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Investing in Bitcoin can seem complicated, but it is much easier when you break it down into steps. You don't have to understand computer programming to realize that banks, businesses, the bold, and the brash are cashing in on cryptocurrencies. This guide will help you to get started, but always remember that Bitcoin investing carries a high degree of speculative risk.Investing in cryptocurrency in general is a good business if you are on the right path and with the right platform. After so many failed attempt on getting the right platform, I came across Libraforex Cryptocurrency Investment Platform (www.libraforex,io) where i get different percentages on every investment i made with cryptocurrency every 10 days. It looks too good to be true until i gave it a try and trust me it has been a smooth ride all the way. Don’t give up on cryptocurrency and join the platform. Trust me, you won’t care about the price fluctuation anymore. Thank me Later.PS: This is not in any case of me trying to lure you into anything for my own personal financial gain, i am just innocently sharing so that you could gain one or two things as this has been working for me. You can also make a research on what works for you too.KEY TAKEAWAYSThe value of Bitcoin is heavily dependent on the faith of investors, its integration into financial markets, public interest in using it, and its performance compared to other cryptocurrencies.Bitcoin investing still involves some technical and security issues that investors should be aware of before they begin.Investors who want to trade bitcoin need a place to store them—a digital wallet.They also need to buy bitcoin, which is usually achieved by connecting a wallet to a bank account, credit card, or debit card.Investors can join an exchange or online marketplace to trade traditional currencies, bitcoin, and other cryptocurrencies.Bitcoin BackgroundVolume 75%1:57What Is BitcoinIt may seem hard to believe that a digital currency could be worth thousands of dollars. Although the lines of code that make up each bitcoin are worthless in and of themselves, markets value each bitcoin at thousands of dollars. Bitcoin has value in part because it has transaction costs that are much lower than credit cards. Bitcoins are also scarce and become more difficult to obtain over time. The rate that bitcoins are produced cuts in half about every four years. This rate is expected to halve again sometime in 2020. The total number of bitcoins in circulation is gradually approaching the limit of 21 million set in 2009 by Bitcoin's creator, Satoshi Nakamoto.If the demand for bitcoins exceeds the rate at which it can be produced, the price will increase. As of Jan. 2020, 18.15 million, or 86.42%, of total bitcoins have already been created.1 This situation does not guarantee increasing prices. Cryptocurrencies are wildly unpredictable, even ones as popular as Bitcoin. Bitcoin was worth $19,116.98 on Dec. 17, 2017, but the price fell substantially and had yet to recover as of the beginning of 2020.2 The value of Bitcoin is heavily dependent on the faith of investors, its integration into financial markets, and public interest in using it. The performance of Bitcoin compared to other cryptocurrencies, such as Ethereum, is also crucial in determining its value.Bitcoin transactions are stored using a public record-keeping technology called blockchain. InvestopediaBitcoin operates on a decentralized public ledger technology called the blockchain. When consumers make purchases using the U.S. dollar, banks and credit card companies verify the accuracy of those transactions. Bitcoin performs this same function at a lower cost without these institutions using a system called hashing. When one person pays another using bitcoin, computers on the Bitcoin blockchain rush to check that the transaction is accurate. In order to add new transactions to the blockchain, a computer must solve a complex mathematical problem, called a hash. If a computer is the first to solve the hash, it permanently stores the transactions as a block on the blockchain.The rate that bitcoin can be produced cuts in half roughly every four years. InvestopediaWhen computers successfully add a block to the blockchain, they are rewarded with bitcoin. This process is known as bitcoin mining. Similar to winning the lottery, solving hashes is mostly a matter of chance. However, there are ways to increase your odds of winning in both contests. With bitcoin, arriving at the right answer before another miner has almost everything to do with how fast your computer can produce hashes. In the early years, bitcoin mining could be performed effectively using open-source software on standard desktop computers. Today, only special-purpose machines known as application-specific integrated circuit (ASIC) miners can mine bitcoin cost-effectively. Mining pools and companies now control most bitcoin mining activity.Before BeginningThere are several things that every aspiring Bitcoin investor needs. A digital wallet, personal identification documents, a secure connection to the Internet, a method of payment, and an account at a cryptocurrency exchange are the usual requirements. Valid methods of payment using this path include bank accounts, debit cards, and credit cards. It is also possible to get bitcoin at specialized ATMs and via P2P exchanges. However, be aware that bitcoin ATMs were increasingly requiring government-issued IDs in early 2020. There are additional details on buying bitcoin that we will not cover here.To buy bitcoin you need a digital wallet, personal identifying documents, a secure internet connection, a cryptocurrency exchange, and a form of payment. Getty ImagesPrivacy and security are important issues for Bitcoin investors. Even though there are no physical bitcoins, it is usually a bad idea to brag about large holdings. Anyone who gains the private key to a public address on the Bitcoin blockchain can authorize transactions. While it is obvious that the private key should be kept secret, criminals may attempt to steal private keys if they learn of large holdings. Be aware that anyone you make a transaction with can see the balance in the public address that you use. That makes it a good idea to keep significant investments at public addresses that are not directly connected to ones that are used for transactions.Contrary to popular belief, bitcoin is confidential but not anonymous. CoinbaseAnyone can view a history of transactions made on the blockchain, even you. But while transactions are publicly recorded on the blockchain, identifying user information is not. On the Bitcoin blockchain, only a user's public key appears next to a transaction—making transactions confidential but not anonymous.That is an important distinction. International researchers and the FBI have claimed that they can track transactions made on the Bitcoin blockchain to user's other online accounts, including their digital wallet. That's a direct result of anti-money laundering policies.3 This should not concern most investors because Bitcoin is legal in the U.S. and most other developed countries.Step One: Get a Bitcoin WalletThe first thing that you'll need to get started is a wallet to store bitcoin.Bitcoins are not physical coins, and they must be stored in digital wallets. Getty ImagesWhen it comes to choosing a bitcoin wallet, you have options. However, the Louis Vuitton and Gucci of the cryptocurrency world right now are "software" and "hardware" wallets. Software wallets are mobile applications that connect with your traditional bank account. These wallets allow for quick and easy access to bitcoin, but the drawback is they put your money in the hands of a third-party company.Although the leading software wallets are trustworthy, popular third-party companies have collapsed, or been hacked, in the past.4 5 Much like you wouldn't store thousands of dollars in your mattress, users with larger bitcoin holdings should consider storing their money more securely.Coinbase is the most popular software wallet available in the United States. In part, that is because it has a website, a mobile application, and stores 98% of customer currencies offline for added security. For beginners, Coinbase is the best and easiest place to start because it is connected directly to a bitcoin exchange, which simplifies the buying and selling process.There are also many other bitcoin wallets available. Blockchain.com - The Most Trusted Crypto Company is another top wallet connected to a bitcoin exchange. Mycelium is one of the most secure mobile wallets, but it can be a little harder to use. Blockchain Wallet is a popular mobile wallet, while Electrum is an excellent open-source choice for desktop users.Hardware wallets are a little more old-school but are generally considered to be more secure because they are kept offline. Trezor and Ledger are two of the leading hardware wallet manufacturers. These wallets store a user's private key on a physical hardware device similar to a flash drive, which prevents hackers from accessing a user's private key through an Internet connection.Step Two: Connect a Bank AccountIn order to purchase bitcoin, you need to connect your wallet to a bank account, debit card, or credit card. Although these payment methods all perform the same function—exchanging traditional currency for bitcoin—they each carry their own set of fees.By linking a bank account to your wallet, you can buy and sell bitcoin and deposit that money directly into your account. Getty ImagesTransactions made using a bank account can take four to five days to process on Coinbase, but are generally recommended for first-time investors.6 By linking a bank account to your wallet, you can buy and sell bitcoin and deposit that money directly