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5 Things To Know Before Investing In Bitcoin

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Thinking of investing in Bitcoin?

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

We’re going to explain:

Note: If you don’t need the details and just want to buy, Coinbase is the easiest way to buy in the USA, Canada, and Europe.

Why Bitcoin is Gaining Traction

The world is becoming ever more reliant on the internet.

So, really:

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:

bitcoin inflation rate

In addition to being scarce, bitcoins are useful.

Bitcoin provides sound and predictable monetary policy that can be verified by anyone.

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. CoinDesk’s price index is a good resource.

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:

bitcoin 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.

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

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.

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Cryptocurrencies

Assange Thanks US Govt For His 50,000% Gain On Bitcoin As Russia Unveils ‘CryptoRuble’

My deepest thanks to the US government, Senator McCain and Senator Lieberman for pushing Visa, MasterCard, Payal, AmEx, Mooneybookers, et al, into erecting an illegal banking blockade against @WikiLeaks starting in 2010. It caused us to invest in Bitcoin — with > 50000% return.

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Once again the unintended consequences of government intervention are exposed

In 2010 – following the release of sensitive government documents related to wars in Afghanistan and Iraq – John McCain and Joe Lieberman led a bipartisan attempt to cut off WikiLeaks funding by forcing ‘traditional’ payment systems to block them.

image courtesy of CoinTelegraph

7 years later and the price of Bitcoin has… risen…50,000%!

And Julian Assange chose yesterday to thank the US government and its corporatocracy for his forced investment…

As CoinTelegraph concludes, Wikileaks has been on the forefront of revealing government corruption, and Assange has lived as a fugitive in the Ecuadorian Embassy in London since 2012. With all the antigovernment rhetoric, it’s no wonder Assange is not friendly with pro-government fiat currencies. Wikileaks and its founder represent the sort of non-governmental control that Bitcoin is founded upon.

And while governments around the world play ‘pass the hot potato’ with their regulatory crackdowns on cryptocurrencies, it appears – after denouncing Bitcoin earlier in the week – that Russia has accepted the inevitability of digital currencies… and created its own.

As CoinTelegraph reports, Russian President Vladimir Putin has officially stated that Russia will issue its own ‘CryptoRuble’ at a closed door meeting in Moscow, according to local news sources.

The news broke through Minister of Communications Nikolay Nikiforov.

According to the official, the state issued cryptocurrency cannot be mined and will be issued and controlled and maintained only by the authorities.

The CryptoRubles can be exchanged for regular Rubles at any time, though if the holder is unable to explain where the CryptoRubles came from, a 13 percent tax will be levied.

The same tax will be applied to any earned difference between the price of the purchase of the token and the price of the sale. Nikiforov said:

“I confidently declare that we run CryptoRuble for one simple reason: if we do not, then after 2 months our neighbors in the EurAsEC will.”

While the announcement means that Russia will enter the cryptocurrency world, it is in no way an affirmation or legalization of Bitcoin or any other decentralized cryptocurrency. On the contrary, Putin quite recently called for a complete ban on all cryptocurrencies within Russia. The statement from Putin seemed apparently to contradict the earlier comments from other ministers who seemed pro-crypto, but only with regulations, as well as Putin’s recent meetings with Buterin and others.

Now, with the issuance of the CryptoRuble, the apparent contradiction has been made clear.

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Cryptocurrencies

Torrent Website Offers Users Rewards for Cryptocurrency Mining

A torrent downloads website has started offering visitors the option to enable a cryptocurrency mining feature and earn incentives for the platform, according to a TorrentFreak report.

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A torrent downloads website has started offering visitors the option to enable a cryptocurrency mining feature and earn incentives for the platform, according to a TorrentFreak report.

The news indicates a possible shift in tactics by torrent websites, after a number of popular services have been found to have installed hidden cryptocurrency mining code that harnesses visitors’ computer processing power without seeking permission.

Some, such as The Pirate Bay, have notably failed to inform site visitors that their CPU was being used by the miner, a strategy that led domain supplier Cloudflare to classify the undisclosed process as “malware” and remove the domains of torrent site ProxyBunker for also hosting mining code.

TorrentFreak added that the unnamed “private tracker,” an invite-only torrent site, has not only made this feature optional, but it also incentivizes members to let their CPUs be used for cryptocurrency mining by offering “upload credit” in return.

A resource that members require in order to download content, upload credit must usually either be purchased or generated from – as the name suggests – uploading new content. The new system allows visitors to minemonero and then trade it in for the credits.

The tech news source further cites an increasing number of torrent websites now using more transparent models that allow visitors both a choice in the cryptocurrency mined and a way to track the process.

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Cryptocurrencies

Ripple Is Starting to Attract Mainstream Finance Clients

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Ripple has signed up several new financial institutions to its blockchain network, bringing its clientele to more than 100.

The financial technology start-up is the owner of XRP, the third most valuable cryptocurrency behind rivals bitcoin and ethereum, according to data from CoinMarketCap.

Its distributed ledger network, RippleNet, has been joined by the likes of United Arab Emirates (UAE)-based lender RAKBANK and U.K.-based currency exchange firm IFX. It has also cleared a payments path into South America by signing up online payment provider dLocal.

Blockchains are huge encrypted groupings of data dispersed across the globe that record information on digital currency transactions. People are able to exchange digital assets across these distributed ledgers without friction as they are not governed by intermediaries such as governments and central banks.

read the rest at CNBC.com

 

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