Bitcoin – What To Know Before Investing In It (12)

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How to Invest in Bitcoin

Thinking of investing in Bitcoin?

This post will outline some things you NEED to know before you buy.

We’re going to explain:

  • The basics of investing in bitcoin
  • Why it needs to be taken seriously
  • How to buy bitcoins (with credit card or bank account)
  • How to protect and properly secure your bitcoins if you do decide to invest

Quick Info – Top Exchanges

How to Purchase Bitcoins

eToro

eToro is a trading platform based in the United States. It supports Bitcoin, Ethereum, Litecoin, Zcash and many other coins.

Deposits can be made quickly via bank transfer or ACH. It also offers unique features like copy trading.

Your capital is at risk.

We may receive compensation when you use eToro. Please visit eToro for its exact pricing terms.

  • Offers unique copy trading feature
  • Trusted echange that has been active in traditional finance
  • Interface is clean and easy to use
  • You cannot deposit cryptocurrency, but you can deposit with other payment methods

Coinbase

Coinbase is the world’s largest Bitcoin (BTC) broker. They represent an easy and fast way for new users to purchase bitcoins. Coinbase supports customers in over 30 countries, including the United States, Europe (besides Germany), UK, Singapore, Canada, and Australia.

Customers in the above-mentioned countries can purchase bitcoins by debit card, bank transfer, SEPA transfer, and more.

We may receive compensation when you use Coinbase. Please visit Coinbase for its exact pricing terms.

  • High liquidity and buying limits
  • Easy way for newcomers to get bitcoins
  • “Instant Buy” option available with debit card
  • Purchases made with bank transfer can take up to 5 days to complete
  • Coinbase may track how and where you spend your bitcoins

Coinmama

Coinmama allows customers in almost every country to buy bitcoin with a credit or debit card. They charge a 4.9%-5.9% (depends on volume) fee on each purchase.

Customers in Europe can also purchase bitcoins with SEPA transfer for a lower fee.

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Want to buy using Coinmama? This step-by-step guide will show you how to use Coinmama.

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  • Works in almost all countries
  • Highest limits for buying bitcoins with a credit card
  • Reliable and trusted broker
  • Some of the highest fees among credit/debit card bitcoin brokers

Bitpanda

Bitpanda is a Bitcoin broker based in Europe.

They have high payment limits and low fees across their wide range of payment methods.

Bitpanda offers customers the option to buy bitcoins with credit card, debit card, SOFORT, Skrill, NETELLER, giropay, eps, SEPA, and Online Bank Transfer.

We may receive compensation when you use Bitpanda. Please visit Bitpanda for its exact pricing terms.

  • Some of the lowest fees for buying bitcoins with credit/debit card
  • Reliable and trusted broker
  • Fees aren’t shown openly on the site but instead included in the buying price

Why Bitcoin is Gaining Traction

The world is becoming ever more reliant on the internet.

It is no surprise that Bitcoin, a secure, global, and digital currency has claimed the interest of investors.

Bitcoin is open to everyone and provides an exciting opportunity to delve into an entirely new asset class.

Investing in bitcoin may seem scary, but know that it takes time and effort to understand how Bitcoin works.

Note: Bitcoin with a capital “B” references Bitcoin the network or Bitcoin the payment system; bitcoin with a lowercase “b” references bitcoin as a currency or bitcoin the currency unit.

Why Invest in Bitcoin?

It seems silly to some people that one bitcoin can be worth hundreds of dollars.

What makes bitcoins valuable?

Bitcoins are scarce and useful.

Let’s look to gold as an example currency. There is a limited amount of gold on earth.

As new gold is mined, there is always less and less gold left and it becomes harder and more expensive to find and mine.

The same is true with Bitcoin.

There are only 21 million Bitcoin, and as time goes on, they become harder and harder to mine. Take a look at Bitcoin’s inflation rate and supply rate:

In addition to being scarce, bitcoins are useful.

Bitcoin’s sound monetary policy is one of its most important features. It’s possible to see when new bitcoins are created or how many bitcoins are in circulation.