into your account. Bank accounts are generally recommended if you are dealing with larger sums of money. At the time of writing, bank accounts let users spend as much as $25,000 per week.7Debit and credit cards, on the other hand, allow you to buy bitcoin almost instantly. The drawback is that on Coinbase and other popular exchanges, debit cards can only be used to purchase crypto—and even then, only in smaller amounts. Users cannot sell bitcoin or deposit money into their bank account when their wallet is connected to a debit card.6Step Three: Join a Bitcoin ExchangeBitcoin exchanges are online marketplaces where you can trade bitcoin for traditional currencies, say BTC for USD. Just like when you go to make a purchase online, you have options. There’s eBay, Amazon, Etsy, and Alibaba—to say nothing of the millions of private retailers who use these websites to sell their products. The same is true of buying bitcoin.Exchanges can vary in reputation, reliability, security, processing fees, exchange rates, and cryptocurrencies available for trading. CoinbaseEven when two exchanges trade the same cryptocurrencies, they usually offer slightly different services. Exchanges can vary in reputation, reliability, security, processing fees, exchange rates, and cryptocurrencies available for trading. Before settling down with an exchange, look around. Here are our top recommendations for where to start.While most exchanges offer wallets for their users, security is not their primary business. Except for Coinbase, we generally do not recommend using an exchange wallet for large or long-term cryptocurrency holdings.Best for Beginners: CoinbaseCoinbase is the most popular and respected digital currency exchange in the United States. Coinbase lets users securely buy and store cryptocurrency in one location. Coinbase charges a 1.49% fee for U.S. transactions from a bank account or Coinbase USD wallet. Purchases made using a credit or debit card are charged a 3.99% fee.8 Plus, Coinbase secures cash balances up to $250,000 in the event of theft or breach in online storage.9Best for On the Go: Square CashThe Square Cash app is a leader in peer-to-peer money transfers, right alongside PayPal's Venmo. The Cash app comes from Square, the company that makes those mobile credit card readers. Square is a huge financial technology company that includes many other services—one of which is trading bitcoin. Unlike most online exchanges, the Cash App stores your bitcoin in your Square Cash Account, rather than a separate digital wallet. If you're worried about security, however, you can send the bitcoin in your Square Cash Account to another wallet of your choosing. Square limits deposits to $10,000 per week, but there is no limit to what you can sell.10Best for Bitcoin on a Budget: RobinhoodRobinhood launched in 2013 as a fee-free stock brokerage. In Feb. 2018, the company expanded into the Bitcoin and Ethereum markets, along with market data for another 15 currencies, allowing users to trade cryptocurrency without a fee. As is the case with Square, Robinhood stores bitcoin in the same Robinhood account that is used for stocks. Robinhood is mobile-first and just recently added a web version, so it is best for people comfortable managing money from their phone or tablet.Best for Big Spenders: Coinbase Pro (Formerly GDAX)If you feel comfortable trading on Coinbase and want to step up your trading volume, you may be ready to switch from Coinbase to Coinbase Pro. Formerly known as Coinbase Global Digital Asset Exchange (GDAX), the trading platform uses interfaces similar to Bloomberg terminals and active stock, commodity, and option trading platforms. Coinbase Pro offers options to make market orders, limit orders, and stop orders in addition to traditional buying and selling. Coinbase Pro also allows users to trade between cryptocurrencies, say between Ethereum and Bitcoin. Coinbase Pro charges fees ranging from 0.04% to 0.50% based on your trading volume. Most people trade less than $10 million per month and will fall into the 0.20% tier. If you want to try Coinbase but with much higher volume, this platform is the way to go.11Best for Buying in Cash: Peer-to-PeerIf you have a wallet, but it isn't connected to a bank account, debit, or credit card, you can buy bitcoin using cash through a peer-to-peer exchange. Unlike typical bitcoin wallets, peer-to-peer exchanges work similarly to Craigslist for cryptocurrency. They allow buyers and sellers in the same areas to find each other and meet up to trade bitcoins for cash. With peer-to-peer exchanges, it's important to remember that you are trading high-value currency with strangers you have never met before. If you choose to exchange bitcoin in this way, we recommend that you meet buyers and sellers in a public place with high visibility.Step Four: Place Your OrderThis gif from cryptocurrency exchange Coinbase walks you through the buying process. CoinbaseYou’re now ready to buy bitcoin for the first time. It is crucial to keep in mind that although one bitcoin costs several thousand dollars, bitcoin can be divided up to eight decimal points. The smallest unit of bitcoin is known as a satoshi. Even if the price of bitcoin skyrockets, you'll still be able to buy a satoshi for a tiny fraction of a cent.

In 2016, the price of a bitcoin was $710.09. On February 21, 2019, the exchange rate for a single bitcoin was $3,890 and today, the exchange rate for a single bitcoin is $4,030. It doesn’t take an economics degree to know that the folks who invested in bitcoin a few years ago are now patting themselves on the back — but the good news is, it’s not too late to get in the game.Bitcoin. It’s one the biggest buzzwords in the financial technology industry right now, but also one of the least understood. With cryptocurrency back in the news again, now’s a better time than ever to delve into the weeds and learn more about how to invest. If you’re standing, sit down, because here’s a breakdown of everything you need to know before buying your first bitcoin — or deciding not to.Bitcoin Basics: Why People Buy CryptocurrencyYou don’t have to understand bitcoin to realize that banks, businesses, the bold, and the brash are cashing in on cryptocurrency. In 2016, the price of a bitcoin was $710.09. On February 21, 2019, the exchange rate for a single bitcoin was $3,890. It doesn’t take an economics degree to know that the folks who invested in bitcoin a few years ago are now patting themselves on the back — but the good news is, it’s not too late to get in the game.It may seem hard to believe that a digital currency could be worth thousands of dollars. After all, unlike physical currency like precious metals or printed money, bitcoin is just lines of code. So what makes bitcoin so valuable?The worth of currency used to be stipulated by precious metals. From 1879 until 1933, for example, Americans could trade the federal government $20.67 for an ounce of gold. For the United States, that all changed at the height of the Great Depression when America faced mounting unemployment rates and spiraling deflation. In 1933, President Franklin D. Roosevelt decided to cut the United States’ ties to gold, effectively allowing the Federal Reserve to pump more money into the economy than the federal government had the gold to back.The United States now has what is called a “fiat” money system, meaning the dollar’s value is determined by faith, rather than a physical asset. The dollar, for example, is worth far more than the value of the ink and paper that it’s printed on. Bitcoin functions by the same principles. Although the lines of code that make up each bitcoin are worthless in and of themselves, the international market has come to value each bitcoin at thousands of dollars. That’s because bitcoin is scarce and becomes more difficult to obtain over time. Here’s why:When the bitcoin program was launched on January 3, 2009, bitcoin was produced at a rate of 50 bitcoin every 10 minutes, or 7,200 bitcoin every day. As of February 2019, 7,200 bitcoin would be worth about $28 million, but at the time each bitcoin was worth just a few cents.According to the bitcoin program, however, the rate that bitcoin is produced cuts in half about every four years. On November 28, 2012, for example, the rate of production changed from 50 to 25 bitcoin every 10 minutes, or 3,600 bitcoin every day. That rate halved again on July 9, 2016 to 12.5 bitcoin every 10 minutes and is expected to halve a fourth time sometime in 2020. At this rate, the total number of bitcoins in circulation will approach a limit of 21 million.The rate at which bitcoin can be produced cuts in half every four years, meaning that the currency becomes more difficult to obtain over time. In fact, as of February 2019, 17.37 million, or 82.70%, of the total bitcoin have already been created. If the demand for bitcoin exceeds the rate at which it can be produced, the price will increase. That means investing in bitcoin now should be a sure fire bet to pay off four years down the road, right? Well, it’s complicated.If you’re anything like me, chances are your eyes glaze over at cautionary tales, words of wisdom, and long-winded explainers. That’s all fine and well for the real world, but when it comes to buying and selling cryptocurrency, the most valuable investment you can make is time. Cryptocurrencies are wildly unpredictable, even ones as popular as bitcoin. Although bitcoin is worth $3,890 today, it was also worth $19,783.21 on December 17, 2017.The value of bitcoin is heavily dependent on (a) the faith of investors, (b) the integration of cryptocurrency into current financial institutions, and (c) the public’s willingness to learn and use a new form of currency. Research is key when you’re investing in stocks, but it’s life-saving when you’re