisis

Financial Crisis

The Bitcoin is sensitive to financial crisis. In April 2013, the Bitcoin was first named in major financial publications, when it was used to counter the Cyprus recession. The clients’ accounts were frozen, and all the internet and wire transactions were forbidden for a few weeks, so the only method for Cyprus citizens to exchange money on the internet remained the BTC. It was the time when the BTC reached $200 for the first time, just to fall back to $90 a few days later, when the crisis was over.

Bitcoin is a refuge whenever traditional currencies suffer. If a big country is about to announce problems in the financial system, you can be sure that the value of BTC will increase.

1.4.1. Governmental Decisions

Even if bitcoiners claim the total independence of BTC from governments, this currency is sensitive to the announcements made by important officials. When the Federal Reserve announced that the BTC is tolerated, the Bitcoin increased its value by 10% in a few days. When the Chinese government announced the same thing at the end of 2013, the BTC broke the barrier of $1000 for the first time. However, it was the same government that banned Bitcoins from trading a few days later, bringing the BTC value to $500$ within three days. Even so, the BTC started to climb the ladder once more, increasing to $800 by the end of the same year.

Governments can’t intervene directly in the evolution of prices, but they are strong traders, and with indirect measurements, they can bring the value up or down. A bigger country means a bigger influence. A smaller state announcing that it sustains the BTC would probably not affect the price so much, but the decisions of the US, UK, Chinese or Japanese authorities will surely make the difference.

1.4.2 Websites and the online world

A reputed financial analyst would probably expect for the value of BTC to increase whenever a new website accepts it as a payment method. In 2012, WordPress announced that they would accept Bitcoins as a payment method. The result was a 100% increase of Bitcoin’s value in a few days, but this is the only noticeable example. Since then, other major websites such as Piratebay and Zynga started to accept Bitcoins, but the results of those announcements on the charts were not spectacular.

There are no logical explanations for this behavior. In the real world, if Google announces that it is interested about the wood manufacturing industry, the price of wood will surely go up, at least for a while. The BTC is not so responsive to those announcements, and this is what makes it so fascinating.

Conclusion: the value of BTC will not increase spectacularly when a major company accepts it as a payment method, but you can be sure that it will not go down either. It is a good idea to go Long when a story of this kind appears on the internet.

While good news does not affect the BTC too much, the bad news does. When the FBI arrested the webmaster of Silkroad, a website that intermediated drug and weapons transactions for Bitcoins, the value of BTC went down with 10% in a single day. It went back up immediately, but this surely affected some investors.

1.4.3. Legal controversies

The BTC is not classified as foreign or electronic currency in the majority of countries. It is more like a financial instrument, which is not the subject of any regulation. The German government considers it as “private money”, used in different circles for clearing. It is the first step to denationalize money. The Bitcoin might represent a viable alternative for traditional currencies, but it has some disadvantages.

Even if the number of BTC transactions grows every day, it is still small compared with the majority of world’s currencies. If the BTC bothers the US Federal Reserve, they can surely influence the market greatly, and the other participants might not even realize this.

The Bitcoin is forbidden in Malaysia. Well, it is hard to control the transactions as long as those are anonymous, but by forbidding the access to five or ten important websites, it is possible to limit the access of users to cryptocurrencies. This is another important aspect that might affect the future of Bitcoin, and of other virtual currencies.

The success of Bitcoins depends on the right treatment of regulating authorities from the most important financial countries in the world. If those will consider the BTC only as an instrument for money laundry, this virtual currency will not have such a bright future.

The Security Commission of USA accused Trendon Shavers from USA of fraud, when he created some kind of a Ponzi scheme with Bitcoins. Shavers tried to base his defense on the fact that the BTC is not real currency. However, the judge decided that the BTC is a indeed a real currency. It is also “something” that belongs to people, so stealing Bitcoins is in fact…stealing. The case was solved by a local court, but it was a major breakthrough in the USA, as it somewhat confirmed the legitimacy of BTC in the United States, and it also gave Bitcoin some legal characterization.