Bitcoins can be sent from anywhere in the world to anywhere else in the world. No bank can block payments or close your account. Bitcoin is censorship resistant money.

Bitcoin makes cross border payments possible, and also provides an easy way for people to escape failed government monetary policy.

The internet made information global and easy to access. A sound, global currency like Bitcoin will have the same impact on finance and the global economy.

If you understand the potential impact of Bitcoin, it won’t be hard to hard to understand why investing in bitcoin may be a good idea.

Bitcoin’s Price

There is no official Bitcoin price. Bitcoin’s price is set by whatever people are willing to pay. Buy Bitcoin Worldwide’s is a good resource for the current and historical price.

Bitcoin’s price is generally shown as the cost of one bitcoin. However, exchanges will let you buy any amount, and you can buy less than one bitcoin. Below is a chart showing Bitcoin’s entire price history:

When is the right time to buy?

As with any market, nothing is for sure.

Throughout its history, Bitcoin has generally increased in value at a very fast pace, followed by a slow, steady downfall until it stabilizes.

Use tools like Bitcoin Wisdom or Cryptowatch to analyze charts and understand Bitcoin’s price history.

Bitcoin is global and not affected by any single country’s financial situation or stability.

For example, speculation about the Chinese Yuan devaluating has, in the past, caused more demand from China, which also pulled up the exchange rate on U.S. and Europe based exchanges.

Global chaos is generally seen as beneficial to Bitcoin’s price since Bitcoin is apolitical and sits outside the control or influence of any particulate government.

When thinking about how economics and politics will affect Bitcoin’s price, it’s important to think on a global scale and not just about what’s happening in a single country.

Quick Info – Top Exchanges

How to Invest in Bitcoins and Where to Buy

The difficulty of buying bitcoins depends on your country. Developed countries have more options and more liquidity.

Coinbase is the world’s largest bitcoin broker and available in the United States, UK, Canada, Singapore, and most of Europe.

You can use our exchange finder to find a place to buy bitcoins in your country.

How to Secure Bitcoins

As with anything valuable, hackers, thieves, and scammers will all be after your bitcoins, so securing your bitcoins is necessary.

If you’re serious about investing in bitcoin and see yourself buying a significant amount, we recommend using Bitcoin wallets that were built with security in mind.

  • Ledger Nano X – Ledger is a Bitcoin security company that offers a wide range of secure Bitcoin storage devices. We currently see the Ledger Nano X as Ledger’s most secure wallet. Read more about the Ledger Nano X.
  • TREZOR – TREZOR is a hardware wallet that was built to secure bitcoins. It generates your Bitcoin private keys offline. Read more about TREZOR.

Bitcoins should only be kept in wallets that you control.

If you leave $5,000 worth of gold coins with a friend, your friend could easily run off with your coins and you might not see them again.

Because Bitcoin is on the internet, they are even easier to steal and much harder to return and trace. Bitcoin itself is secure, but bitcoins are only as secure as the wallet storing them.

Investing in bitcoin is no joke, and securing your investment should be your top priority.

Should you Invest in Bitcoin Mining?

The Bitcoin mining industry has grown at a rapid pace.

Mining, which could once be done on the average home computer is now only done profitably in specialized data centers.

These datacenters are warehouses, filled with computers built for the sole purpose of mining Bitcoin. Today, it costs millions of dollars to even start a profitable mining operation.

Bitcoin miners are no longer a profitable investment for new Bitcoin users.

If you want a small miner to play around with mining, go for it. But don’t treat your home mining operation as an investment or expect to get a return.

Final Thoughts

It’s important to understand how Bitcoin works before investing any money.

Bitcoin is still new and it can take months to understand the true impact Bitcoin can have on the world.

Take some time to understand Bitcoin, how it works, how to secure bitcoins, and about how Bitcoin differs from fiat money.

The above information should not be taken as investment advice. It is for general knowledge purposes only. You should do your own research before buying any bitcoins.