investing in cryptocurrency. That’s why we’ve taken the time to explain the technology behind bitcoin before showing you how to buy it. If you feel ready to leave the training wheels behind, you can skip to “Step One: Sign Up for a Bitcoin Wallet.”How Does Bitcoin Work?Bitcoin and other cryptocurrencies operate on a technology called “blockchain.” You may have heard of blockchain referred to as a “distributed, decentralized, public ledger,” but the technology is actually easier to understand than that definition sounds. At its most basic level, blockchain is literally a chain of blocks — only not in the traditional sense of those words. When we say the words “block” and “chain” in this context, we are actually talking about digital information (the “block”) stored in an online database (the “chain”). Here’s how it works.You have all these people, all over the world, who have bitcoin. According to a 2017 study by the Cambridge Centre for Alternative Finance, the number may be as many as 5.9 million. Let’s say one of those 5.9 million people wants to spend one or many of their Bitcoin. This is where blockchain comes in.With other public recorders of information, like the Securities Exchange Commission (SEC), Wikipedia, or your local library, there’s someone in charge of vetting new data entries. With blockchain, however, that job is left up to a network of computers. These networks often consist of thousands (or in the case of Bitcoin, about 5 million) computers spread across the globe. When you go to make a purchase using bitcoin, that network of computers rushes to check that your transaction happened in the way you said it did. They confirm the details of the purchase, including the transaction’s time, dollar amount, and participants.When consumers make purchases using the U.S. dollar, banks and credit card companies verify the accuracy of those transactions. Bitcoin performs this same function without these institutions using a system called “hashing.” When one person pays another for goods using bitcoin, computers on the bitcoin blockchain rush to check that your transaction is accurate. In order to add new transactions to the blockchain, a computer must solve a complex mathematical problem, called a “hash.”Solving a hash takes computers, and even supercomputers, an average of 10 minutes. During that time, computers also check the accuracy of new transactions on the bitcoin blockchain. If a computer is the first to solve a hash, they store newly-made transactions as a block on the blockchain, at which point they become unalterable.How is Bitcoin Created?When computers successfully add a block to the blockchain, they are rewarded with cryptocurrency. Earlier we discussed how the amount of bitcoin produced every 10 minutes cuts in half every four years. At the time of writing, computers receive 12.5 bitcoin, or approximately $48,625 USD, for each block that they add to the blockchain.If the tune of $48,625 sounds enticing, be warned that the process of adding blocks to the blockchain, what the cryptocurrency world calls “mining,” is not easy. In fact, the odds of solving one of these problems on the Bitcoin network are about one in seven trillion (12 zeros). To put that number in perspective, the odds of winning the jackpot lottery are one in 13 million. To solve complex math problems at those odds, computers must run programs that cost them significant amounts of power, energy, and money.Similar to winning the lottery, solving hashes essentially comes down to chance — but there are ways to increase your odds of winning in both contests. With bitcoin, arriving at the right answer before another miner has almost everything to do with how fast your computer can produce hashes. Just a decade ago, bitcoin mining could be performed competitively on normal desktop computers.Over time, however, miners realized that graphics cards commonly used for video games were more effective at mining than desktops and graphics processing units (GPU) came to dominate the game. In 2013, bitcoin miners began to use computers designed specifically for mining cryptocurrency as efficiently as possible, called Application-Specific Integrated Circuits (ASIC). These can run from $500 to the tens of thousands.Today, bitcoin mining is so competitive that it can only be done profitably with the most up-to-date ASICs. When using desktop computers, GPUs, or older models of ASICs, the cost of energy consumption actually exceeds the revenue generated. Even with the newest unit at your disposal, one computer is rarely enough to compete with what miners call "mining pools."A mining pool is a group of miners who combine their computing power and split the mined bitcoin between participants. A disproportionately large number of blocks are mined by pools rather than by individual miners. In July 2017, mining pools and companies represented roughly 80% to 90% of the computing power on the bitcoin network.In the real world, the power from the millions of computers mining on the bitcoin network is close to what Denmark consumes annually. All of that energy costs money and according to a recent study from research company Elite Fixtures, the cost of mining a single bitcoin varies drastically by location, from just $531 to a staggering $26,170. Based on average utility costs in the United States, that figure is closer to $4,758.What Do I Need to Buy Bitcoin?1. Digital Wallet: In order to conduct transactions on the bitcoin network, participants need to run a program called a “wallet.” Bitcoin are not technically “coins,” so it only seems right that a bitcoin wallet would not actually be a wallet. Instead of leather, wallets are made up of two unique and distinct cryptographic keys: a public key and a private key. The public key is the location where transactions are deposited to and withdrawn from. This is also the key that appears on the blockchain ledger as a user’s digital signature, not unlike a username on a social media newsfeed. The private key is the password required to buy, sell, and trade the bitcoin in a wallet.2. Personal Documents: The U.S. Securities and Exchange Commission requires users to verify their identities when registering for digital wallets as part of its Anti-Money Laundering Policy. In order to buy and sell bitcoin, you will need to verify your identity using several personal documents including your driver’s license and social security number.3. Secure Internet Connection: If you choose to trade bitcoin online, use discretion about when and where you access your digital wallet. Trading bitcoin on an insecure or public wifi network is not recommended and may make you more susceptible to attacks from hackers.4. Bank Account, Debit Card, or Credit Card: When you exchange USD or another currency for bitcoin, you will need funds to make those transactions. Bitcoin wallets can connect directly to your bank account, debit card, or credit card.5. Bitcoin Exchange: After you’ve set up your wallet with a payment method, you'll need a place to actually buy bitcoin. Users can buy bitcoin and other cryptocurrencies from online marketplaces called “exchanges,” similar to the platforms that traders use to buy stock. Exchanges connect you directly to the bitcoin marketplace, where you can exchange traditional currencies for bitcoin.Before You Buy: Is Bitcoin Anonymous?Anyone can view a history of transactions made on the blockchain, even you. But while transactions are publicly recorded on the blockchain, identifying user information is not. When reviewing the transaction history of your bank account, for example, you’ll notice that the names of vendors are included on your bank statement. On the bitcoin blockchain, however, only a user’s public key appears next to a transaction — making transactions confidential but not anonymous.This is an important distinction. International researchers and the Federal Bureau of Investigation have claimed time and again that they can track transactions made on the blockchain to user’s other online accounts, including their digital wallet. That’s a direct result of that Anti-Money Laundering Policy we mentioned earlier.Step One: Sign Up for a Bitcoin WalletIf you’ve made it through the winding road of explanations leading up to this point, congratulations! You may very well be ready to buy your first (fraction of a) bitcoin. The last thing you’ll need before you’re out the door is a place to store them.When it comes to choosing a bitcoin wallet, you have options, but the Louis Vuitton and Gucci of the cryptocurrency world right now are “software” and “hardware” wallets. Software wallets are mobile applications that connect with your traditional bank account. These wallets allow for quick and easy access to bitcoin, but the drawback is they put your money in the hands of a third-party company. Although the leading software wallets are trustworthy, popular third-party companies have collapsed, or been hacked, in the past. Much like you wouldn’t store thousands of dollars in your mattress, users with larger sums of bitcoin should consider storing their money more securely.Coinbase is the most popular software wallet available in the United States, in part because it has a website, mobile application, and stores 98 percent of customer currencies offline for added security. For beginners, Coinbase is the best and easiest place to start because it is connected directly to a bitcoin exchange, which simplifies the buying and selling process. Blockchain Explorer | BTC | ETH | BCH is another popular wallet connected to the bitcoin exchange, but the wallet is not supported by a mobile application. Users can also download mobile-only wallets such as Bitcoin Wallet for Android or Blockchain Bitcoin Wallet for iOS.Hardware wallets are a little more old-school but tend to be considered more secure