In today’s digital world, people and processes are getting ever more reliant on technology, particularly the Internet.
For this reason, that Bitcoin — a secure and global virtual currency — has piqued the interest of investors worldwide does not come as a surprise. It is a new-age currency that is both fascinating and complicated. It only exists on the Internet and lets users remain somewhat anonymous.
Not only is Bitcoin open to everyone, butit also offers an interesting opportunity to foray into an entirely new asset class. If you are getting to know about Bitcoin for the first time, you may think that it looks a tad suspicious and somehow precarious. Such fears are actually unfounded; and to dispel them, here are a few things to consider when you are looking to invest in Bitcoin:
Bitcoin is a cryptocurrency that is designed for making payments for goods and services, much the same way fiat currencies like U.S. Dollars or Euros function. However, that’s all the 2 types of currencies share in common.
Unlike a conventional currency, Bitcoin is decentralized. This means that its supply is not under the control of any government or central bank. It is a digital currency so you can never find any physical Bitcoins or Bitcoin bills. This currency lives 100% on the Internet, is tracked with the aid of blockchains, and constantly grows groups of records for providing a full history of every Bitcoin.
Bitcoin was designed by Satoshi Nakamoto (a pseudonym) in 2008,and this individual published a paper that looked at the potential modus operandi of Bitcoins, and merely one year later, the virtual currency started being traded as well as mined. One of the numerous reasons this cryptocurrency gains traction is as a result of the lack of middlemen and banks that impose exorbitant charges.
Why Do You Need to Invest in Bitcoin?
Did you know that one Bitcoin can be valued at hundreds of dollars? Some people might see this as a ludicrous idea. But why are Bitcoins valuable?
This is because they are both scarce and useful. For instance, gold can be regarded as a currency and exists in limited amounts on earth. As people mine new gold, the quantities left will keep decreasing until it gets harder and costlier to search for and mine. The same analogy applies to Bitcoin as only 21 million Bitcoins are in existence, and these become harder and harder to mine as time goes on.
Apart from being scarce, they are also useful. This digital currency offers effective and predictable monetary policy, which can be verified by any user. The sound monetary policy of Bitcoin is among the most important features of the currency. For this reason, it is possible to determine when fresh Bitcoins are designed or know the number of Bitcoins that are in circulation.
It might also interest you to note that you can send Bitcoins from any part of the world to any other location in the globe. It is not possible for any bank to block your payments or terminate your account. The currency allows cross-border payments and equally offers a convenient means for people to avert undesirable effects resulting from failed governmental monetary policies.
The internet has made the reach of information global and readily accessible. A global currency like Bitcoinwill produce similar effects on finance as well as the world economy. If you have got a grasp on the potential importance of Bitcoin, it will be quite easy for you to discern reasonsinvesting a Bitcoin could be a great idea.
Is Bitcoin Anonymous in Reality?
Not really, it is not 100% anonymous. Hackers that know their onion and government agencies have the capability of tracking pretty much anything — Bitcoin inclusive. While Bitcoin transactions are transmitted randomly over the peer-to-peer (P2P) network (a feature that makes it seemingly anonymous), the system is not always reliable.
If a hacker is able to connect multiple nodes to a particular Bitcoin network, the combined data that are obtained from these various nodes could be sufficient to know the specific location, where a transaction originated from.
Is There an Official Price for Bitcoin?
No official price exists for Bitcoin. Its price is set by anyone, who is willing to pay. CoinDesk’s price index is an amazing resource you can check out to know more about this. Generally, the price of Bitcoin is shown as the cost of one Bitcoin.
When Is the Best Time to Buy Bitcoin?
The cryptocurrency market, just like other markets, has its own fair share of uncertainties. Throughout the history of Bitcoin, it has shown a general increase in value at an extremely fast rate, which is followed by a gradual and steady decline until it becomes stable. You can make use of tools such as Cryptowatch or Bitcoin Wisdom for analyzing charts and getting a good grasp on the price history of Bitcoin. As you are already aware, the digital currency is global and, thus, isn’t affected by the financial situation or stability of any specific country.
For instance, speculation on the Chinese Yuan experiencing devaluation has brought about greater demand from China in the past, a development that equally pulled up the exchange rate on exchanges based in America and Europe. Generally, global chaos is regarded as being beneficial to the price of Bitcoin because the currency has no political trait and is not under the control or influence of a specific government. When looking at how Bitcoin’s price will be affected by economics and politics, you need to adopt a global viewpoint, not just to focus on happenings in a single country.
How You Can Invest a Bitcoin and Where to Buy It
When you are faced with the problem of how to invest in Bitcoins, the solutions are quite straightforward. You can purchase the cryptocurrency using your hard cash, wire transfers, and debit or credit cards. However, you should first establish a Bitcoin wallet. This will be where your wallet ID is got from.
You can look at a wallet, when used in crypto parlance, as a place for storing your Bitcoins, much the same way your wallet is for storing your cash as well as credit cards.
The difficulty of purchasing Bitcoins is dependent on your country; in developed countries, for instance, there are more options and also more liquidity. It is important to note that Coinbase is the largest bitcoin broker in the world and is available in many countries, including the US, the UK, Canada, many European countries, and Singapore.
To invest a Bitcoin, explained above are some information you need to have at your fingertips. This virtual currency is growing in popularity every single day, and investors are bullish its importance will only keep increasing in today’s digital world, where virtually all human activities are internet-driven.