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‘Investing in Bitcoin’ is one of the main phrases people search for online. If you are planning to buy Bitcoin but do not know much about it, read this article to the end to understand what Bitcoin is.
Digital currency is an exciting investment opportunity, however, you can lose your money if you don’t have the right knowledge about how the crypto space works.
In this article, I will take you through five things that you need to know before you invest in Bitcoin.
What is Bitcoin?
Bitcoin is a digital currency that enables people to carry out exchanges without the need for a third party (such as a bank). In the modern era, Bitcoin can be likened to an online currency due to its unique characteristics. Unlike the traditional digital currencies, you cannot transfer Bitcoin irreversibly since it is encrypted into computer languages.
Bitcoin allows people to execute transactions instantly. It is not affected by location because it runs via the nodes of a computer. With Bitcoin, you can easily deal with any person irrespective of where they are in the world.
Things You Need To Know Before Investing In Bitcoin
Bitcoin is a decentralized currency
Unlike fiat currencies like GBP, USD, and Euro, Bitcoin goes through a decentralized system since it is a cryptocurrency. It is not influenced by any third party (such as financial institutions and central governments). Since Bitcoin goes through a decentralized system, you don’t need to bother about it being seized or devalued by a third party. Also, you don’t need to be regulated by any central authority before you can invest in Bitcoin.
However, there is a disadvantage of Bitcoin being decentralized because it can increase criminal activities online since the government cannot control it.
Bitcoin is a real currency
Despite its decentralized nature, Bitcoin is real money because people can use it to buy things. Different organizations, such as Expedia, Newegg, and Microsoft Corporation, allow you to make a direct payment using Bitcoin.
It is volatile
One of the most important things you need to know about Bitcoin is its volatility. The value of Bitcoin goes through different risks and profits. Its value is affected by the market supply and demand.
In April, the value of Bitcoin was around $65,000 but as of the time of writing this article (May 2021), the value is $36,527.60. So, it is important to know the right time to jump into the market if you don’t want to be frustrated by the erratic movement of the market.
You can buy Bitcoin with fiat money
Coinbase and Binance (these are referred to as cryptocurrency exchanges) are designed to meet the needs of new investors. They are platforms where you can buy digital currencies using your credit card, debit card, and bank account.
PayPal users in the United States can also invest in Bitcoin directly through PayPal using their Personal or Premier PayPal accounts.
Keep your private keys safe
The last thing you need to know is that you should keep your Bitcoin safe. One of the best ways to ensure that your Bitcoin is safe is by keeping it in a hardware wallet; this protects your Bitcoin from an internet connection and the discrepancies associated with it.
Your private keys will give you access to your wallet, so you mustn’t misplace them. Also, do not keep it where other people can easily have access to it.
Bitcoin is a hot topic in the financial market at the moment due to many reasons. However, its capacity to be a great investment choice makes it enticing to many people. This article has shown you five things you need to remember when investing your resources into Bitcoin. Use the content of this article to get yourself familiar with the cryptocurrency; Bitcoin.