because they are kept offline. These wallets store a user’s private key on a physical hardware device similar to a flash drive, which prevents hackers from accessing a user’s private key through an internet connection.Step Two: Connect a Bank AccountIn order to purchase bitcoin, you need to connect your wallet to a bank account, debit card, or credit card. Although these payment methods all perform the same function — exchanging traditional currency for bitcoin — they each carry their own set of fees.Transactions made using a bank account can take 4-5 days to process on Coinbase, but are generally recommended for first-time investors. By linking a bank account to your wallet, you can buy and sell bitcoin and deposit that money directly into your account. Bank accounts are generally recommended if you are dealing with larger sums of money. At the time of writing, bank accounts allow users to spend as much as $11,250 per week.Debit and credit cards, on the other hand, allow you to buy bitcoin almost instantly. The drawback is that on Coinbase and other popular exchanges, debit cards can only be used to purchase crypto — and even then, only in smaller amounts. Users cannot sell bitcoin or deposit money into their bank account when their wallet is connected to a debit card.Step Three: Choose a Bitcoin ExchangeBitcoin exchanges are online marketplaces where you can trade bitcoin for traditional currencies, say BTC for USD. Just like when you go to make a purchase online, you have options. There’s eBay, Amazon, Etsy, and Alibaba — to say nothing of the millions of private retailers who use these websites to sell their product. The same is true of buying bitcoin. Even if two exchanges trade the same cryptocurrency, it is likely that they each offer slightly different services. Exchanges can vary in reputation, reliability, security, processing fees, exchange rates, and cryptocurrencies available for trading. Before settling down with an exchange, date around. Here are our top five recommendations for where to start.Best for Beginners: CoinbaseCoinbase is the most popular and respected digital currency exchange in the United States. Although Coinbase only trades in five cryptocurrencies — Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ethereum Classic — the exchange offers a way to securely buy and store cryptocurrency in one location. Coinbase charges a one percent fee for U.S. transactions from a bank account or Coinbase USD wallet. Purchases made using a credit or debit card are charged a 2.49 percent fee. Plus, Coinbase secures cash balances up to $250,000 in the event of theft or breach in online storage.Best for On the Go: Square CashThe Square Cash app is a leader in peer-to-peer money transfers, right alongside PayPal-owned Venmo. The Cash app comes from Square, the company that makes those mobile credit card readers. Square is a huge financial technology company that includes many other services — one of which is trading bitcoin. The Cash App allows users to buy and sell bitcoin without processing fees. Unlike most online exchanges, the Cash App stores your bitcoin in your Square Cash Account, rather than a separate digital wallet. If you’re worried about security, however, you can send the bitcoin in your Square Cash Account to another wallet of your choosing. Square limits purchases at $10,000 per week, but there is no limit to what you can sell.Best for Bitcoin on a Budget: RobinhoodRobinhood launched in 2013 as a fee-free stock brokerage. In February 2018, the company expanded into the bitcoin and ethereum markets, along with market data for another 15 currencies, allowing users to trade cryptocurrency without a fee. As is the case with Square, Robinhood stores bitcoin in the same Robinhood account that is used for stocks. Robinhood is mobile first and just recently added a Web version, so it is best for people comfortable managing money from their phone or tablet. The drawback of trading bitcoin on Robinhood is that the application is only available in 17 states, as of February 2019.Best for Big Spenders: Coinbase Pro (Formerly GDAX)If you feel comfortable trading on Coinbase and want to step up your trading volume, you may be ready to switch from Coinbase to Coinbase Pro. Formerly known as Coinbase Global Digital Asset Exchange (GDAX), the trading platform uses interfaces similar to Bloomberg terminals and active stock, commodity, and option trading platforms. Coinbase Pro offers options to make market orders, limit orders, and stop orders in addition to traditional buying and selling. Instead of trading exclusively from USD to cryptocurrency, Coinbase Pro allows users to trade between cryptocurrencies, say between Ethereum and Bitcoin. Coinbase Pro charges fees ranging from 0.10 percent to 0.30 percent based on your trading volume. Most people trade less than $10 million per month and will fall into the 0.30 percent tier. If you want to try Coinbase but with much higher volume, this platform is the way to go.Best for Branching Out: BinanceBinance may be your best bet if you’re looking to diversify your cryptocurrency portfolio. The online exchange supports multiple currencies and even more digital currencies, including Bitcoin, Ethereum, Ethereum Classic, Litecoin, Ripple, Bitcoin Cash, and many fledgling cryptocurrencies you may not have heard of. Many exchanges that trade this many cryptocurrencies charge higher fees, but Binance charges a flat rate of 0.1 percent for trades. While this is platform offers a huge range of currencies at a low cost, there are some bugs reported with the Android mobile app and some users have reported delays withdrawing certain currencies.Best for Buying in Cash: Peer-to-PeerIf you have a wallet, but it isn’t connected to a bank account, debit, or credit card, you can buy bitcoin using cash through a peer-to-peer exchange. Unlike typical bitcoin wallets, peer-to-peer exchanges work similarly to Craigslist for cryptocurrency, allowing buyers and sellers in the same areas find each other and meet up to trade bitcoins for cash. With peer-to-peer exchanges, it’s important to remember that you are trading high-value currency with strangers you have never met before. If you choose to trade bitcoin in this way, we recommend that you meet buyers and sellers in a public place with high visibility.Best PracticesYour bitcoin exchange and bitcoin wallet do not need to be the same. While most exchanges offer wallets for their users, security is not their primary business. If you do choose to use a wallet offered by an exchange other than Coinbase, we do not recommend that you use that exchange's wallet to store bitcoins in large amounts or for long periods of time. Instead, make your transaction and transfer your bitcoin to a more secure wallet.Step Four: Place Your OrderOne exchange, three steps, and four thousand words later, you’re now ready to buy your first bitcoin. It’s important to keep in mind that although one bitcoin costs several thousand dollars, bitcoin can be divided up to eight decimal points. That means you can buy 1 bitcoin for $3,890, 0.1 bitcoin for $389, or even 0.00000001 bitcoin for $.0000389 if it suits your budget.Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns no cryptocurrencies.is another popular wallet connected to the bitcoin exchange, but the wallet is not supported by a mobile application. Users can also download mobile-only wallets such as Bitcoin Wallet for Android or Blockchain Bitcoin Wallet for iOS.Hardware wallets are a little more old-school but tend to be considered more secure because they are kept offline. These wallets store a user’s private key on a physical hardware device similar to a flash drive, which prevents hackers from accessing a user’s private key through an internet connection.Step Two: Connect a Bank AccountIn order to purchase bitcoin, you need to connect your wallet to a bank account, debit card, or credit card. Although these payment methods all perform the same function — exchanging traditional currency for bitcoin — they each carry their own set of fees.Transactions made using a bank account can take 4-5 days to process on Coinbase, but are generally recommended for first-time investors. By linking a bank account to your wallet, you can buy and sell bitcoin and deposit that money directly into your account. Bank accounts are generally recommended if you are dealing with larger sums of money. At the time of writing, bank accounts allow users to spend as much as $11,250 per week.Debit and credit cards, on the other hand, allow you to buy bitcoin almost instantly. The drawback is that on Coinbase and other popular exchanges, debit cards can only be used to purchase crypto — and even then, only in smaller amounts. Users cannot sell bitcoin or deposit money into their bank account when their wallet is connected to a debit card.Step Three: Choose a Bitcoin ExchangeBitcoin exchanges are online marketplaces where you can trade bitcoin for traditional currencies, say BTC for USD. Just like when you go to make a purchase online, you have options. There’s eBay, Amazon, Etsy, and Alibaba — to say nothing of the millions of private retailers who use these websites to sell their product. The same is true of buying bitcoin. Even if two exchanges trade the same cryptocurrency, it is likely that they each offer slightly different services. Exchanges can vary in reputation, reliability, security, processing fees, exchange rates, and cryptocurrencies available for trading. Before settling down with an exchange, date around. Here are our top five recommendations for where to start.Best for Beginners: CoinbaseCoinbase is the most popular and respected digital currency exchange in the United States. Although Coinbase only trades in five cryptocurrencies — Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ethereum