Deciding how to invest in Bitcoin can be overwhelming, as the cryptocurrency has been gaining steam for years now and shows no signs of slowing down.
While there are many options on the table when it comes to Bitcoin investment strategies, the most important thing to do is choose one that’s right for you and your goals rather than simply following the crowd.
By learning more about how to invest in Bitcoin and why people choose certain strategies over others, you can be sure that you’re investing in this cryptocurrency in the best way possible.
Why invest in Bitcoin?
Bitcoin is an increasingly popular cryptocurrency that utilizes blockchain technology to facilitate transactions.
Basically, a user obtains a Bitcoin wallet that can be used for storing bitcoins and both sending and receiving payments.
The blockchain technology used by Bitcoin is really just a shared public ledger that is used by the entire public network.
The technology used is secured through cryptography, a branch of mathematics that provides a highly secure means of facilitating and recording transactions on the network.
Cryptocurrency offers an intriguing mix of financial and technological challenges for technical users – you’ll have fun learning deeply about encryption and data structures.
In short, it’s like a puzzle. Solving puzzles makes you smarter. And investing in cryptocurrencies has historically been very profitable (though risky).
If you’re looking for something new to learn and want to get into cryptocurrencies, Bitcoin is probably your best bet right now.
What are the downsides of investing in Bitcoin?
There are a few reasons why you might not want to invest in bitcoin. It’s risky, relatively volatile, and its value is driven almost entirely by speculation. There aren’t many places where you can use it right now (and actually buy something).
The bitcoin market is very new, and there are huge price swings. Many people have lost money because they invested at peak levels just before those big price drops.
In addition, investing requires education: you should be educated about what a cryptocurrency is and how they work. If something sounds too good to be true, it probably is.
And finally, of course: no investment with high risk comes without higher returns.
Where to buy Bitcoin?
Although you can easily buy Bitcoin using your regular, dollars-and-cents bank account, not all exchanges support fiat money transfers.
For example, Coinbase doesn’t accept deposits from banks outside of North America and Europe. If you don’t have a U.S. or European bank account, consider buying Bitcoins with cash on LocalBitcoins.
The site pairs up potential buyers and sellers in your area; you meet up with them face-to-face to make the exchange.
To ensure your bitcoin remains safe from hackers, it’s important to practice security measures. Here are some tips for keeping your money protected:
- Practice good password habits and never share passwords.
- Create a unique password for each account and use a combination of letters, numbers, symbols, and upper and lowercase letters.
- Avoid writing down passwords or saving them on your computer or phone; if you must write them down, make sure they’re encrypted with a tool like 1Password or LastPass.
- Also, avoid using obvious passphrases like password,123, or letmein. These can be easily guessed by hackers who use brute force methods to access accounts.