Things To Know Before Investing In Cryptocurrencies

Introduction

If we are talking about the future of the cryptocurrencies, then it is still unclear what potential value these currencies hold. When the first cryptocurrencies came into existence, it was considered to be a fad. Since then a decade has passed nothing much happened with the fad rumors, instead, the cryptocurrencies have grown stronger.

These currencies have digital importance which is supported by blockchain technology and use a computer system to find its owners. With the rise in the popularity of the cryptocurrencies, many other currencies also surfaced up rivaling the bitcoin (The first cryptonoid currencies).

Things to know before investing in cryptocurrencies

It is very important to have detailed information about the platform you are about to invest in. you must also consider its future possibilities. Investments are made for the long terms so it is very important to have an idea on the future standing of the investment platform.

Here are things that you look into before turning towards the cryptocurrencies for the investment.

1. Cryptocurrencies Regulation

As cryptocurrencies do not have any physical form, governments all around the world do not trust its credibility. Still, it is being used in the trading field. This shows how beneficial it is to be trading with virtual currencies. This has made the governments think, and now the governments want to regulate this currency more thoroughly all over the world.

2. It is considered the best platform for alternative investment

After the financial crisis in 2008, the investor has been looking for an alternative for the alternative investment. This search was completed a year later when the bitcoin first made its appearance. At first, the investors were hesitant about its authenticity. But as time passes by, the popularity of the bitcoin increases. This made the investor turn to the cryptocurrencies for alternative investment.

3. You can use them for the business transaction

Cryptocurrencies have spread all over the trading market. These are even used in business transactions. This shows how popular cryptocurrencies have become in the trading market. Not only that you have even used it in the share market as well. There are many software and apps that can help you to do so. New Bitcoin App is the new sensation is used worldwide for trading platform.

4. It may cease to exist

As we know that the cryptocurrencies are the virtual figure. There is not a physical storehouse. Hence, if your computer crashes down or if there is a system failure, your crypto account will cease to exist and so will be your crypto account balance. If the user loses his private key then the crypto account is beyond recoverable. These currencies are digital money, so it is also prone to hackers as well.

5. It has an unpredictable market

The market of the bitcoin has always been an unpredictable one. You may never know what is going to happen in the bitcoin market. It can take sudden acceleration, on the other hand, it can also take a steep fall. When the bitcoin was first introduced, its evaluation was in one thousand parts of a dollar. The evaluation has peaked in 2020 and it was recorded more than $17000. At the times of writing, its current evaluation is just over $5198.

So, you can see how unpredictable and unstable this investing platform is. Hence, it is necessary to have the right precaution before going for investment.

Conclusion

Cryptocurrency is an unknown factor in the trading market. And with the unknown factors, comes uninvited risk. So, it is very important to have the basic ideas of what cryptocurrencies are and how they are treated in the field. This way you will be able to invest in them properly.

Investing In Bitcoin: Everything You Need To Know Before You Buy

Modified date: April 5, 2020

If you’ve never heard of Bitcoin you’re probably thinking it sounds a little suspicious and a little dangerous. Even if you have heard of it, you’re probably think the same thing. We’re here to try and dispel that theory and answer some of your questions about Bitcoin.

That being said, it’s much more complicated than we’ll get into today, but these are the basics.

What is Bitcoin?

Bitcoin is a currency designed to pay for goods and services, just like Euros or U.S. Dollars. But that’s where the similarities end.

Bitcoin, unlike a traditional currency, is:

  • Decentralized—no government or central bank controls the currency supply.
  • Digital—there are no physical Bitcoins or Bitcoin bills. The currency lives entirely online, tracked by blockchains, continuously growing groups of records that provide a complete history of each Bitcoin. (Imagine, for example, that you could use the serial number on a ten-dollar bill to look up every single time it changed hands.)
  • “Pseudo-Anonymous”—Bitcoins are tied to a wallet ID rather than your personal information, but this doesn’t make it entirely anonymous (more on that below).

Bitcoin was developed in 2008 by someone with the pseudonym “Satoshi Nakamoto.” This person published a paper discussing how Bitcoins could work and just a year later it started being traded and mined.

