Are you planning to invest in Bitcoins for the first time? You are not alone. Many are choosing to explore the Bitcoin investment arena for the first time and are unsure of where to start. Even though Bitcoin has been around since 2009, and many people have been using Bitcoin for everyday purchases, the thought of dipping your feet into this expansive industry without having enough information under your belt can be quite a challenge.
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You need to know that bitcoin is currently the most valuable cryptocurrency in the digital market. According to https://www.forbes.com/advisor/investing/top-10-cryptocurrencies/ Bitcoin (BTC) tops the list of cryptocurrencies with a market cap of over $ 856 billion as of August 2021.
If you are thinking of buying bitcoin online, here are three important things you need to know first.
- Have You Done Your Research?
Before you invest a significant amount in buying bitcoins, make sure that you do your research. Bitcoin is a lucrative investment that can give you a higher return but take time to learn the basics so that you are well informed of the risks and the value propositions.
Read widely on the topic. Join community forums and listen to podcasts. Visit the Chron website and read what they have published so far. If covid restrictions have been lifted in your area, and there are local meetups available, join in, and listen to other bitcoin investors. You can also attend virtual cryptocurrency conferences at the comfort of your home.
One common term you will come across as you do your research is that bitcoin is transparent. But what does that mean? Well, bitcoin operates in such unprecedented transparency levels that many people are not used to. This transparency can be attributed to the underlying distributed ledger technology and blockchain that bitcoin has heavily invested in.
All bitcoin transactions are public, immutable and traceable meaning that they are stored publicly on the bitcoin blockchain. Once you buy your bitcoins online, the information is automatically updated and broadcasted for everyone to see. However, you need to know that bitcoin addresses are created privately by each user.
These addresses are private information as they are used when determining where the bitcoins have been assigned. However, as a bitcoin user, you need to remember that addresses cannot be left completely anonymous and therefore, you will be required to identify your identity before you receive goods and services.
To protect yourself while online, be sure to create a new bitcoin address each time you receive a new payment. Also, have multiple wallets for different transactions. This will enable you to isolate each business so that fraudsters find it impossible to relate your businesses altogether. When people send you money, they will not be able to view your other bitcoin addresses and this will go a long way in protecting your privacy.
- Consider Why You Are Buying and Where You Will Buy Your Bitcoins
Even before you buy your bitcoins, you need to know why you are buying them. Do you want to buy bitcoins to buy things online or make international transactions? Or do you want to start accepting bitcoins as a mode of payment at your business? Do you value the decentralization of currency? Then buying bitcoins is a perfect idea for you. You also need to know how and where to buy bitcoins. Currently, there are so many platforms and bitcoin exchanges to buy bitcoins from. However, you need to know which ones are reliable and reputable to avoid losing money. Do enough research and if possible, talk to a bitcoin expert.
When buying bitcoins, it is also important to know your country’s regulations and laws regarding the sale of bitcoins. A bitcoin exchange that is based in your country is always highly recommended. Also, check if the exchange accepts multiple currencies. Before you engage with any exchange, make sure that you read the fine print and understand what they do or do not accept.
- Consider Your Risk Tolerance
The last but not least factor to consider when buying bitcoin online is your risk tolerance. How much you are willing to spend buying bitcoins goes hand in hand with your tolerance for risk. Bitcoins are volatile and transparent; while this means that some investors have over the years collected unprecedented returns, others have been left with losses they never expected to deal with.
As you start your journey to buying bitcoins online, be patient and keep it simple. Don’t force trades as they can result in losses. Instead take time to learn all the terms and remember, the market is open 24/7, thus if you miss one trade setup, do not worry as another opportunity will arise when you still have your capital.