Owning Bitcoin: A beginner’s guide

The crypto market saw a whirlwind of emotions after the vertiginous rise in the value of Bitcoin over the course of last year and then early January that after a few days plummeted back to earth. Bitcoin, the clear star child of cryptocurrencies, was able to reach a staggering value of $41,000 per unit. This had skeptics, cynics and spectators intrigued as they watched the dramatic scenes play out.

Physical version of Bitcoin coin aka virtual money. Conceptual composition for worldwide cryptocurrency and digital payment system called the first decentralized digital currency

For a while now, investor interest in bitcoin, and many other cryptocurrencies for that matter, has been growing tremendously. This has been due to a number of reasons. The decentralized structure, the pseudo-anonymous nature was always attractive to potential investors. However, the recent developments have fueled this frenzy even more.

Due to the ongoing pandemic and economic downturn, inflation rates are expected to go up with currencies facing devaluation. With Bitcoin, however, there are no such concerns because its scarce nature, only 21 Million Bitcoins in existence, allows bitcoin to retain its value. This makes it a great hedge against inflation like gold. And the prices skyrocketing was only the cherry on top, enough to push investors, beginners or seasoned, to buy bitcoins.

But since Bitcoin can be a nebulous topic, here is a guide to owning bitcoin.

Get A Digital Wallet

First and foremost, you will need something to hold your bitcoins when you eventually buy them. There is where digital wallets come in. Bitcoin wallets essentially allow users to store, send or even receive bitcoins from other people.

There are two types of wallets that can be used to store bitcoin: online wallets and hardware wallets. There are a number of online platforms that offer bitcoin wallets, the most popular perhaps being Coinbase, that can be operated from anywhere, anytime.

But if you’re buying bitcoin through an exchange and planning on holding a significant amount of cryptocurrency, opting for a hardware wallet may be considered to be a better option. Hardware wallets are generally smaller, offline computers that store the private keys of your bitcoin funds.

It is important to keep in mind, however, that a Bitcoin wallet does not come with any type of government guarantees. So, for example, if Coinbase goes under or your bitcoins are stolen or get lost (you either forget the password or misplace the hardware wallet), you will have very little recourse which means that you will probably never get your money back.

Once you’re able to get your hands on a digital wallet, there’s only one thing left to do: fill it up with bitcoins. Now, this task can actually be achieved in a number of ways that have been discussed below.

Buy Bitcoins From An Exchange

This is perhaps the most straightforward way to land your very own bitcoin, but it is also considered to be the least anonymous option.

Crypto Exchanges allow for the exchange of local currency into bitcoins at the current market rate. Often, they require you to link an existing bank account for the transfer of funds between the two parties.

Also, since a single bitcoin can be too expensive for many people or too risky for novice investors, you don’t need to buy the entire coin. Instead, similar to the dollar which can be used in fractions such as a penny, nickel, dime, or quarter, bitcoin can also be bought in fractions or units to be exact. The smallest unit of bitcoin that can be bought is equivalent to 0.00000001 BTC, which is referred to as the Satoshi, named after the anonymous and mysterious creator of Bitcoin.

Buy From A Friend

If you have any friends holding bitcoins, you can ask them if they’ll spot you a fraction of Bitcoin.

Mining Bitcoin 

Mining bitcoins is similar to mining gold but instead of hardcore machinery and technology, you will require expensive hardware that sucks up tons of power and specialized software. It involves solving complex mathematical algorithms in return for bitcoins. Mining bitcoins can, however, be a very difficult task.

Investing Through Trading Bots

There are a plethora of trading platforms that offer trading bots. Traders invest money in these and these trading bots use advanced technologies such as AI (Artificial Intelligence) and ML (Machine Learning) to construct powerful and effective algorithms that are then used to take advantage of crypto booms resulting from the highly volatile nature of the crypto space.

An example of such a platform is Bitcoin Future. It is among the few bitcoin trading robots that are powered by AI and the Distributed Ledger Technology (DLT). These two technologies are considered to be the holy grail of algorithmic trading on Wall Street. You can create an account with Bitcoin Future and fund your account with as little as $250 to trade and reap the benefits.

The popularity of such platforms has skyrocketed in recent years. They have proven to be a safe haven for novice crypto traders with little to no experience. Also, they eliminate the need to have your eyes glued to the screen for updates, allowing people to trade bitcoin as a side hustle.

It is recommended to be cautious, however, because many of these trading programs can be scams that take up all your money, leaving you with nothing. Therefore, it is best to stick with a reputed and well-known system.

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thyuz
thyuz
6 months ago

Concise and easy read for the novice. Informative and well written.

Phundi
Phundi
6 months ago

You can also work online and be paid bitcoins/Satoshi

Cut Beef
6 months ago

If it does not make sense, run.

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