The reason people are so drawn to Bitcoins is the lack of middlemen and banks with hefty fees. Since it exists entirely online, your wallet ID (more on that later) is what is used in transactions, not your name and other information, unless you give it.

Is Bitcoin really anonymous?

No, Bitcoin isn’t actually completely anonymous. Talented hackers and government agencies have the means to track pretty much anything, including Bitcoin. Although Bitcoin transactions are randomly transmitted over the peer-to-peer network (making it seemingly anonymous), this system doesn’t always hold up.

Bitcoins can also be linked to real identities if those identities are used in combination with the Bitcoin addresses in some way. This includes addresses used to deposit or withdraw money to or from an exchange or wallet.

How do you get Bitcoin?

You can buy Bitcoin with cash

You can buy bitcoins with hard cash, credit or debit cards, and wire transfers. But first, you’ll want to establish a bitcoin “wallet,” which will be where your wallet ID is derived from. This is just a place to store your bitcoins, just like your wallet holds your cash and credit cards.

The main options are: (1) a software wallet stored on the hard drive of your computer, (2) an online, web-based service or (3) a ‘vault’ service that keeps your bitcoins protected offline or multisig wallet that uses a number of keys to protect the account.

Each has their pros and cons, but the first two have the most drawbacks. You’ll want to back up your computer regularly if you store bitcoins on your computer and online services are susceptible to hackers.

If you’re an everyday user, these online services are your best option, as long as you don’t need complete anonymity and don’t mind the long setup procedures. However, some people believe that this erases the point of Bitcoin and its anonymity.

You’re probably wondering how much a single bitcoin is worth. That’s a hard question to answer because it fluctuates constantly. At the time of writing, Bitcoin is worth $10,350 US dollars (an all-time high).

You can “mine” it

Bitcoin mining is like digging for gold online—hence the reason it’s called “mining”. With paper money, a government decides when to print and distribute money, but Bitcoin doesn’t have a central regulator, which is what allows anyone to start mining.

Bitcoin miners use a special software to solve math problems (your computer must correctly come up with the right combination of 64 digits) and are issued a certain number of Bitcoins in exchange for solving them correctly.

But don’t worry, there’s not an endless amount of Bitcoins just floating around out in cyberspace. Once there are 21 million in existence, there can’t be any more.

These puzzles aren’t easy to solve and, as I said above, do require a special software. It’s so difficult, that many people can’t accomplish it entirely on their own. Instead, “mining pools” have arisen, where groups split their computing power and, once the puzzle is solved, the winnings are divided based on the amount of computing power each contributed to the calculation. Don’t think that mining Bitcoin is an easy way to get rich. It’s possible you would need to spend more on specialized computer equipment than the Bitcoin you could mine would be worth!

This mining process probably sounds highly illegal, but it’s not—at least in the United States (international laws differ in their treatment of Bitcoin).

That said, laws regarding Bitcoin are still evolving and the use and distribution of it is not regulated and is still fairly risky, especially when it comes to taxes.

But where the biggest issue arises is in the purchases people make with bitcoins.

How can you use Bitcoin?

“…using bitcoin to purchase well-natured goods and services is not illegal. However, those who mine bitcoins and trade them for traditional currency or operate exchanges on which bitcoins are bought and sold are labeled “money transmitters” and could be subject to special laws that govern that type of activity.”

This doesn’t include the fact that many people use bitcoins to purchase things on the dark web. Drugs and gambling are among the most popular uses for Bitcoin.

So where can you use Bitcoin legally? Probably in more places than you’d think. Microsoft, Dell, REEDS Jewelers, and a few airline sites all accept Bitcoin as a legitimate payment.

Also, the easiest way to get your bitcoins turned into cash is via gift cards. For U.S. customers, places like Gyft, eGifter, and GiftCardZen offer many options. Typically, you can use these gift cards at places like Amazon, Walmart, and Target.

Is Bitcoin safe to use?