Chapter 2: Other Cryptos

Bitcoin is only one of the numerous cryptocurrencies appeared since 2009. People that invented other currencies claim that they had the idea even before the appearance of BTC, but those affirmations can’t be sustained. The most important “rival” of the BTC is the Litecoin (LTC), a currency that is created with the same technique. However, it is easier to create those, and for this reason, some say that the LTC will be more successful in the far future.

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2.1. What is Litecoin?

The Litecoin is an alternative to the BTC. It has the same key features as the BTC, with some differences. There will be 84 million LTC in circulation when mining will be over, and the mining process is based on the processors of the computers, not on graphic cards or on ASIC miners. Litecoin is a MIT project, which gives it more legitimacy. On the other hand, the smaller computational power required to encrypt LTC transactions might also be the major setback of this currency, as it is supposed that those coins will not be as secure as the BTC.

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The Litecoin was created as an alternative and complementary currency for the BTC. It gives something else to do for the miners once the Bitcoin mining is over, as it is supposed that it will last longer to mine all the possible Litecoins.

2.2. The advantages of Litecoin

The Bitcoin paved the way for cryptocurrencies, bringing those to the attention of the entire world. However, it has many problems, and it can still be considered an experiment. It is known that the first version of a concept can be improved, and maybe Litecoins are better alternatives.

The BTC was successful as long as there was no competition on the market. The Litecoin can’t replace Bitcoin, but this is not the goal. On the contrary, a complementary currency might help the Bitcoin be stronger.

The Litecoin is faster. A new block is generated once every 2 minutes, compared with the 10 minutes required by the BTC system to release a new one.

The Litecoin can be more decentralized, because there will be many more of those on the market when mining is over.

The Litecoin brings stability on the market of cryptocurrencies. Imagine a world without any other currency besides the USD. The Cryptocurrency world having only the BTC is a world where several people have the entire power. Moreover, if something happens with the BTC world, the LTC will always remain as an alternative.

The Litecoin is not a “phantom” like the bitcoin. Satoshi Nakamoto invented the BTC, but any bitcoiner knows that this person does not exist, and that it is only a pseudonym for a group of people. The Litecoin is the project of Charlie Lee, an ex-Google employee that does not hide from the curious crowd. Therefore, if something happens with the LTC, we will have somebody to ask what is wrong.

Litecoin is a project hosted on Coinbase, a website that allows simple transactions. On this website, you don’t need to be an IT technician or a Bitcoin guru to trade. On the contrary, the website allows users to link their banking accounts and credit cards to the LTC and BTC wallets, making the world of cryptocurrencies easy for all.

2.3. Other cryptocurrencies

There are many other cryptocurrencies available, but those are more like experiments initiated by passionate Bitcoiners. This freedom is somewhat good, but it is not so great that anybody can just create a new currency. The market regulates by itself, so only the good projects will survive. A Cryptocurrency can be considered legitimate only when it is accepted as a payment method by some major websites and only if it is at least four years old.

Chapter 3: Trading Cryptocurrencies Like a Pro

Trading cryptocurrencies for a profit is not like Forex or Stock trading. If you find a website that promises you millions of dollars per month from a get-rich-quick scheme, be sure that it can’t be trusted. Trading Bitcoins can be just as rewarding as Forex or Binary Options, but only for the professionals that know how to do it. If you believe the “Make One Million Dollars with Bitcoins in One Month” Stories, then it is a better idea to spend your money in a casino, as you have more chances to earn some dollars there. The Bitcoin is highly volatile, so it can go up just as easy as it can go down. Taking advantage of recessions can bring you serious money, but once it is over, the charts usually reverse, and you must be prepared for the fallback.

Rumors and news have a great impact in the BTC world. The number of transactions also affects volatility, and the volumes are influenced by the certainties of traders. Even when the BTC grows, the investors might have their circumspections, and they will not trade unless they understand why this happens. On Digital Currency Newsletter, we will write only about what is important in the Cryptocurrency World, and about what really influences the charts.

3.1. The Wallet

3.1. The Wallet

If you have ever used a wallet for shopping (and you surely did), you should know that the Bitcoin and Litecoin wallets are the same thing. Just like in real life, you can have as many wallets as you can. The wallet allows you to pay and receive cryptocurrencies, in the base of an address. The address is the unique identifier of the wallet, and the only thing required to initiate and receive cryptocurrency payments. This is why you should make sure that it is safe, and that nobody else has access to those.