Classic — the exchange offers a way to securely buy and store cryptocurrency in one location. Coinbase charges a one percent fee for U.S. transactions from a bank account or Coinbase USD wallet. Purchases made using a credit or debit card are charged a 2.49 percent fee. Plus, Coinbase secures cash balances up to $250,000 in the event of theft or breach in online storage.Best for On the Go: Square CashThe Square Cash app is a leader in peer-to-peer money transfers, right alongside PayPal-owned Venmo. The Cash app comes from Square, the company that makes those mobile credit card readers. Square is a huge financial technology company that includes many other services — one of which is trading bitcoin. The Cash App allows users to buy and sell bitcoin without processing fees. Unlike most online exchanges, the Cash App stores your bitcoin in your Square Cash Account, rather than a separate digital wallet. If you’re worried about security, however, you can send the bitcoin in your Square Cash Account to another wallet of your choosing. Square limits purchases at $10,000 per week, but there is no limit to what you can sell.Best for Bitcoin on a Budget: RobinhoodRobinhood launched in 2013 as a fee-free stock brokerage. In February 2018, the company expanded into the bitcoin and ethereum markets, along with market data for another 15 currencies, allowing users to trade cryptocurrency without a fee. As is the case with Square, Robinhood stores bitcoin in the same Robinhood account that is used for stocks. Robinhood is mobile first and just recently added a Web version, so it is best for people comfortable managing money from their phone or tablet. The drawback of trading bitcoin on Robinhood is that the application is only available in 17 states, as of February 2019.Best for Big Spenders: Coinbase Pro (Formerly GDAX)If you feel comfortable trading on Coinbase and want to step up your trading volume, you may be ready to switch from Coinbase to Coinbase Pro. Formerly known as Coinbase Global Digital Asset Exchange (GDAX), the trading platform uses interfaces similar to Bloomberg terminals and active stock, commodity, and option trading platforms. Coinbase Pro offers options to make market orders, limit orders, and stop orders in addition to traditional buying and selling. Instead of trading exclusively from USD to cryptocurrency, Coinbase Pro allows users to trade between cryptocurrencies, say between Ethereum and Bitcoin. Coinbase Pro charges fees ranging from 0.10 percent to 0.30 percent based on your trading volume. Most people trade less than $10 million per month and will fall into the 0.30 percent tier. If you want to try Coinbase but with much higher volume, this platform is the way to go.Best for Branching Out: BinanceBinance may be your best bet if you’re looking to diversify your cryptocurrency portfolio. The online exchange supports multiple currencies and even more digital currencies, including Bitcoin, Ethereum, Ethereum Classic, Litecoin, Ripple, Bitcoin Cash, and many fledgling cryptocurrencies you may not have heard of. Many exchanges that trade this many cryptocurrencies charge higher fees, but Binance charges a flat rate of 0.1 percent for trades. While this is platform offers a huge range of currencies at a low cost, there are some bugs reported with the Android mobile app and some users have reported delays withdrawing certain currencies.Best for Buying in Cash: Peer-to-PeerIf you have a wallet, but it isn’t connected to a bank account, debit, or credit card, you can buy bitcoin using cash through a peer-to-peer exchange. Unlike typical bitcoin wallets, peer-to-peer exchanges work similarly to Craigslist for cryptocurrency, allowing buyers and sellers in the same areas find each other and meet up to trade bitcoins for cash. With peer-to-peer exchanges, it’s important to remember that you are trading high-value currency with strangers you have never met before. If you choose to trade bitcoin in this way, we recommend that you meet buyers and sellers in a public place with high visibility.Best PracticesYour bitcoin exchange and bitcoin wallet do not need to be the same. While most exchanges offer wallets for their users, security is not their primary business. If you do choose to use a wallet offered by an exchange other than Coinbase, we do not recommend that you use that exchange's wallet to store bitcoins in large amounts or for long periods of time. Instead, make your transaction and transfer your bitcoin to a more secure wallet.Step Four: Place Your OrderOne exchange, three steps, and four thousand words later, you’re now ready to buy your first bitcoin. It’s important to keep in mind that although one bitcoin costs several thousand dollars, bitcoin can be divided up to eight decimal points. That means you can buy 1 bitcoin for $3,890, 0.1 bitcoin for $389, or even 0.00000001 bitcoin for $.0000389 if it suits your budget.A Crypto Technology company doubles investments for the investors. Investors makes 100% profit incomes at www.grandcrypto.tech within 7 days of investment and withdraw 100% incomes on the 7th day. And they are secured, reliable with no risk from them.Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns no cryptocurrencies.

PrologueFirst, let me start off by saying that I agree with Benedict Evans that 5G as a technology isn’t all that earth-shattering. It’s really just a continuation of a well-established trend: fatter and fatter data pipes. Imagine being able to take your home Wi-Fi everywhere and that pretty much describes 5G.Getting excited about 5G, or talking about amazing new applications it enables, is pretty much like getting excited about a new version of DSL or DOCSIS.— Benedict Evans (@benedictevans) March 14, 2018This is not to say that 5G is not important, or diminish the work done by hundreds of thousands of engineers, scientists and other wireless industry professionals around the world … or that it won’t catalyze the development of a host of cool new applications bearing all of the latest buzzwords and acronyms.It’s just more that I find the underlying economic and geopolitical story far more interesting and meaningful. Sort of like the 2006 film Babel starring Brad Pitt, it is a multiple-storyline epic featuring two main protagonists that lead completely separate lives for the first four acts while gradually converging … until the climactic moment when their paths smash into each other.As the curtains open on Act V, we find the two protagonists having finally taken the stage at the same time. And while we can make some guesses as to how things unfold from here, the reality is that the story is still being written.The implications are enormous and bigger than the wireless industry itself. Indeed, this is perhaps the most important area to pay attention to in today’s increasingly tech-driven geopolitical arena.But we are getting ahead of ourselves; to fully appreciate the saga we need to start at the very beginning … where we find ourselves on a deserted Hamptons beach at the break of dawn, sometime in the mid-80s …Act I“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way — in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”Opening paragraph to A Tale of Two Cities by Charles DickensI remember the iconic scene[1] in 1987 film Wall Street when Gordon Gekko officially brings Bud Fox, an ambitious young broker, “inside” the curtain. It is a critical scene in the movie, made even more dramatic by use of what was then a novel piece of modern technology — the cellular phone. Gekko delivers the coup de grâce to the young broker by expounding — in real-time on that phone — on the beauty and awe of the sunrise from his beachfront palace as a metaphor for a new world of hitherto unimaginable wealth that he was about to enter.The first cellular phones were analog radio devices that would connect to a local tower that oversaw a fixed area, or “cell”, on a dedicated frequency. The radio-frequency (RF) technology was pretty much the same as that powering walkie-talkies — the trick there was figuring out how to connect the walkie-talkie to the circuit-switched phone network.Call capacity was limited because there are only so many slices of frequency into which you could divide spectrum before you run into quality issues. As a result, early cellphones and their related service plans were extremely expensive and generally limited to wealthy moguls like the fictional Gordon Gekko.But while Gekko extolled the “virtues” of unmitigated greed, scientists and engineers were working on the next generation of wireless standards, and trying to solve the fundamental problem of how to cram more channels into the same allotment of limited spectrum. It is essentially the same problem that they continue to try to improve on today.At the time, there were two competing methods on how to do this. The first was something called time-division multiple access (TDMA)[2]. With TDMA, you could have multiple users share the same frequency by dividing the signal into fixed time slots that were assigned to each active user.The second method was code-division multiple access (CDMA).As with TDMA, the goal of CDMA was to permit multiple users from sharing the same slice of frequency but instead of having fixed, assigned time slots to differentiate between users, CDMA used unique codes to identify each user (hence the name). These codes could switch and hop across multiple channels, making it more flexible than TDMA.From a technology perspective, CDMA was better because it was more scalable especially as the world became more digital and less analog over time. But as we saw in the battle between VHS and Betamax[3], sometimes it is not just about technological superiority.Act IIThe race was on between the two competing standards.Western European countries latched onto the