There’s a new kind of money in town and it’s called Bitcoin like un peso 1971 coin value. It might not be as well-known or accessible to the public as some other assets, but many experts are predicting that this digital currency could prove to be more than just a flash in the pan. Bitcoin is an asset worth taking seriously. In this post, we break down how to get started with buying and investing bitcoins and offer our advice on how you can make sure your investments are secure (and profitable!).
1. Create a Bitcoin Wallet
The first thing you need to do is create a wallet to store your bitcoins. Bitcoins are sent and received through digital wallets where they can be stored on your computer or downloaded onto your mobile phone. While some wallets are free, there are many that charge transaction fees when sending money. Compare the cost of different wallets before you download one, as this is a good indication of how much the service will cost you over time. For example, Blockchain allows for free transactions for personal wallets but charges 2% for commercial use.
2. Understand the Currency
Understanding exactly how Bitcoin works is key to understanding how it works. Its value is derived from the amount of goods and services people are willing to be paid for in the currency. The total number of bitcoins in circulation will never change, but its value can fluctuate due to supply and demand. The supply stays the same, meaning that new bitcoins will always have a value based on what others are willing to pay for them, but individuals can spend or trade their bitcoins based on individual confidence in the currency.
3. Understand Your Options
Once you’re comfortable with your wallet, it’s a good idea to look at other ways you can get some hands-on experience with Bitcoin before investing any money at all. The two ways to get involved with Bitcoin are through trading or by actually buying and holding.
4. Trading vs Buying
At the end of the day, there’s a big difference between being a trader and being an investor. When you trade bitcoins for other assets, chances are you’re going to at least make money because you’ll be in control of when trades occur and how much risk there is from each trade. When you buy bitcoins without owning them, however, there’s no guarantee of profit or loss but the chance of losing everything is small since it’s not in your control when deals take place.
5. Buy or Sell?
Don’t be tempted by the lure of getting rich quick. Buying bitcoins might feel a bit like gambling, but it’s not the same. People who gamble their own money on bitcoin trading are playing with fire. While there are platforms where you can buy and sell bitcoins, it’s usually part of more complex trading packages. If you’re just buying bitcoins, focus on getting hold of them and storing them safely in your digital wallet before you start buying or selling them on exchanges as investments.
6. Keep Your Bitcoins Safe
There are numerous ways to lose your bitcoin wallet due to theft or loss—but there are some safeguards in place so that doesn’t happen if possible. Before you get started, be sure to read our guide on securing your bitcoins.
7. Know the Taxman
Before investing any money in Bitcoin, it might be worth considering whether you’ll need to pay tax on your investments. Americans can expect to have to pay capital gains taxes as long as they’re holding their bitcoins for longer than one year, but if they’ve invested less than $600 into bitcoins in a year , they can use the wash sale rules to avoid paying capital gains taxes. For most other countries claiming Bitcoin income tax is not allowed, so be sure that you’re aware of how this will affect you before investing anything into the currency.
8. Trade With Confidence
Though Bitcoin is still relatively young as a currency, it’s making great strides as a reliable alternative to other currencies. Many people are investing their money in the currency because they trust its creators and see it as a possible future of money. This could be good news for investors who are willing to take risk whenever there’s the potential for profit. Investing your own money into Bitcoin makes you the one in control of when trades occur, so you’ll have more options if things go against you and less risk if they work out in your favor. Make sure to do your research before buying any bitcoins. The currency is still relatively new and there are some risks involved with holding bitcoin that you might not be aware of, but investing some money into the currency will allow you to get in on the ground floor of one of the most exciting innovations in banking.
It’s never been easier to get involved in Bitcoin. With a few easy steps you can be storing your bitcoins safely and buying and selling them on exchanges that process Bitcoin transactions on your behalf. Before investing any money, however, you should be aware of how the currency works. Because of this, it’s important to understand exactly what bitcoin is and what are its risks so that you can decide whether or not it’s something that you want to take risk with.