Bitcoins and Litecoins can be managed with many wallets, but the original ones are the best ones. We suggest Multibit for Bitcoins and the Litecoin.org wallet for Litecoins.

Multibit is easy to use and install. The wallet address is generated immediately after installing, and you can start trading right away.

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The Litecoin installer lasts a little longer, as it recreates the entire blockchain, until the origin of the tree. It will have some hundreds of weeks to process, so be patient. Sometimes, it lasts 2-3 hours before complete synchronization.

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3.1.1. Some kind of a Disclaimer

This trading guide will help you to trade better, but it will not make you an overnight millionaire. However, minimizing risks and maximizing profits is the base of solid trading.

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3.2. Basic concepts

If you know Forex and stock trading, this part will be a little boring, but for beginners, it is important to understand the concepts used and the definitions of terms used.

EMA – Exponential Moving Average – two lines, one above and one below the chart. The superior one is the estimated average, while the inferior one is the standard average. Those lines move one toward each other, and this is an important indicator in BTC trading.

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MACD – Moving Average Convergence-Divergence. This is the indicator that can be observed while the EMA lines move.

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Resistance – the line uniting two or three superior points of the chart. This states a minimum value that is less likely to be broken. If large transactions are made at those points, the upward trend will be slowed or even reversed.

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Support – the opposite of resistance, this shows the minimum values on the chart

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If you are interested about reading financial Bitcoin news and analysis, you should read more about those indices. The good news is that you can learn the basics from Forex or stock trading, as the principles are the same as the ones of trading Bitcoins

3.3. The Weapons of the Smart Trader

Read and Understand

You must read, understand, and read again before trading the first time. You need to do your homework, and this starts by being aware of the market. This means to bookmark the most important news websites, and the ones talking about the technical characteristics of the network. Indicators like difficulty, coins mined per day, volumes and block chains determine the price. A successful attack on the network is also another reason for which the value of the BTC can modify. Trade on virtual platforms for at least two months before actually buying Bitcoins for the first time.

Plan

When you are ready with the technical notions, you need to put those into practice. Making a plan is not so hard, while sticking to it is. We can all make great trading plans, but when the market does not behave as we anticipated, we tend to trade emotionally, and this usually leads to failures. If your plan includes the possibility of losing some money, you will not be so panicked when the charts goes in the opposite direction than the anticipated one.

Understand Volumes

No matter what your estimation is, you need to check the volumes. A market with low trading volumes means that people are in expectancy. Usually, there are not so many fluctuations on a market without volumes, and even if they are, those are the results of speculation. Without high volumes, it is practically impossible to make a profit.

However, high volumes are not necessarily a warranty for success, as this usually brings volatility also. Impatient traders looking to dump their coins, which are scared of possible governmental decisions, or hacking attacks might be the reason for high volumes. Therefore, before estimating a trend based on volumes, you should also check the news and rumors in the market. Always look for the live tickers and chats on trading websites, as many smart bitcoiners give good hints there!

Play Smart On Short Term Trading

The most used currency pairs are BTC/USD and LTC/USD, but also BTC/CNY. It is possible to trade BTC/LTC, but anticipating this pair is difficult. Short Term Trading usually refers to intra-day operations. If you want to speculate the instant news and rumors, intra-day trading is for you. In this case, taking advantage of the high volatility is your main goal.

Backup Your Money With Long Term Trading

Long term trading is a little simpler. Buying when the Bitcoin is down and selling on an ascending trend is possible. Well, you will probably be a little worried when the Bitcoin goes down a little, but if you have patience, you will observe that the general direction of the BTC is an ascending one.

Opening Positions

The chart history is the most determining characteristic that must be considered before entering long or short. For long term trading, the 1-3 months charts are important. If the EMA is divergent on an upward movement, it means that the market is highly volatile, and that the BTC will probably go down on the charts. This is not the best time to go long, so waiting is the best idea. During those periods, open shorter term positions, and speculate volatility. It is a little riskier, but the possible incomes are significant.