TDMA method and a generally open, collaborative approach, releasing Global System for Mobile Communications (GSM)[4] in 1991.The world’s first GSM call was made by Finnish Prime Minister Harri Holkeri on July 1st, 1991 and commercially deployed at the end of the year on a network built by German conglomerate Siemens and a then-relatively unknown conglomerate subsidiary called Telenokia. It would later drop the prefix, adopt the name of its conglomerate parent and become widely known simply as “Nokia”.Helsinki, Finland (Photo: Paasitorni)The competing CDMA method was not entirely novel — it had been pioneered as early as the 1930s by scientists from the Soviet Union. Interestingly, wireless phones based on the CDMA method were used in Moscow as early as 1963. However, it wasn’t until a former electrical engineering professor from MIT named Irwin Jacobs latched onto the technology that it found mainstream, commercial applications.In 1985, Jacobs launched Qualcomm — which stood for “Quality Communications” — based in the Southern California paradise of San Diego. The new company was initially focused on mobile satellite communications and because satellite bandwidth was so expensive and precious, there was an intense focus on bandwidth efficiency, which is what had led Jacobs to CDMA.The company went public in September 1991, raising $68 million to fund its CDMA research and later an additional $486 million to help commercialize a CDMA-based ecosystem. Qualcomm was perhaps the highest flier in the high-flyin’ 90s, ending the decade with its stock price increasing around 180x from its IPO price eight years earlier.Knowing nothing else but Qualcomm’s stock chart in the 1990s, one could have reasonably concluded that CDMA and its superior technology had won.But that was not to be, at least here in Act II.One issue for Qualcomm and its CDMA-based “cdmaOne” standard was that GSM had gotten a big head start.The “cdmaOne” standard was not adopted as a standard until 1995[5] at which point GSM networks in Western Europe and the United States had already reached 10 million active subscribers. By the time cdmaOne networks were deployed at scale, GSM networks had already reached over 100 million active subscribers.The other issue is that for voice, the technical advantages of CDMA were not that significant. TDMA did a fine job of transmitting voice and capacity constraints could be alleviated by adding additional wireless radios or reducing the size of each cell, especially if those radios could be purchased at affordable rates.Taking a more open, collaborative approach, GSM had also incorporated certain features such as a standard ID schema that allowed cellphones to be used across multiple networks by simply switching out the SIM card — which was much more important in Europe with its multiple country networks vs. the United States where people tended to travel internationally far less frequently.Ultimately, GSM won decisively by achieving scale and driving down cost. Because GSM networks were first to market, equipment manufacturers were able to deploy networks more quickly and inexpensively. Because GSM operators reached scale, handset manufacturers designed handsets around GSM standards. Because GSM was developed with a more open, collaborative approach, its technology licensing fees were lower. And because costs were lower, active subscribers tended to go with GSM networks vs. cdmaOne when given a choice.In September 2001, shortly after 9/11[6], I moved out to Hong Kong, which had deployed a GSM network.I was amazed at how much cheaper and better my cellphone service was compared to the United States. It was incredibly convenient to be able to simply switch out a small SIM card and start using your phone on another network. I loved my Nokia 8310 handset[7]. And I still distinctly remember how one annoying thing about work trips to South Korea — one of the few markets that had chosen CDMA over GSM — was having to use a clunky loaner Sanyo handset that didn’t have my address book or Snake[8].My Nokia 8310 handset (circa December 2003)GSM and Nokia had won the 2G war. CDMA-based technology was expensive and clunky and few people wanted it. By the early 2000s, Nokia was a giant, one of the world’s most valuable companies, at one point accounting for 21% of Finland’s exports and 70% of the Helsinki stock exchange market capitalization.But we were really just getting warmed up.Act IIILong before Apple unlocked “Smartphones” on the Technology Research Tree in 2007[9], wireless industry executives had suspected that data and not voice was going to be the long-term future of wireless. Fresh off the release of GSM in 1991, the various industry groups that set wireless standards had already begun trying to figure out how to transmit data at high speeds over the airwaves.Most had already known that GSM’s TDMA approach — perfectly adequate for voice communications — was just not going to cut it for data. While data could be transmitted over GSM networks, the transmission rate was capped at speeds reminiscent of the early days of dial-up modems. As nostalgic as I was for the halcyon days of the mid–90s, it was just not practical for anything outside of short-form messaging (i.e. SMS/texting).As wireless industry executives tried to find solutions for this technical issue, every path seemed to lead back to San Diego.San Diego, California (Photo: PV Magazine)It’s not enough to just have a good idea — you need to execute.While wireless operators worked 24/7 to deploy mostly GSM mobile networks around the world in response to the surge in active subscriber growth, Qualcomm was busy executing … and betting its future on CDMA. It too worked round-the-clock — frankly, an amazing accomplishment considering San Diego’s gorgeous year-round weather — to solve fundamental issues related to implementing wireless networks using the CDMA approach.Its main approach was to patent specific methods on how to perform various functions that were important in enabling wireless communication. For example, US Patent No. 5,280,472[10], issued on January 18, 1994, called for a “CDMA communication system in which cellular techniques are utilized in a distributed antenna system environment”. This particular one would cover instances where wireless signals need to be split up and re-routed and amplified within large buildings that remote tower-generated wireless signals would have difficulty penetrating.This was just one of an estimated 16,000 patents filed by Qualcomm over the years[11], of which at least 6,000 are related to wireless. In addition to building its IP portfolio, Qualcomm took a lead role in fostering eco-system development, including at various points producing handsets, network equipment and designing RF chips and chipsets.Photo: Gizmodo: Qualcomm's Amazing Wall of PatentsAs various 3G standards — represented by confusing acronyms like UMTS, W-CDMA, TD-SCDMA, CDMA2000 — emerged and were implemented, it became abundantly clear that CDMA was the common technology tying all of them together. With such a large patent portfolio around this method, it also became clear that Qualcomm was going to be collecting a recurring, steadily increasing stream of royalty payments for the foreseeable future.As 4G standards (LTE) rolled around in the mid- to late-2000s, cementing data as the key focus of the wireless industry, Qualcomm emerged as the dominant toll collector in one of the largest and most strategic industries on the planet.Act IV — Part I:For most of the first three acts, China is a mere after-thought, a minor character that is largely relegated to watching the main action from backstage:While Gordon Gekko was recruiting Bud Fox into his insider trading cabal, China was figuring out how to motivate its farmers to really put their backs into it so the nation could avoid teetering so close to the edge of starvation.While Nokia was busy deploying early GSM networks in Western Europe, China was figuring out how to dismantle its centrally planned industry without uprooting the lives of urban workers to the point where they would pour out into the streets by the millions like they did that fateful spring of 1989.While Qualcomm’s scientists were patenting thousands of wireless patents, China was figuring out how to open its doors so it could actually start trading the things that it had in abundance — e.g. inexpensive labor — for the things that it lacked, like wireless technology.In 1987, Ren Zhengfei — a former mid-level officer in the People's Liberation Army engineering division — founded Huawei in Shenzhen, the city bordering Hong Kong which was at the front lines of China’s economic reform program. At this point, China was 100%-reliant on foreign telecom equipment for its landline industry and most major international telecom equipment companies had established a presence in the country on the promise of tapping into China’s billion-person market.Shenzhen in the late 80s / early 90s (Photo: Shenzhen Municipal Government)At first, Huawei focused on re-selling imported telephone switches and fire alarms from Hong Kong. But for whatever reason, its founders decided very early on that the company should develop its own technology in-house vs. the “easier” path taken by others like Shanghai Bell to form a joint venture with multinationals to access foreign technology via transfers. Ren believed that “foreign companies were unlikely to transfer their cutting-edge technology and that Huawei would be better served by performing its own R&D”[12].Starting from a technology base of virtually nil, Huawei nonetheless prioritized R&D from its early stages. As a private company (vs. state-owned enterprise), Huawei suffered from lack of access to capital and was forced to borrow at extremely high rates in the early years. Despite these