Just like thieves steal your wallet, hackers will be after your Bitcoins, so it’s important to make sure your store it in a safe place.

We mentioned Bitcoin wallets above, and getting one is among the more secure ways to store and use Bitcoin.

Ledger is a Bitcoin security company that offers a range of Bitcoin storage devices. The Ledger Nano S is Ledger’s most secure wallet.

TREZOR is another option. It’s the original hardware wallet that was built to secure bitcoins. It generates your Bitcoin private keys offline.

Should you invest in Bitcoin?

Now that you know the basics of Bitcoin, you may be wondering if it’s the right investment for you. There are a couple things to consider before you take the plunge.

Mining Bitcoin is expensive

If you’re thinking of actually attempting to mine Bitcoin, you could be spending a lot. Unless you’re a serious computer genius, you’ll need to buy software that will calculate the complex 64-digit codes that lead to a single bitcoin. This software is not cheap—typically it ranges in the thousands (although, there are some sketchy free or cheap options). In addition, you’ll need to consider the actual cost of Bitcoin, which, as I said earlier, fluctuates constantly. While the price appears to be climbing, who’s to say it won’t suddenly decrease in price again.

Bitcoin is not regulated by an agency

If you want to invest some of your savings into Bitcoin, know that it’s not like investing in the stock market, and owning Bitcoin is not like having cash in the bank.

Bitcoins are not traded on Wall Street and can’t be bought or sold through a brokerage. So everything is up to you. Due to its unregulated nature, Bitcoin fluctuates constantly in price, more so than other currencies. There are certainly a lot of safer investments than Bitcoin that you should consider if you’re risk averse. It also has no tangible value like gold—therefore, Bitcoin is worth exactly what people perceive its worth to be, which can be a little scary.

Demand is high

Since there is a limited amount of Bitcoin, and after 2040, no more will be created, getting in on the ground floor can be a great idea (not to mention, it’ll help diversify your portfolio).

It has also been rumored that Bitcoin will someday (and maybe even someday soon) be bought by governments to be held as reserves just like gold. While this could have a lot of negative ramifications, it also means the limited Bitcoins would suddenly be in very high demand.

Buying and holding Bitcoin

Buying Bitcoin and holding onto it in hopes it will appreciate in value, is the most common form of “investing”. As with all investing, you should never invest more than you are willing/able to lose. This is especially true with Bitcoin, since it’s still a very risky investment.

The most important thing to keep in mind when buying Bitcoin is to make sure to buy only from exchanges that have proven their reputation.

Another key tip is to make sure you don’t buy all of your Bitcoins in one trade. Instead use a dollar cost averaging method—buy a fixed amount every month, week or even day throughout the year. This ensures that you buy the most Bitcoin when it’s on the rise, and less when it’s going down in price.

Bitcoin alternatives

Although the most well-known, Bitcoin isn’t the only cryptocurrency. Let’s take a look at some of the other major players.

Ethereum

Unlike Bitcoin, Ether can only operate through its own network—Ethereum. There is a limited amount of Ether, that was generated during their 2020 “presale.” 60 million were created during this time.

Ether is not necessarily intended for day-to-day use like Bitcoin. It can be used by application developers as a currency on the Ethereum network. It’s used for things like ride-sharing, betting and investments.

Price at the time of publishing: $473.90

Litecoin

Litecoin, as its name suggests, is a simple form of Bitcoin. Anyone can mine Litecoin using their home computers. According to their site, Litecoin is “a peer-to-peer currency that enables instant, near-zero cost payments to anyone in the world.”

Like Bitcoin, you can get Wallets for your Litecoin to keep it secure from hackers.

Price at the time of publishing: $97.22

Summary

Bitcoin has become increasingly popular due to its relative anonymity—which allows for legally-questionable purchases. But it can be used for every day, legal purchases as well. Via gift cards and “wallet” exchanges, you can buy items for Walmart or Amazon, and even buy discount plane tickets. The cyrptocurrency is also quickly becoming a mainstream investment option—one that the average investor has to take note of.

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