When you have a position opened, whether it is a short or a long one, you need to keep an eye on the charts. If you are an intra day trader, you might not even be able to go to the toilet, as the charts can change from one minute to the other. You should also have a news feeder about the BTC opened all the time, to be in touch with the market.

Using Charts

Reading charts is one of the hardest tasks for a trader on any asset, but especially on BTC. There are many fake signals in this market, and even if Forex experience is helpful, it is not enough. Some specialists even say that Forex and Bitcoins have nothing in common, but the general principles of trading are always the same, no matter what the asset is. You can determine trends, and with the help of trends, you will be able to anticipate the next movements.

Patterns are repetitive events on a chart. If you see a pattern three times in a row on a chart, it is likely for it to repeat soon. You need to determine what caused the pattern, when it appeared, and how long it lasts. Usually, those are created by news, so read about the Bitcoin events occurring with little time before the apparition of the pattern.

The easiest patterns on a BTC/USD chart is the one of double tops and double bottoms, but also by head and shoulders. They are indicators from trend reversals.

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The triangle is another popular pattern. The symmetrical one is usually a sign of trend reversal. The Ascending Triangle means that the trend will change its direction up; while the descending one means that the chart will go down. Usually, those patterns must be confirmed with other indicators such as the moving average or head and shoulders.

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The Cup and Handle is the friend of traders, as it is one of the strongest indicators in trend reversals. The cup is a sign of indecision, when traders mark their profits or when they are trading sideways, but the handle shows that the chart will go in the same upwards direction. As soon as it starts climbing again, you can think about opening a long position. For long term trading, this is one of the most important indicators.

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Charts to use

Any website allowing you to exchange BTC and LTC usually has charting, but some of those are not updated, and they are also deceiving. The major exchange websites usually have the best charts, and here are the most popular for cryptocurrencies:

The market indexes on those websites are the best methods to get an idea about what would happen on the market for the respective day. This way, you will be able to harmonize your orders with the market direction. It is a complex operation that supposes you to follow a few indicators at the same time, but it is the best way to anticipate the direction of the chart correctly.

Diversified Portfolio

When it comes to cryptocurrencies trading, diversifying is difficult. In the case of Forex and stocks, you have tens of choices at your disposal, but when it comes to virtual currencies, you must only rely on BTC and LTC. Sure, you can open BTC/USD, BTC/GBP and BTC/EUR positions, but those are only variations of the main pair. Diversification in BTC trading means to have more than one position opened on the same pair at the same time. The best combination is two long-term positions on BTC/USD and LTC/USD, and two other positions opened in the short term, for intra-day trading. The long-term positions are the perfect safety nets, in case your intra day trading is not that great.

You can try other cryptocurrencies as a variation, but keep in mind that those might not bring you the expected results. The liquidity on those markets is small, so even if you find the right moment to open a position, there might not be a counter party. Even so, opening a few long-term positions just to experiment with those currencies would not hurt.

3.4. Other Trading Ideas about the Bitcoin Market

The price of Bitcoin can halve in a single day, but it can also triple its value. This rarely happens, but it does. The Chinese intervention at the end of 2013 is a good example. The BTC went to a record of $1200, just to fall back to $600 a few days later. It was because of a decision of the unpredictable Chinese government. After backing up the BTC, they decided to forbid it a few days later. As 60% of the total number of the BTC transactions were made by Chinese Bitcoiners, those started to sell massively, at any cost. Even if the Bitcoin is a free currency, which is not regulated by any country, authorities can influence it. The decision only affected commercial transactions. People are still allowed to mine Bitcoins and to buy those, but it is at their own risk.

3.4.1. Saving

It is possible to make money from BTC in two ways. Besides trading, it is also possible to save. This is considered as a long-term strategy, and it always works. If we neglect the buzz periods such as the Chinese and Cyprus cases, we will see an exponential growth. Without rumors and governmental intervention, the Bitcoin will definitely grow exponentially. From some points of view, those periods in which the Bitcoin is highly volatile are good, because they allow us to understand this currency, and how it behaves in extreme conditions.

