Why to consider before getting into Bitcoin
Bitcoin is one of the most attractive investments for the people who are trying to invest their hard-earned money to get higher returns. But wait! If you want to invest your money in any asset, consider taking studying first before you spend.
Bitcoin Revolution has been heard in the world since 2009. Bitcoin is a newly evolved currency that is free from nationalised banks. This helps in having the freedom to trade in any part of the world. However, you should know that the fluctuating demands of Bitcoin raise its price, and can result in higher returns.
Birth of Bitcoin
Bitcoin is the first global cryptocurrency. Bitcoin was conceptualised by an anonymous person only known as Satoshi Nakamoto.
Bitcoin was made with the idea of a kind of currency that is familiar to the Internet, which can be known as a form of digital cash. The reason for creating such Internet currency stems from the principle that it should be free from the control local banks and governments. Another advantage of Bitcoin is that it can be accepted globally in any country.
Road to Bitcoin
If you are trying to indulge in Bitcoin with some of your money, then you need to know the very basics of it. Lack of this knowledge will likely make you a foolish investor than a wise one. So, if you are allotting your hard-earned money in a venture, be sure to first collect a good amount of knowledge so that you can make the wisest decisions for your financial life.
Four Things You Should Know
The points enumerated below can be mind-boggling to some, but this will help you bust some of the myths propagated by the government and people around you.
These Five points will help you decide whether you should invest in Bitcoin or not. Read all of them thoroughly and make your financial investment a profitable one.
Bitcoin Fluctuates, but Not as Much You Thought
Bitcoin fluctuates, but not much as you thought. The news and the hype you always see can make a big impression, so let us show you some of the facts:
According to the Bitcoin Volatility Index, the volatility over six months of the dollar price is 4.23%. In the whole year, it shows 3.58%. Bitcoin moves, but it moves within a year, not in a few months. And soon, it shows that the graph moves up instead of down.
Bitcoin Trading Isn’t Completely Free
Bitcoin is a currency that is free from the control of national banks, but transaction costs are still running through them. Buying, selling, and moving Bitcoin are chargeable. Every transaction includes a small tip that encourages a block in the blockchain. This tip generally amounts to $1.67, but it can be more depending on the size per file. The speed of transaction is also dependent on the tip amount.
An exchange is used for deposits and withdrawals with their charges included. This charge can be up to 4%. The 4% can amount to 50 USD charged from your account. For free currency, you need to see a lot expenses.
Bitcoin is Traceable
Many of us think that Bitcoin technology is untraceable. This is true to some extent, but it can be tracked after the money is withdrawn. Bitcoin used to be a very popular choice for people operating in the black market because it is supposedly untraceable, but now, it has been revealed that this can, in fact, be traced with a ledger.
Bitcoin is not linked to local bank accounts, but the blockchain is a public ledger that has a record of every transaction made. Anyone can see this, but the information only provides a number assigned to account holders.
We won’t know who owns the account number. The owner can only be identified when they transfer the money to their local bank account. After that, identification becomes open, and that is why Bitcoin is not that anonymous as everyone thought.
How Do I Get Bitcoin?
Bitcoin can be taken from an authentic exchange provider like Luno. This is similar to buying shares or stock. Like any other currency, you can earn more Bitcoin by offering your services and asking people to pay in Bitcoin.
How Does the Luno Exchange Work?
An exchange is a place or a platform where potential buyers and sellers exchange the currency. Platforms like Luno do not own any Bitcoins, but are simply places that connect buyers and sellers with each other.
Opening a Bitcoin wallet is easy. Download the app and verify your identity with some documents. Soon after, you will be able to buy or sell.
How Much Do I Buy?
There is no need to buy a single Bitcoin. You can buy a fraction of it when you don’t have enough money to purchase it. The minimum you can buy is R20.
After you transfer the money from your bank account to the platform, you can get your Bitcoin safely in your wallet.
Expert Investors about Bitcoin
The points mentioned above are quite general, and you should be aware of them before you get started. The next point here, however, is from an expert’s opinion.
Some investors think that Bitcoin should be made a global reserve currency. This has been proposed because of its digital, open, and decentralised nature. Over the years, the liquidity and adoption of Bitcoin has been increased, and it has become less volatile.
Reserve currency is considered as an international trade and a strong and stable exchange.
Presently, Euro is the most viable reserve currency after the Dollar. In the past, gold was used to settle international debts, as it is can store value for the long term and denominate values for trades.
Bitcoin is a form of digital gold. As we have seen over the Internet, where most assets can be found, people are now aware about Bitcoin, so it works as digital gold.
This allows us easy access and greater liquidity, which can be used in any part of the world, providing a stable monthly income to people.
Bitcoin investors think that the Bitcoin protocol continues to evolve and grow yearly. As new companies and people have started using the Bitcoin network, its value continues to increase. A very basic comparison is made with the growth of the Internet and growth of the Bitcoin protocol.
Use as Collateral
Investors claim that the terms of investing in Bitcoin are used as a way to digitally convert non-digital assets, such as real estate and traditional stocks. This is very helpful in providing easy documentation and custody to the owners. All Bitcoin-based contracts are easily traded and accepted worldwide.
Bitcoin helps investors create a diverse investment plan. Investing in multiple streams can be a very wise decision. A divisible investment can be less risky compared to putting all your money in one basket.
The concept of Bitcoin is a very good way to apply both the knowledge of programming and finance, which have been merged to create a virtual currency.
The very basic rule of investment is to know all the facts about the asset in which your money is being allocated. Not being well-versed with this information can make you into a foolish investor, unlike a wise one who becomes rich.