The cryptocurrency scene is booming, with plenty of different applications and coins to be aware of. One of the most popular coins around, which you have likely heard about, is Bitcoin. Like other cryptocurrencies, it operates on a technology called the blockchain. This is an open ledger that will record all online transactions. Bitcoin is useful for both investors and entrepreneurs. Many, don’t know where to start when it comes to purchasing online coins.
That’s why we have compiled this beginner’s guide on purchasing Bitcoin. This will be useful for any budding investor, or someone looking for more information on cryptocurrency in general. Let’s dive in.
Defining Bitcoin
There are now many different cryptocurrencies, and Bitcoin was the first. The first appearance of Bitcoin was back in 2009, and it quickly solidified itself as the most popular type of cryptocurrency. As we mentioned above, it works through the blockchain, as do all cryptocurrencies. Not only is it the most popular form of cryptocurrency, but it is also the most valued.
Bitcoin was known as the first decentralized digital currency. As such, it quickly became recognized as an international payment system. It was favorable with some buyers and sellers on the international scene, as they didn’t need to process the coin through a central bank or any third party.
Where To Purchase Bitcoin
There are a few different ways for you to purchase and even sell, Bitcoin. For many, they choose to purchase through a peer-to-peer marketplace. Bitcoin itself is a peer-to-peer network. You will purchase and sell with other people directly. The network nodes validate the sale and record it down into the blockchain.
As mentioned, there is no administrator or central bank that runs this. The decentralized virtual currency can be purchased through an exchange center. These sites, such as Paxful, will allow you to purchase with cash or PayPal. It’s worth checking out their website to see their advice on how to buy BTC with PayPal. Bitcoin would make a fine addition to your investment portfolio and helps diversify.
Understanding Cryptocurrency
It is also worth your time to understand cryptocurrency further. It works through the basics of cryptography, which helps secure digital transactions. Individuals can send and receive digital tokens that have monetary value without any centralized intermediary. The first cryptocurrency, Bitcoin, was invented by someone under the pseudonym Satoshi Nakamoto.
This digital currency simply doesn’t exist in physical form. It is entirely online based, meaning you won’t find it printed like traditional paper money. As it works completely online, it means it isn’t stored in any one place.
People first started considering the application as a means to send money digitally without needing to go through a bank or any system. As you can imagine, this was preferable for individuals, as they would be able to avoid potential transaction fees. It was also the hope that these transactions would be more private.
The Pros and Cons of Purchasing Bitcoin
Investing in Bitcoin gives you the chance to make great returns. There are also many other benefits. But it’s essential to understand the risks involved. Bitcoin can be an incredibly volatile investment, and you will have to keep an eye on the markets accordingly.
As mentioned, there are numerous benefits to Bitcoin, that allow investors and consumers alike to keep an eye on the coin. One benefit of purchasing Bitcoin is that it can often be cheaper to use as a means of payment. There will be low transaction fees applied, and you can trade in an international market, not hindered by currency. With traditional currency, you could be subjugated to inflation based on bank or government policies, which you will avoid with Bitcoin. It essentially offers more protection for investors.
It’s not all plain sailing, however. As Bitcoin is not yet mainstream as a currency, it means not everywhere will accept the coin as a means of payment. Since the coin operates outside of the central bank’s regulation, it means you won’t have that layer of protection, so you will have to be safe yourself.
Storing Your Bitcoin
You should be aware that there are multiple ways to store Bitcoin once you have purchased it. There are both online storage options, and offline. You may be confused, as cryptocurrency is entirely online. The hard drive option means you store your own Bitcoin onto a physical drive, and you can disconnect it and move it. This protects your key, as it will need to be accessed physically, and there are security features to protect your key and allow you to make purchases.
There are also online software storage options. This comes in the form of a software wallet, which you can access through your mobile phone. You will also be able to use your software wallet on a PC or laptop, through the website. This gives you more control over your wallet and gives you more access.
Consider what sort of wallet will be best for you when purchasing Bitcoin. You may decide that you want to mix and match the options, as a way to further protect yourself. You should consider asking other investors who know what they decided to do.
Investing In Bitcoin
As touched upon above, Bitcoin is useful for both investors and entrepreneurs. You should understand that, as with any investment, there is an element of risk. You shouldn’t treat Bitcoin as a way to make money quickly, as this will likely not work the way you think. Do your research, and take it seriously, and you will be able to make a great return on your investment.
Keep an eye on the coin as it grows in popularity. Bitcoin continues to grow in popularity and is slowly becoming more mainstream. There will continue to be opportunities to get involved in this asset.
Conclusion
You should start taking Bitcoin seriously as an investment. It has already changed the way that investors think about banking and investing in general. Be aware of the points we raised in this article before you purchase Bitcoin, and you should be good to go.