Bitcoin can be considered as a commodity. You can invest in it just as you invest in land or real estate. Just as any other long-term investments, it will suffer a lot on the way, just like the 2008 financial recession showed us. The value of a BTC was $0.00000001 in January 2009, and it reached $1200 at the end of 2013. From this point of view, it can be considered as the fastest value-growing asset in the world. By that time, only a few people believed in the chances of the Bitcoin. Now, there are many more currencies, and each one contributes to the growing phenomenon. Even the fact that people express interest about it makes it more valuable.

3.4.2 .Indirect course difference

The Bitcoin is traded anywhere in the world, with many other currencies. The exchanges courses are different, so a trader might speculate those. In December 2013, 5000 BTC were equivalent with 4.375 million dollars. By speculating the difference of course between USD/BTC and CNY (Chinese Yuan)/BTC, the trader could make 80 000 more. Those course differences involving three currencies are possible in the Forex world also, but the differences are a lot smaller, and the transfer commissions would cancel the profits anyway. From this point of view, the BTC is also a revolutionary asset.

3.4.3 Ecommerce

Selling products from Bitcoins is another way to make money. Even from this point of view, the BTC behaves unnaturally. This happens because Bitcoin users are divided into two main categories. Each one of those affects the prices in a different way.

Bitcoiners

The term is not in the English Dictionary, but it will be soon. The bitcoiners are passionate engineers, IT specialists, programmers and scriptwriters that are more interested about the technical and mathematical aspects of the BTC. The Bitcoiners would spend 1 BTC for a lousy t-shirt just because they can, and because they find it fun to initiate a transaction, and to see how it is integrated in the blockchain by miners. Those are the base of the Bitcoin world, and the people that know it best.

Traders

The second category of Bitcoin users are the traders. Those appeared in 2012-2013, and they are more interested about speculating and trading the BTC for its own value. The traders try to establish patterns, and to integrate Forex and trading techniques in this new type of trading. Those are not interested about having a huge electricity eater in their living room mining for bitcoins all night long, but more about charts and previsions. This category is useful because it designs the financial aspect of the bitcoin, but it is also dangerous because it affects the currency with financial speculations and artifices.

3.4.4 Trading Cryptos

Just like Forex trading, the cryptocurrencies have their gurus. A professional Forex trader has a lot in common with a successful Bitcoin speculator. With tens or even hundreds of digital currencies, it is possible to speculate all day long. Those currencies are more like experiments of Bitcoiners, but when a good trader finds them, it cripples them. This means that the trader gets away with huge profits, but the value of the respective coin halves.

The Bitcoin speculators say that there are boundaries. After crippling half of the cryptocurrencies in the world, they decided to be less greedy. It is better to let a currency grow a little, and to attack it with small “armies”. This way, the trader gets profits for the long term, and the cryptocurrencies world has a place to grow.

The secret is to buy in time, and to stay with your eyes on the charts. Almost any currency knew a massive intra-day growth at least once. A smart trader knows that a currency will increase its value eventually, after a long period of normal behavior. If the trader has some coins stashed away, he can sell. If the trader has a significant number of coins, he can sell those for a good profit, but the value of the respective currency compared with other ones will be affected.

Conclusion

Just like the world of online Forex trading raised some important questions when the first traders started to make money from it, the Bitcoin also comes with its controversies. The Bitcoin is even more interesting because of its unusual behavior and novelty. Estimations about the price of BTC compared with the US Dollar, with the British Pound or even with other currencies can be made, and those are usually good as long as the market is stable. Smart traders are able to speculate the unusual moves in the market, but the long-term traders can also gain benefits just by waiting. Is the future of Bitcoin 100% safe? We can’t say that, but we know that, as long as it will exist, it will become stronger. With the right resources at your disposal, it is possible to make serious money. We are a team of experienced Forex and Bitcoin traders, and our goal is to share our experience with people that are interested about it. People make serious money from Bitcoins as you read those lines, and after reading our paper, you are one step closer of being a part of this privileged world. The next one is to be a part of our network, and to have access to real information analyzed by professionals. For that, we would kindly ask you to join the Digital Currency Newsletter, your next best friend in online trading.