Top 4 Things You Need to Know Before Investing in Bitcoin: Fast and extra cash is something that each and every one of us desires. Off lately, there has been huge talking about bitcoins and how they are “the right type of investments”, considering which, most people these days have been inclining towards these bitcoins. However, an investment should always be preceded by a good amount of research.
Just to help you with the case, let us get back to the basics and know what actually the theory of “bits and bitcoins” is.
1. Bitcoin Basics:
What is a Bitcoin?
A bitcoin can be safely termed as the “internet Currency of the New World” which can only be transferred/exchanged irreversibly unlike the regular digital currencies and digital money. They are basically hardcoded into computer languages & codes and are traceable to restrict its usage more than once.
In simple words, bitcoin is a purely peer-to-peer version of electronic cash that would allow online payments sent directly from one party to another without going through a main institutional institution.
Learn more about how bitcoin works here.
Is the investment in Bitcoin dangerous?
With so many people talking about the bitcoins these days, you would get to hear more than one opinion for it. Some say it is absolutely wasteful to invest in a bitcoin while the others consider it to be the future of all kinds of investments.
Good or bad, investing in a bitcoin is “quite an investment” as the value of 1 bitcoin in US Dollars is 7960.08 (as of 27 March’2018).
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How can you purchase a bitcoin?
There are multiple ways to purchase a bitcoin. First and foremost of all, you would need to install the Bitcoin Wallet or optionally, you can also use the desktop Bitcoin Wallet which also keeps you updated of the current news, trends, and information related to Bitcoins. You can use your real currency to buy a bitcoin either through Bitcoin Exchanges or through private sellers as well. The Android Bitcoin Wallet let you use it as a kind-of real currency by allowing you to pay for items and services through your purchased bitcoin.
Bitcoin Checklist: Make Sure to Consider Each One of Them Before Investing in Bitcoin
2. Invest only what you can afford to lose:
Just like any other investor, you too can get overwhelmed by the power of money especially when it is proposed to come in a multiplied factor. Even many experts get lured and overwhelmed while investing. You, as an investor, need to know your baseline and never dare to jump over it.
The question arises; how to identify this baseline?
Well, researching is the key! The first rule to investing in Bitcoin lies in researching. Good News: There are various internet resources through which you can get a deep insight into how everything works from road to hill. However, the baseline is that you don’t have to put all your eggs in one basket.
Moreover, if by any chance, you find yourself getting lured in “Bitcoin debt investing” don’t do it! Bitcoin debt investing traps you in an infinite loop of debt (with sky-high interest rate) and you’d have to pay it even if your Cryptocurrency investment doesn’t show any return.
This goes the same for stock market, the only difference that the Cryptocurrency Market has is that it is global and it offers you a list of extended leverage. Also, it is digital.
Also read: Where should I invest my money?
3. Don’t leave a lot of money in exchanges:
Okay, this might contradict many minds of experts but it is, however, true. Even the popular exchange platforms for Cryptocurrency can be hacked (quite easily) and your entire money might get lost in a fraction of seconds. Even the longest and safest password with 2-factor notifications fails in preventing your account from malicious use.
To play it safe, either don’t make a hefty exchange via any other exchange platform no matter how trustworthy it claims it is. Optionally, if you do want to put a hefty exchange bet, make sure that you don’t leave your money (digital currency) in there for a longer period of time.
4. Always Go with a Safe Exchange Platform:
With a plenty of options flowing across the surface of the internet, it becomes quite tough to choose which one to go with. However, for a backed up decision, you need to consider each and every factor about the exchange platform to finally end up to a conclusion.
Some Cryptocurrency Exchange platforms offer to give extended leverages such as a wide marketplace to buy services/commodities from which might lure you to invest using their platform. A good idea, however, is to read online reviews.
A Review of an application or website interface helps you know that you are going with a trustable name. One of the major concerns to get through for an online exchange platform is of “security”. You need to know the historical records that concern safety and security when it comes to online Cryptocurrency exchange platforms.
Having said that all, Bitcoin and other altcoins have become revolutionary pillars when it comes to digital finance. Above all, make sure you take your picks wisely!
Also read: Getting Smart With Investment in Gold.