challenges, by 1993 Huawei had released its first significant in-house developed product — an electronic switch that could handle 10,000 lines, unprecedented for a domestic company at the time. It was a mature product and comprised almost entirely of foreign components but it was still quite impressive for the six-year old company.Huawei C&C08 Circuit Switch (Photo: DIY Trade, Shenzhen Huaxinzhihe Technology Co.)One of its strategies was to focus on market segments that were ignored by foreign technology suppliers. For example, international telecom companies preferred to focus on the rapidly growing urban centers while ignoring the poor, rural areas. Seeing this, Huawei adapted foreign technology to deal with “frontier market” issues — problems such as unreliable power grids and rats that like to gnaw on cables. Its business practices were “controversial” and by international standards probably textbook “corrupt” but in China at this time, function prevailed over form.Huawei began to separate itself from its domestic peers. By 1996, less than a decade after founding, it had secured its first international customer, selling circuit switches to Li Ka-shing’s telephone company in Hong Kong. By 2002, Huawei had overtaken Shanghai Bell, the largest Chinese-international JV at the time. Around this time it began expanding into adjacent markets like Internet and data communications, which was dominated by companies like Cisco.February 5th, 2003 marked the day that the name “Huawei” was formally introduced to the American lexicon (outside of a small group of telecom industry insiders). This was the day that Cisco sued Huawei’s American subsidiaries for copying code from its routers[13]. It marked the first major instance where a Chinese technology company had brushed up against an American one — not to mention the beginning of what I can only describe as a “lengthy and systematic effort by Americans to devise ever-increasingly creative and sophisticated ways to butcher the pronunciation of its name”.The suit was settled in 2004 but the damage had already been done. By this time, Huawei had captured one-third of China’s enterprise market and has never looked back.By the mid-2000s, Huawei was pushing hard into developing markets with an increasingly sophisticated array of products and services for both landline and wireless communications. Like its foray into China’s rural markets in the early 1990s, Huawei adapted mature products for developing countries facing problems that China had dealt with the prior decade such as non-existent or unreliable power grids and inexperienced technical staff.An example from one of my early Quora answers[14] was a low-power base station that could run on solar power, targeted at African countries that lacked reliable power infrastructure. In another early answer[15], I also discuss the important role the China Development Bank played in helping Huawei expand into overseas markets.RuralStar Base Station (Photo: Huawei)By 2011, Huawei had overtaken Ericsson as the largest telecom equipment supplier in the world with approximately $33 billion in revenue and industry-leading profit margins.It was around this time that Huawei had started aggressively pushing into consumer electronics[16] as well, piggybacking on the smartphone revolution and its now massive R&D operation to vault into the Top 10 of smartphone OEMs. By 2017, Huawei was pushing $100 billion in revenue, largely driven by growth in its consumer devices division which was now challenging Samsung for the top spot in smartphone market share (by unit volume). Today, the company has around 180,000 employees worldwide with 80,000 of them involved in R&D[17].Act IV — Part II:While Huawei was pushing forward at breakneck speed (even compared to the rapidly evolving Chinese economy), China’s state-owned telecom operators were plodding along slowly, trying their best just to keep up with the rapid and accelerating march of communications technology.Prior to 1994, the state held a monopoly on the provision of telecommunications services through the Ministry of Posts and Telecommunications and its operational arm, China Telecom. In 1994, to kick off reforms, the first competitor was established (China Unicom) and in the following years, there would be a series of reforms as Chinese policymakers tried to mold these former government ministries into modern corporations.It was around this time that Qualcomm had first reached out to China. Although the Chinese government had already selected GSM for commercial use in 1994 — attracted by lower cost and ease-of-deployment — Qualcomm set up a partnership with the People’s Liberation Army (kind of crazy when you look back and think about it) to use its CDMA technology for military communications. However, in 1998, Chinese President Jiang Zemin “shocked the world” when he announced[18] that the PLA would no longer be allowed to engage in civilian activities, swiftly killing off the joint venture plans.The Chinese government was initially hesitant to partner with Qualcomm until they would address three priority issues:It wanted to be able to deploy phones that could work on both GSM and CDMA networksIt did not want to pay the royalty fees or structure that Qualcomm was demanding for its CDMA technologyIt wanted access to the design of Qualcomm’s CDMA chipsetHowever, as detailed excellently by MacroPolo[19], in the backdrop of late-90s negotiations to enter the World Trade Organization (WTO), Chinese policymakers decided to drop most of these demands and, under pressure from the US government, agreed to allow Qualcomm and its CDMA technology into the Chinese market. This decision would prove very costly in later years but for now, China was more focused on WTO accession.Source: MacroPolo: From Windfalls to Pitfalls: Qualcomm’s China Conundrum - MacroPoloFollowing this decision, over the next decade Qualcomm’s revenue in the Chinese market grew from zero to nearly $2.5 billion and came to represent almost one-fifth of the company’s revenue. And this was just the beginning — as China began to commercially deploy 3G networks in 2008, this number was set to explode even higher.Source: Company Filings via Capital IQIn the most recent fiscal year (12 months ending September 30, 2018), Qualcomm’s revenue from China had increased to over $14 billion and represented over two-thirds of its revenue stream.A large part of this revenue stream, especially in the earlier years, was paid by foreign smartphone OEMs like Apple[20] but as Chinese smartphone OEMs (incl. Huawei) took market share in China and around the world, they began to realize how much Qualcomm was making off its intellectual property — because they were now the ones paying these royalty fees in increasing amounts.But just as Americans are about to break out the champagne and “USA! USA!!” chants, the latest missive from the Debbie Downer-in-Chief[21] himself flashes across our feed …We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!— Donald J. Trump (@realDonaldTrump) April 4, 2018Somewhere between China’s reputation as the world’s most rapacious “intellectual property thief” and the tens of billions of dollars per year it pays to international technology companies like Qualcomm … lies reality.Act V is where we are going to find out what that reality is.Act VOn November 8th, 2016, Donald Trump pulled off a surprise win over Hillary Clinton in the United States presidential election. Eight days later, a far less publicized political battle was taking place, this time over a topic that only a handful of people in the world really understand at a deep, technical level.Remember the industry groups that we met in Acts I to III that played such a critical role in choosing and setting wireless standards?Well, they are still around and playing just as critical a role. Depending on which technologies are incorporated, the respective IP holders may be richly rewarded, just as Qualcomm had for the better part of the last three decades.On November 16th, 2016, members of this standards body, 3GPP[22], met in Nevada to decide whether something called “polar coding” would be incorporated into official 5G canon. It was up against an alternative approach called “low-density parity check”. Intense debate ensued over which one was better.To a casual observer, the debate of “polar coding” vs. “low-density parity check” may have appeared to be a Nerd Fight of Epic Proportions but behind all of the computer science and technical jargon was something much deeper — what it was really about was control over the next-generation of communications technologies.As you may have guessed, this is where the paths of Huawei and Qualcomm finally began to converge.You see, China was getting weary from paying tens of billions of dollars every year in licensing and royalty fees for technology invented 15–20 years ago at a time when they did not have the capability or resources to even have a seat at the standards-setting table. While they had been late to the standards-setting game for even 4G/LTE standards, the country’s leaders had committed to making sure that this would not be the case with 5G. And Huawei was the main horse that they were betting on.As Huawei had grown through the years, it had continuously re-invested this growth back into R&D. By 2017[23], close to RMB90 billion ($13.8 billion) per year, out-spending Qualcomm by two and a half times in absolute terms (i.e. before adjusting for the approximately 3x[24] difference in wages between Shenzhen and San Diego).In doing so, it had quietly built up its very own patent wall:One of these patents was around the aforementioned “polar coding” method while Qualcomm held patents around the competing “low-density parity check” method. During the 3GPP debate, Western companies largely backed Qualcomm’s method