After 10 years, there’s still a debate about whether it’s wise to invest in Bitcoin as the most attractive cryptocurrency or not. Information arrives daily and reveals an uncertain market full of fluctuations. There are a lot of unknowns and no generally prescribed guide to a successful investment.
We’ll point out the important things you need to know before investing in Bitcoin in order to better understand the risks but also to discover the best way by which you can make a profit.
Bitcoin Isn’t Under the Jurisdiction of Any Central Bank
This is a digital currency that was created through software and doesn’t have any “boss”. Neither the largest governments nor the strongest currencies affect its value. It’s much less susceptible to shocks and crises in the world and changes mostly under the influence of supply and demand for new units.
This is perhaps the most important reason why Bitcoin survived despite the black forecasts because people saw it as another investment option when the mortgage market collapsed and the crisis occurred in 2008.
However, complete decentralization also brings problems with its ownership and disposition. In many countries, this payment system still isn’t regulated and cryptocurrencies aren’t recognized as a means of trade precisely because there’s no centralized control on which the banking system would rely.
States also resent the fact that there’s no possibility to track down the account holders and the source of money, so there’s a fear of “laundering” illegally acquired property.
Anyone Can Become an Owner
Considering the Bitcoin price, how can this currency be available to everyone? The answer is extremely simple - Bitcoin has its smaller denominations that are much more affordable to invest.
In other words, there’s a possibility to get a portion of Bitcoin currency with a small investment. With such occasional, smaller investments, you can gradually increase your ownership and wait for its value on the stock market to increase.
Choose Your Digital Wallet Type Carefully
When you create your Bitcoin wallet, you get a digital key with it and it’s the only way for you to access your address and funds online.
You can use a printed QR code to open and access the stock exchange, access it via a mobile phone application, web server or hardware keys such as USB. Each of these solutions has advantages and disadvantages.
Hardware keys and paper QR codes are susceptible to damage, while applications that use the Internet can be subject to hacker attacks. Either keep your digital key very well or choose websites that have the experience, that are reliable, and have satisfied members. Choose those that allow you to trade for the local currency so that you don’t lose on the exchange rate difference.
The cryptocurrency exchange is subject to large fluctuations in value that can rise or fall significantly over a long period of time. These are the things you need to be aware of before investing in Bitcoin.
Over the years, cryptocurrency crashes and the complete cessation of the functioning of the BTC currency were predicted more than a few times. But, even after great falls, this unit continued to exist.
Don’t be “lured” by the opportunity to earn. How much money to invest? Only the amount you’re willing to lose. Assess well when to buy and when to sell Bitcoins, follow the movements on the stock market, be patient and calmly accept any change.
Think Carefully About Whether “Mining” Is for You or Not
Earnings are made through the difference between the purchase and sale value, but also through mining.
When a transaction is made between two addresses (two participants), it’s entered in the blockchain register of all Bitcoin transactions. The entry isn’t done automatically, but the persons (miners) try to decipher the last few digits of the code that’s necessary for the transaction to be verified, using their computers. The fastest miner also receives BTC units from the persons who performed the transaction, but also a reward from the system. In May 2020, the award was 6.25 BTC units.
Before you start rubbing your hands contentedly, you must know that high-tech equipment, which costs a lot, is necessary for mining. This isn’t a guarantee of success either, so the miners unite in pools (groups) by joining their equipment together in order to have a better chance of winning and sharing the prize.
How to Dispose of BTC Currency Later?
Think long-term - when you become the owner of a cryptocurrency, how can you use its value? One way is to sell for some currency from the official payment system, but there are other options.
Bitcoin has earned its place as a legal means in many transactions. You don’t need credit cards, banks and cash to pay for flight tickets, theater tickets, equipment, buy a phone… Companies have recognized the potential of the crypto market, consciously taking risks but also attracting customers by offering them different payment systems.