Bitcoin is a digital currency that uses encryption technology to regulate the generation of units of currency, verify the transfer of funds and operates independently of central bank regulations. Simply put, it’s a cryptocurrency.
The currency exists electronically as a code and its movement can only occur after necessary confirmations and encryptions are done. This would result in a private record showing only the technical information, amounts sent, and public addresses from and to where the coins are sent.
This is all recorded in blockchain, a digital distributed ledger where every transaction ever made is kept. Blockchain is also maintained by nodes around the world who have an original copy of the code and can verify every event.
Since its introduction in 2009, Bitcoin has undergone a lot of improvement that has made it a darling of many investors.
Bitcoin has claimed the interest of investors. Almost every investor now considers Bitcoin a viable business as its profits and benefits are considered higher. Bitcoin is open to everyone and provides an exciting opportunity for them to delve in new assets. One of the common form of investing in Bitcoin is buying currency hoping that it appreciates in value. You may also want to sell the currency. It looks promising but may be a complicated and a risky venture.
Bitcoin has a sound and predictable monetary policy that is verifiable. You can see clearly the new Bitcoins created or how many that are in circulation. But the fluctuations of the Bitcoin values and prices have proved very challenging. The price is set by whatever people are willing to pay.
As such, investing in this cryptocurrency calls for serious considerations of the risks and the available options before venturing on it. It requires strong analytical skills and the ability to study and understand the trends and predict correctly the behavior of Bitcoin price chart.
So should you invest in Bitcoin?
Sadly, Bitcoin investment is not for the fainthearted. Bitcoins valuation fluctuation is to blame. The value of the cryptocurrency may change significantly even in a single day, which would mean a loss to you. Bitcoin price varies daily and with hundreds of USDs.
In December last year (2017), Bitcoin price falls by over 26%. The price of a coin was $18,936; the price later fell to $14,048 by end of December. The price would later fall to $8000 in January 2018. In February 2018, it further fell to 7,574.20 USD.
Bitcoin is also faced by other risks like hacking. It is only last year, when a Korean cryptocurrency was almost declared bankrupt after it was hacked two times in a row. Moreover, there reports that several cryptocurrency exchanges and miners have lost over $60m worth of Bitcoins.
So, frankly speaking, the short and the long of all these is that Bitcoin investing is such a risk. It needs serious thoughts before you can engage in it. But it’s not just risky, it’s also beneficial. Is only that it has a lot of risks. If you fully understand its operation, don’t be surprised if you become a millionaire in less than a month.
So in answering the question who should invest in Bitcoin, the answer is simple, its opened for everyone. But to only those that are prepared for the uncertainty that comes with such investments. It’s tricky, if you learn adequately about Bitcoin and made proper decisions on your investments, then you won’t regret.
And so, should you proceed to invest in Bitcoin? The answer definitely lies with you. Once you fully understand what Bitcoin is, risks and benefits, as an investor, you will in a better position to make a personal decision.
When should someone invest in Bitcoin
The need for proper preparation, to sellers and buyers of Bitcoin cannot be wished away. Just like it is with any business, the idea here is to buy at a low price and later sell at a higher price.
The only time we would say it’s appropriate for you to invest in Bitcoin, is when you fully understand its assets. When you have fully understood the advantages and disadvantages of Bitcoin, only then can you be ready to invest in it.
Ideally, you should buy Bitcoin when the dollar exchange rate low, then you only want to wait for the exchange rate to rise before you can sell. The problem comes with the volatility of the prices and the market, its not easy to predict a fall or rise in an exchange rate. That is why we say, you must be fully persuaded that you have understood the system before you can invest.
You only can survive in the business when you go prepared for losses, as such you only want to put the money that you can survive without in Bitcoin
What are some of the best Bitcoin exchanges in the market?
Every other Bitcoin investor would love to know the answer to this. It is not easy to decide on the best exchanges. But at least you should know some of the parameters you can use in settling on a Bitcoin exchange.
Here is a list of some few factors you can consider as you settle on a Bitcoin exchange
- High liquidity
- Good user ratings
- Whether or not customers are satisfied
- Whether they provide transparent data of coins’ transactions
- Whether they allow for variety of options in buying Bitcoin e.g. PayPal, credit card
- Whether or not its welcoming to beginners
- Security of the website
- Transaction fee rate
- Currency exchange available
It’s quite a task choosing an exchange. Several exchanges have faced security concerns in the past. Some cryptocurrency exchanges have faced bankruptcy while others just failed. Its therefore wise that you choose a good cryptocurrency exchange.
Having considered the above factors, we come with a list of some possible best exchanges
- a) Coinbase
- b) Coinmama
- c) Bitfinex
- d) Kraken
- e) Bitstamp
- f) CEX. IO
- g) Bittrex
These were among the best exchanges that we would recommend for you. You can still explore more.
How do you invest in Bitcoin?
Investments in Bitcoin come in two primary investment ways; mining and trading.
Before we discuss each, it’s important you have a crypto wallet like breadwallet, mycelium or blockchain info, so you may store and interact with any cons you acquire
These are easily downloadable apps in appstore or google store. They are on different platforms like the web browser, desktop, mobile, even hardware and printable wallets.