while Asian manufacturers favored Huawei’s. In the end, both were accepted into as viable alternatives in the 5G standards book and each side moved on to battle over other (likely even nerdier) topics.While accumulating the most patents is still an important part of the game (as we saw in Act III with 3G), commercialization is an equally important consideration (as we saw in Act II with 2G).And on this front, China is racing ahead. Not only is it already the world’s largest wireless market by far, with 10x the number of base stations as the United States (and 40% of global sites[25]), its wireless operators are already well into the roll-out schedule and plan to be fully commercialized (for “standalone” or “full” 5G; see Note i) by the end of 2020[26][27]:The 3GPP debate in Nevada presaged the fault lines that we are now beginning to see, not only for 5G but other technologies as well. The elections of President Trump and the rise of other right-wing political parties in Western European countries has only increased the politicization trend.On April 16th, 2018, ZTE, the second-largest Chinese communications equipment supplier after Huawei, was hit by the U.S. Department of Commerce with an export ban[28]. The ban would prevent it from accessing critical components provided by U.S. suppliers (e.g. optical chips) and force it to re-design its equipment. It was a crippling blow to the company and while later reversed, was one of the first clear signs of this increased politicization.Then, just a few weeks ago on December 1st, 2018, Sabrina Meng, CFO of Huawei and daughter of its founder, was arrested in Canada at the request of the U.S. government in what was viewed by most as a politically motivated escalation. President Trump essentially confirmed it several days later[29].And that pretty much brings us to the present.The key protagonists, Huawei and Qualcomm stand together on stage, surrounded by a host of supporting cast members. The crowd watches with rapt attention, eagerly awaiting the next twist in the story …EpilogueAs I sit here and write in the last few days of 2018, it is quite clear that we are still very much in the middle of Act V — and it looks like there will be plenty of more excitement and fireworks to come.I also must admit that I am not 100% sure how Act V and the “race for dominance” will ultimately play out between Qualcomm and Huawei, not to mention all of the other actors on stage.As you saw through the first four acts, there were many twists and turns along the way, with new characters entering the space and old ones fading away with each successive generation of wireless standards. Add to that the increasing politicization of technology and the oft-times capricious nature of geopolitics and my crystal ball is quite foggy at the moment.But I do think understanding how we got to this point is very important if we want to think about the possible future scenarios and where we go from here — and that is why I took you through this fairly expansive review of the history of wireless.That said, I do want to leave you with some final thoughts on the topic:The emergence of Huawei as a major IP holder will inevitably cut into Qualcomm’s wireless market dominance and position as the favored toll collector.Opening quote to Act I notwithstanding, this is actually not just a Tale of Two Companies; it is also about existing players like Ericsson, Nokia and Apple that have long chafed at Qualcomm’s licensing fees and dominant market position[30].As I wrote in a recent answer[31], Qualcomm collects upwards of $30–40 on each iPhone that was sold — on top of any chips it provides — due to its “double-dipping” licensing structure. For 5G, Qualcomm announced that it would charge “up to $16.25” in royalties for every phone — much lower, an indication of lower negotiating leverage.The battle between commercialization vs. technology will be another area to watch.I do not know enough of the technical minutiae — stuff like “polar coding” vs. “low-density parity check” — to fully assess but my gut tells me that the differences between Huawei’s approach and the one supported by Qualcomm may not be that material and certainly not like the difference between TDMA and CDMA during the 2G and 3G mobile standards wars.We cannot rule out the possibility (as unlikely as it may seem at this point) that Qualcomm and Huawei end up collaborating or working together out of pure self-interest (an “if ya can’t beat him, join ‘em” type situation).The likelihood of global wireless standards bifurcating into different camps seems to be increasing, although it is far from inevitable at this point.If this happens, there are two clear camps — China and the “Five Eyes” Anglophone group. If you throw the European Union and Japan into the Anglophone group (let’s call it the “U.S. Alliance”), you are talking about a combined population of around 1 billion (that is significantly wealthier on a per capita basis) compared to 1.4 billion in China — all things considered, fairly balanced.But we cannot forget about the other 5 billion+ people out there — and places like Southeast Asia, India and Africa are where the front lines of the battle for technology dominance will take place.From the perspective of these 5 billion plus, the entrance of Huawei into the fray is seen as a positive development, insofar as providing them with another option and greater leverage to negotiate on fees.This bifurcation trend may also play out in other areas of technology, not just wireless standards.Semiconductors are another strategic (and related) industry. Chips are how you take the IP from the patents and convert into real-world use cases. They are critical components in network equipment, as ZTE was reminded in April 2018.The U.S. Alliance dominates the semiconductor industry, especially upstream (i.e. semi capital equipment). Certain specialty equipment like extreme UV lithography[32] is dominated by European like ASML and Japanese players like Canon/Nikon and can be easily controlled through measures like export bans over “dual-use” technology.However downstream production is dominated by Asian manufacturers, notably Taiwanese and South Korean foundries. Moreover, the consumer electronics supply chain is deeply entrenched in China and the East Asia region.So it is very complicated, and this is what makes predicting how the various points of negotiating leverage play out so hard.National security concerns are very valid. But I think they can be addressed without forcing others to have to split into camps that are non-interoperable. That would be a shame for everyone.Finally, the one thing that I do know for sure is that we’ve come a long way since the days of Gordon Gekko and his massive brick of a cellular phone.Explanatory Note[Note i] There is a bit of confusion out there as to what constitutes “5G”. Part of the reason is that there are essentially two different levels of 5G implementation:The first is something called “non-standalone” which means augmenting the existing 4G network with 5G hardware that will focus on ultra-high-bandwidth data services.The second is called “standalone” which means everything can go on the 5G network.It is somewhat analogous to the difference between a plug-in hybrid vehicle like the Chevy Bolt and an electric-only vehicle like Tesla.Roll-outs for “non-standalone” 5G implementation are happening in 2019–2020 throughout most of the world — for example, Verizon announced that “5G services” would begin in 2019[33]. However, China is planning a particularly aggressive roll-out schedule for “standalone” 5G compared to every other country with scale deployments in 2020.Whether or not this is the right strategy remains an open question.Footnotes[1] Wall Street (1987) - Wake up call (Drop it)[2] Time-division multiple access - Wikipedia[3] Videotape format war - Wikipedia[4] GSM - Wikipedia[5] cdmaOne - Wikipedia[6] Glenn Luk's answer to Are there any survivors of 9/11 on Quora?[7] Glenn Luk's answer to Why is the smartphone industry dominated by the U.S. and East Asian nations (e.g. Japan, South Korea and China)?[8] Nokia 8310, giocando a Snake II / playing Snake II[9] Glenn Luk's answer to Will China become an innovator?[10] CDMA microcellular telephone system and distributed antenna system therefor[11] Which Are the Most Valuable Patents in Qualcomm Patent Portfolio? - GreyB[12] https://csis-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/130215_competitiveness_Huawei_casestudy_Web.pdf[13] https://newsroom.cisco.com/dlls/Cisco_Mot_for_PI.pdf[14] Glenn Luk's answer to Is there an indigenous Chinese product that is the best in the world?[15] Glenn Luk's answer to How does China finance its development projects in Africa and South America?[16] INTERVIEW - Huawei makes aggressive push in consumer devices[17] Caring for Employees - Huawei Sustainability[18] 1998年江泽民宣布“军队不再经商” 震惊世界[19] From Windfalls to Pitfalls: Qualcomm’s China Conundrum - MacroPolo[20] Glenn Luk's answer to Where does the money I pay for an iPhone go?[21] Debbie Downer - Wikipedia[22] 3GPP - Wikipedia[23] https://www-file.huawei.com/-/media/corporate/pdf/annual-report/annual_report2017_en.pdf[24] Cost of Living Comparison Between[25] Blog: How many global base stations are there anyway?[26] Subscribe to read | Financial Times[27] China Mobile Confirms Aggressive 5G Standalone Plan | Light Reading[28] Secretary Ross Announces Activation of ZTE Denial Order in Response to Repeated False Statements to the U.S. Government[29] Trump says he would intervene in Huawei case to help secure China trade deal[30] Apple is still selling iPhones in China despite being ordered not to[31] Glenn Luk's answer to Where does the money I pay for an iPhone go?[32] Extreme ultraviolet lithography - Wikipedia[33] Verizon’s first 5G hotspot will launch in 2019