Everyone who is anyone in the world of investment has heard of and made money from bitcoin. But, it is just as easy to lose money in bitcoin as it is to make tons of cash.
If you are interested in bitcoin, it’s advisable to do your research about bitcoin before tying up your cash into a risky venture. You can continue reading to find what bitcoin is and what are the things you need to know before you invest in bitcoin.
What is Bitcoin?
Bitcoin is a cryptocurrency invented in 2008 by an unknown person or group of people, using the pseudonym of Satoshi Nakamoto. It started as open-source software, made available to the public in 2009. It’s an electronic form of cash, encrypted into computer languages making any bitcoin transaction irreversible.
Critics named it a speculative bubble, as it is a decentralized digital currency where price volatility and exchange thefts are rampant. Without a central bank, the bitcoin network has no room for intermediaries. And, the network nodes verify the transactions using cryptography.
All transactions become part of a public distributed ledger known as the blockchain. The Genesis block, the starting of the blockchain, had names such as Wei Dei, creator of b-money, and Nick Szabo, inventor of the bit gold.
It is said that after mining one million bitcoins, Nakamoto handed over the network alert key and control of the code repository to Gavin Andresen and disappeared in 2010.
Now that you’ve got a fairly clear idea of what bitcoin is, it’s also necessary to understand the things to be on a look-out for prior to the purchase of bitcoin.
What to know before investing in bitcoin?
It is a viable decision to learn about a particular investment niche before putting any of your money into it. Hence, you ought to know all that you can know about bitcoin.
Bitcoin is Decentralized
Bitcoin is a cryptocurrency, designed such that it cannot be controlled by any financial institutions, the central bank, or even the central government. So, you can be sure that you can put your money into bitcoin, without fear of seizure or devaluation.
However, the lack of a centralized authority to monitor the transactions, there is an unprecedented amount of criminal activities that take place in Bitcoin.
Bitcoin is Digital and Anonymous
As mentioned earlier, Bitcoin is digital and that means that you can never touch a physical form of it. It works entirely online, and it’s also pseudo-anonymous so that you don’t need to share your personal information when making transactions if you own a Bitcoin wallet ID.
You know that the person that you are transacting with will never learn of your identity if you wish to keep it a secret. On the flip side, you will also not know the true identity of the person with whom you transact, hence, you can be easily scammed.
Bitcoin is Highly Unpredictable
At one point in time, the price of Bitcoin was $31.45, and within the same month, the price went down to $11.00. As may be able to gather from the information just given that Bitcoin, is nothing if not volatile.
It is a popular investment vehicle, known for reaping in the profits. But, it’s notorious for causing bankruptcies also.
Bitcoin Can Be Lost in Exchange
In recent times, hacking has become quite prolific, even on the net. Thus, don’t keep large amounts of Bitcoin in your e-wallet for long. And, don’t make the transaction involving a large amount of bitcoin. This is a sure-shot way of getting hacked, even when you do use security measures to keep your account from being invaded.
Bitcoin – know the nitty-gritty
If you want to invest your hard-earned cash into Bitcoin, then you better be prepared to learn the mechanics of it. Simply put, you need to master when to buy and sell Bitcoin. The best place to start is looking for the safest place to buy and sell bitcoin.
Some sites offer far more security to their buyers and sellers of Bitcoin. You want to transact in a secure space when it comes to bitcoin. There are platforms that provide extended leverages as well as online training programs for beginners.
And, lastly, you need to learn how to protect your cryptocurrencies. There are several platforms that present advanced security solutions and help with other protective measures to protect your investment from cyber attacks and scammers.
Bitcoin and More
Bitcoin happens to be quite popular. But, there are literally thousands of other cryptocurrencies out there. The wisest thing to do when it comes to investing in cryptocurrencies is to divide your eggs into different baskets, In other words, buy other cryptocurrencies too.
And, cryptocurrencies aren’t something that should be left alone in the e-wallet for long. Since the dangers that lurk around cryptocurrencies are many, it’s viable to buy and sell in quickly.
Bitcoin is Still Subject to Debate
Bitcoin surged to popularity when it was released. And, as predicted the bubble did burst after a while. After many fluctuations, bitcoin is back.
And, though it has won over many of its critics, there is still a long line of naysayers, when it comes to investing in cryptocurrencies. The criticism rests on the argument that cryptocurrencies, not just, Bitcoin is an unsafe investment.
It’s never possible to master an art without actually getting your hands dirty. So, we would recommend that you go about it the smart way. Know the craft, learn all about it, and then take baby steps to become skilled at it.
There are many reasons that Bitcoin gained such popularity. In the beginning, the Bitcoin revolution, it was much about the novelty of dealing in bitcoin. The first known commercial transaction was when Laszlo Hanyecz bought Papa John’s pizzas with 10, 000 bitcoins.
Later, it reeled in buyers with the lure of minting money in a matter of days. And, now it keeps the buyers in to have an added feature to their investment portfolio.
It isn’t a bad idea to branch out to cryptocurrencies, but be wary of it. You can make much from it but also there is much to be lost if not careful.