The Bottom Line on Bitcoin Investing
The huge Bull run in Bitcoin’s price into the end of Y 2017 got lots of people interested in the cryptocurrencgy the likes of which had never been seen. And although Bitcoin’s price has corrected from its peak near $20000/ea, interest in Bitcoin investing is still very high.
But, with all of the talk very few know how to buy or sell Bitcoins or other digital currencies.
Now, if you learn the tech and knows how and where transactions take place, you can purchase Bitcoin in a just a few easy steps.
Step 1: Get a digital wallet. This digital wallet allows for the buying, sending, receiving and tracking of virtual currency.
Digital wallet may mislead users, as it implies storage. A blockchain, which acts as a virtual ledger, performs the actual storage. Every Bitcoin owner receives a new copy of the ledger every time a transaction takes place. This tracks who owns how much Bitcoin and limits its supply.
Unlike a physical wallet which stores your cash, the digital wallet includes record-keeping features which track the sending and receiving of virtual currency. Wallets can consist of mobile, desktop, hardware, virtual or even paper wallets. Each type of wallet comes with benefits and security issues.
A private Key encrypts each digital wallet.
This private Key consists of a code that can be stored digitally or written down on paper. However, bitcoin owners should note that no other copy of one’s private Key exists. If you lose your private Key, you lose your digital currency forever.
Also, if someone steals a private Key, that leaves an entire digital wallet vulnerable to theft.
Remember, the crypto world has no FDIC that can restore lost funds. Victims of theft will likely never recover their Bitcoin/s, so this makes protection of the wallet and private Key very important.
Next, once you get a wallet, there are 3 major options for buying Bitcoin, they are, the following
- A Bitcoin exchange. An exchange acts as an online intermediary for both the purchase and sale of Bitcoin using paper (fiat) currency or other cryptocurrencies, while exchanges can help with buying or selling, they offer no security. So, you should keep your digital wallet away from exchanges when transactions are not taking place.
- Buying Bitcoin directly from another person or business in a local area. A site called LocalBitcoins is often used for such transactions, and
- A Bitcoin ATM. These are either online or physical locations that allow for the deposit or withdrawal of money for the purpose of buying or selling Bitcoin. Sites such as Coin ATM Radar can help people find a nearby bitcoin ATM.
A company called Coinbase has simplified the process of Bitcoin investing. Coinbase allows users to exchange cash in exchange for Bitcoin or numerous other cryptocurrencies.
You obtain a Coinbase account, deposit money from a standard bank account, use that cash to purchase Bitcoin and other cryptocurrencies, and place it in a digital wallet. From the digital wallet, you can conduct Bitcoin-based transactions with others. And you can also exchange Bitcoin for USDs.
Coinbase also offers added security not available to other digital wallets. With Coinbase, if a breach in one’s account occurs, Coinbase includes insurance that will replace the Bitcoin at no charge.
Coinbase, however, does not allow you to control your private Keys. While that protects its depositors from forfeiting their Bitcoin if the private Key gets lost, the ease of use and security require you surrender of some control.
Now, buying 1 Bitcoin has become expensive. However, the design of Bitcoin allows you to purchase fractions of Bitcoins.
Each fractional Bitcoin unit is called a “satoshi,” named after the alias of Bitcoin’s founder, Satoshi Nakamoto. Each Bitcoin constitutes 100-M satoshis. Hence, even if you only has $5 available for Bitcoin investing, this modest investment could buy 1000’s of satoshis.
Small investors can invest by buying a few satoshis. Other larger investors can deal in whole Bitcoins. Whatever your preference, obtaining Bitcoin is easy.
By taking the simple steps above, you can open yourself up to new investing possibilities.
Currently, Bitcoin is trading at 6,252.4849, +34.9897, or +0.56%, as of 5:18a BST, the market is open.