What Is Bitcoin And Should I Invest In Bitcoin?

by Amazing Payday Loans Content Writer
In simple words, Bitcoin is a digital currency or a crypto currency that uses rules of cryptography for generation and regulation of units of currency. So, before you plan to invest in Bitcoin it is important that you first understand what it is actually and if it will turn out to be a good investment in the long run.

How Actually Bitcoin Works?

Bitcoins are virtual coins designed to be ‘self-contained’ for their value with no need for banks to store or move the money. When you own bitcoins, they possess value and you can use them to trade just as if you had nuggets of gold in your pocket. They can be used to purchase goods  and services online. On the other hand you can also tuck them away, hoping that their value will increases over the years. Bitcoins can also be traded from one personal ‘wallet’ to another. A ‘wallet’ is a personal database that can be stored on your Smartphone, computer, tablet, or somewhere in the cloud.

So Should One Invest In Bitcoin?

Like any other type of investments, buying Bitcoin can be a risky business. Making such investment is still very much a gamble. So, if you decide to invest then you should know that your Bitcoin investment might lose money. So, be prepared to face such prospect. If not then Bitcoin investment might not be the right thing for you.

Apart from being a risky investment, there are other types of risk that you should keep in mind if you plan to invest in Bitcoin. One major risk in of a cyber attack.

How To Invest In Bitcoin

Now that you are aware of the risks but still willing to take the plunge, there are a few things that you need to know about investing in Bitcoin. Cryptocurrencies exist in an unregulated, decentralized digital sphere where there is no involvement or protection offered by any central bank. Anyone can buy and sell cryptocurrency anonymously and there are very few middlemen taking a cut of transactions. But it cannot be bought via any mainstream investing tools like a brokerage account.

You can get started by buying fractions up to the eighth decimal place of Bitcoin. The best way is to set up a cryptocurrency wallet. Some of the best known websites where you can do this are Bitstamp, Coinbase, and Bitfinex to name a few.  First of all establish an account and then get  it connected to your payment source-your bank account or your credit or debit card, followed by two-factor authentication. Make sure you use tool like Google Authenticator to avoid vulnerability to cybertheft. Once you have purchased a Bitcoin it will stay in your digital wallet until you have traded it.

Is Bitcoin A Long-Term Trusted Store Of Value?

Whether you should invest or not in Bitcoin completely depends on if you think Bitcoin will become a long-term trusted store of value. If it does not become a long-term trusted store of value, the price will fall down to zero. If you thing it has at least 10% chance of becoming a long-term trusted store of value, it can be a good investment with an expected return. If you think chances are less than 1% then you should not invest.

Just like other collectibles and store of value, the value of Bitcoin is actually what others think it should be. So, whether you want to invest in Bitcoin or not is completely up to you. With no definite future and price of Bitcoin rising ten-fold yearly, investing in Bitcoin can be incredibly risky. Thus, if you do invest be prepared to lose all of it.

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About Amazing Payday Loans Freshman   Content Writer

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Joined APSense since, June 16th, 2014, From Edmonton, Canada.

Created on Dec 18th 2020 01:15. Viewed 713 times.


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