The profitability of investing in Bitcoin can not be overemphasized. Many who took early initiative to inveinvest in Bitcoin have already enjoyed healthy returns from their investments. However, some have made losses from their Bitcoin investments after making hasty and uninformed decisions.
The goal is to help you make informed investment decisions as a beginner.
Bitcoin is a virtual or digital currency, a form of cryptocurrency. Miners from different parts of the world generate Bitcoin using computer networks. To mine Bitcoin, you will need a powerful computer, knowledge of blockchain and special software.
In the early days of Bitcoin, the process of mining Bitcoin was easy. However, this has changed as this cryptocurrency became more popular. For you to mine Bitcoin today, you need more computing and processing power to mine Bitcoin. And this makes the mining process more expensive.
In recent times, Bitcoin mining has become unattractive to most people, but buying and trading activities are on the increase. Today People use trading systems to buy and sell Bitcoin. For most people, buying and trading Bitcoin is more relevant than mining.
Perhaps, that’s because most investors don’t know mining and also mining has become more complex. The fact is that most people look for easier and faster ways of doing things and Bitcoin is not an exception. And that’s the reason Bitcoin trading is now more known by many than mining.
How Does it Works?
Bitcoin miners have private keys linked to their address or Bitcoin wallets. When you have a Bitcoin wallet, you can trade or mine this cryptocurrency. This equally enables them also to send or receive Bitcoin.
Most investors use Bitcoin brokerages and exchanges to trade Bitcoin. But, you can buy and sell Bitcoin without going through these intermediaries. To make this happen, you will send your Bitcoins to another user’s wallet in exchange for fiat money.
Bitcoin is not recognized as an exchange medium or currency by all countries. But in some countries, people use it to pay for services and goods. The acceptance of this cryptocurrency is on the increase in different parts of the world. Moreover, some digital savvy companies and businesses accept Bitcoin payments.
Getting Started with Bitcoin Trading
The easiest way to inveinvest in Bitcoin is to start by buying it first. And you can find many online marketplaces where people trade cryptocurrency. A large majority of these marketplaces allow investors to send money via conventional payment methods when buying Bitcoin. Thus, you use a fiat currency to buy Bitcoin.
Therefore, you can use an exchange or brokerage to buy Bitcoin using fiat money. These platforms are not free, you will be charged a fee. Once conclude on the transaction, you can transfer the Bitcoins to your digital wallet from the crypto exchange. From your wallet you can send to another person, as long as they have a digital wallet.
No institution (bank or government) regulates Bitcoin. And this is the major benefit of using this digital currency. This implies, you won’t pay any fee when sending Bitcoins to another people whether within or outside your country. That’s because Bitcoin transactions do not involve financial institutions and does not have a central shortage system.
However, no regulations or regulating body comes with risks. For instance, if by mistake you send your Bitcoins to the wrong address, you wouldn’t be able to recover them. No authority to address the issue. Furthermore, apply caution when selling or buying Bitcoin because of internet scammers. You’re completely responsible for safe keeping of your wallet by not sharing your private key with anyone.
Bitcoin is a good investment but equally very risky because the market can be volatile. You owe yourself the duty to monitor the market consistently to make informed decisions when purchasing and selling Bitcoin. Also, ensure you use trusted Bitcoin exchanges and wallets for safety of your cryptocurrency.