You have already heard about Bitcoins, and you are probably here today because you are curious or want to start buying yours!
And this is understandable because the cryptocurrency market, of which Bitcoin is just one of them, is becoming increasingly popular worldwide. This one and other similar writing help you get some of the financial concepts that underpin cryptocurrencies and prepare you with all the knowledge you need to make your first purchase.
After all, this technology promises to revolutionize the financial market, bringing new forms of negotiation and democratizing the system using international currencies.
So, if you want to understand more about the subject, keep reading and learn how to buy your Bitcoins!
What is Bitcoin?
Although it has only become popular recently, Bitcoin has been around for over a decade.
This virtual currency was created by a programmer with the pseudonym Satoshi Nakamoto in 2009 and is now widely used for online trading. Bitcoin is what we call a cryptocurrency: It is entirely virtual and is not controlled by any financial institution.
Unlike our common currency, the Real, cryptocurrencies are generated in a decentralized manner by their users.
Because of this characteristic, anyone can buy, sell or exchange Bitcoins.
It can be manufactured using computers with high processing power and can therefore be done by anyone with a machine with the necessary attributes.
Is Bitcoin secure?
Precisely because there is no regulatory institution that controls cryptocurrencies, many people may be in doubt as to whether Bitcoin is safe. To resolve this question, we need to understand how the currency works.
As soon as superpowered computers generate Bitcoins, a blockchain database stores everything in encrypted blockchain networks, ensuring the security of financial transactions.
This system is so secure that nowadays, traditional banks are also adopting it for their ordinary operations. So there is no reason for mistrust.
The blockchain also guarantees the authenticity of all transactions and prevents tampering with information. This is a unique code generated for each Bitcoin or fraction thereof, which remains in possession of the individual who buys it.
What are the risks of buying Bitcoin?
Because it is a type of currency, its risks can be compared to those of common currencies usually traded in the virtual environment, such as the dollar or the euro.
Thus, Bitcoin also suffers daily price variations, characterizing its volatility (up and down). Therefore, the buyer of the cryptocurrency may incur capital losses.
Another very relevant risk is about the code mentioned before, which is unique for each Bitcoin or fraction of the currency. This code cannot be lost in any way and must be very well guarded by the buyer, as there is no way to recover it.
Moreover, it is not uncommon to see news of hackers and malware trying to break into users’ accounts to steal this security key.
Therefore, it is also essential to take good care of the virtual account by using reliable websites and a strong password.
Finally, we cannot fail to mention that, despite being a democratic feature of cryptocurrencies, Bitcoin’s lack of legal regulation is not without concern.
After all, in case of problems, there is no bank or body to turn to.
How much does Bitcoin cost?
As we said before, Bitcoin undergoes daily price variations, a normal market movement.
Therefore, if you want to purchase cryptocurrency, you must follow the platform’s quote.
In this case, you can just search for “Bitcoin” on Google or use a specialized site, such as CoinMarketCap, where we can see the prices of various cryptocurrencies.
Buying 1 Bitcoin (1.00btc) is not a cheap task, but the good news is that it can be bought in fractions, according to your available capital. The smallest particle, called Satoshi, is 0.00000001btc.
What can I buy with Bitcoins?
Currently, Bitcoins are accepted in any country in the world, especially in online commerce and, little by little, in physical stores.
In other words, you can buy practically anything you want with cryptocurrency!
This is a great advantage, especially when traveling, as it eliminates the need to buy different international currencies and is much safer.
In addition, some exchange houses already exchange Bitcoins for physical currencies such as the Real or the Dollar. In other words, you can transform your virtual currency to use it as physical currency!
How to buy and sell Bitcoin?
To buy or sell cryptocurrencies is pretty simple. You need your money and an account on a specialized platform (broker or cryptocurrency exchange). That’s all!
Still, it is essential that you choose a reliable and recommended broker to avoid problems with fraud.
Below is a step-by-step guide and some platform suggestions.
Register on the chosen site
The first step is to choose the platform where you will trade Bitcoins, such as Binance and others.
Before you decide where you will open your account, look at the following details:
whether the site has a nice and intuitive layout;
if there is an application, in case you want to trade via cell phone;
what the costs are (brokerage and deposit fees, for example)
if the service is satisfactory; and
whether there are complaints from users.
Transfer the money from your bank account
After choosing your broker and registering, it is time to transfer the money to the platform.
To make the operation, simply enter the broker’s data and make the transfer.
When transferring, check if there is a deposit fee, if there is a minimum amount, and if it is accepted instantly or not. This is because some platforms take up to 1 business day to recognize the transaction.
Purchase through the platform
With the money in your account, just choose how much you want to buy in Bitcoins and click the “buy” button. To sell, use the “sell” button on your platform. That’s it!
4 tips for those who want to buy Bitcoin
Even though buying and selling Bitcoins is relatively simple, here are some tips that can help you become safer and more comfortable dealing with the cryptocurrency market.
When we talk about investments, we always recommend starting small.
Cryptocurrencies are not exactly an investment. They are more like a store of value (since they only appreciate and depreciate but don’t pay dividends, like stocks), but that advice still holds true. So you need to feel secure with the amount of money you put in the brokerage. So start small and gradually increase the amount without getting headaches from worrying about losing your capital.
Understand the market
When exploring a new market, one should always be cautious and suspicious, not simply accepting everything without questioning.
In addition, you must understand more thoroughly how the cryptocurrency market, the blockchain, and daily price movements (volatility) work.
It is this understanding that will give you more security and ownership, so never put your money into something that you cannot explain how it works.
Buy low and sell high
Regarding the financial market, this is the recommendation of all experts.
Because of a psychological aspect inherent in humans, called loss aversion, we tend to do the opposite: buy when the price rises and sell when it falls.
However, this reasoning only leads us to lose money. We need to anticipate upward price movements, so we buy on the downside and profit on the upside.
If we want to make profits, we sell at the maximum possible price and wait for it to correct to more favorable levels to buy.
Not hard to understand, right?
Finally, we reinforce the need never to stop learning about the market.
This is because there is always something that we still don’t know or can go deeper into. Moreover, the cryptocurrency market is still relatively new and constantly updated, so don’t be left behind.
Nobody ever knows too much about something that they can’t learn even more. So always study.
This article talked a bit about Bitcoin, its features, and how you can buy yours!
After all this information, you are certainly better able to begin your exploration into the cryptocurrency market.
Still, we reinforce the importance of continuing to seek knowledge to learn more and protect yourself from possible scams and frauds.
Like any growing business, there are always people who take advantage of the ignorance of others for their benefit. That is why knowledge will always be your greatest ally in investing safely.