Once this is done, you are good to go, you can sell or buy Bitcoin as you wish
Briefly on the ways to invest in Bitcoin
This is a process that involves transactions that are verified and added to the public ledger, blockchain. It also involves the process through which new Bitcoins are released. It involves the compilation of the recent transactions into blocks and then try solving a computationally difficult puzzle.
It is the participant that solves the puzzle that claims the reward and can then move to the next block in the block chain. The reward is in form of both transaction fees associated with the transaction compiled in the block as well as the newly released Bitcoin.
As to how hard the puzzles involved in Bitcoin mining are is dependent on the effort being put all across the network. This because the difficulty of mining can always be adjusted. The difficulty adjust itself to keep the rate of block discovery constant.
However, maintaining mining rigs is expensive and requires constant updates, as ASIC miners become obsolete quickly. As such, your earnings won’t be significant ad if you were trading with Bitcoin
This is where the big deal is when it comes to the Bitcoin market
Here is a guide on how to go about in trading Bitcoin
- 1.Choose a Bitcoin exchange
- open a trading account with the Bitcoin exchange
- Deposit funds (flat or cryptocurrency) to your created account through any method allowed by the Bitcoin exchange. Some allow wire transfers, credit and debit cards
- once you are done with this, then you can start filling your investments amount by buying orders of your own price
- Anytime you buy Bitcoin, it will be stored in your account
- when you sell Bitcoin, the payments are stored in your account
- Withdrawing funds from your account need a crypto wallet address so you can send the funds to it
It is advisable not to leave your funds in your exchange. You can consider moving them to your personal wallet where you are in control of them.
It is important to understand how Bitcoin works. Take some time to understand Bitcoins, how it works, how to secure Bitcoins, and about how Bitcoin differs from flat money.
Bitcoin is never an easy deal. Sometimes your higher earnings you procured may be crushed within a very short time. Proper interpretation of the Bitcoin price chart is the secret to preventing this.
How to earn Bitcoin
There are many ways to earn from your investments in Bitcoin today than they were a few years ago. That possibly is the reason its popular today.
We will briefly discuss some points, that are not directly linked to Bitcoin trading, on how to earn Bitcoin that can still be introduced into the market.
The primary methods to earn from Bitcoin other than mining and trading are;
a) Completing online task
Definitely, this is the first contact people have in the market. There are several websites that will pay you just for watching adds and doing some simple online tasks like answering questions or completing analytical tasks.
The coins you get are never many as one would expect, but it’s still worth your time. How about if you never got anything at all. But, you must be careful to work with reputable sites.
b) Interest payments
Another way to earn Bitcoins is by lending them to others. You can offer direct lending to someone known or through websites which facilitate peer to peer lending where borrowers and lending meet, or lending Bitcoins to other websites that act as banks where you can earn yourself an interest rate from the deposited Bitcoins.
Such website includes among others bitbond, bitlendingclub, BTCjam. You must be careful to assess the reliability of a website before engaging it
c) Providing a service
Another interesting way to earn Bitcoin is by getting paid for a service you provided on Bitcoin.
Not only will this earn Bitcoin, you will also help it establish itself as a legitimate medium of exchange
You can inform other customers through social media or a poster that you are accepting Bitcoin payments and leave your public address or QR code for anyone to pay you or tip you with the cryptocurrency.
This is another way of earning Bitcoin. Its however not the best way to earn Bitcoins. It has a lot of associated risks and therefore we may not advise you go for it. There are many casinos that offer different options like online lotteries, jackpots, spread betting, casino games among others to Bitcoin players. it is, however, advisable you stay away from gambling.
e) Accept Bitcoins as payment
Another way to earn Bitcoins online is to sell something for crypto. If you are keen on handmade you can accept BTC on your ETSY page, and if you are a merchant you think about using your Bitcoin address to accept Bitcoins payments on your website. You can also inscribe or escribe a “Bitcoin accepted here” tag in your hotel, shop or café.
f) You can also make Bitcoins your regular income
Currently, there are different organizations and companies that pay their employees in Bitcoins.
Buy & sell Bitcoin
Regardless of whether you want to sell or buy Bitcoin, you will need to know when to do it.
Have a right timing is crucial for any form of investment. However, in Bitcoin investment, this advice becomes a primary rule to thanks to its volatility and the chance this brings for both vast profits and massive losses.
In order to know when to buy or sell Bitcoin, you will need to procure a Bitcoin price chart and study it wisely. Make good use of those indicators (again, be prepared)
You should draw parallel lines to channel the Bitcoin price and establish three crucial things:
1.The current trend
The current trends can help you predict the possibility of the value of Bitcoin to fall or climb, thus altering resistance and support levels. On the other hand, resistance and support levels give you the approximate minimum and maximum respectively.
Ideally, the closer you get to a resistance level, the better it is to sell as it ensures you do so at a high price, possibly the highest before it starts to fall. Different to this, as you approach the support level, the stronger is the urge to buy, to secure the lowest Bitcoin price.
The idea behind the parallel lines is to know whether these resistances and supports prices are likely to decrease or increase, so you may hold them and see if you can figure above or below the resistance or support.