Bitcoin is having its best time since its historic rally back in late 2017. It’s at an all-time high, and current market conditions make it a very attractive asset for many people.
It’s fairly accessible and still has room to grow, not to mention the fact it could show promise as a usable currency if global currency markets crash. However, bitcoin is not magical, and just like any asset class, it comes with its share of risk. There are also some particularities about bitcoin that you need to understand before getting in. Here are a few things everyone should know when buying bitcoin.
1. You Can’t Just Go Out and Buy Bitcoin
One thing you should know about buying bitcoin is that you can’t simply go and buy it. You will first need to find a reputable exchange and then make sure that you store your coin securely. This is done by using what is called a cryptocurrency wallet.
However, the wallet won’t be “storing” any of your coins per se. They will only be used to store your private and public keys for you to receive funds and verify ownership. Everything is stored on the blockchain.
If you want to understand what a private and public key is, try to view the private key as the key to a mailbox and the public key as an address. Anyone who wants to send you something has to know your public key, and you can’t receive anything if you don’t have this address.
However, only you should have the key to open your mailbox and get what’s inside. This means that people can’t do anything with your public key and that your private key has to be safe at all times. Also, know that if you lose your key, you won’t be able to get access to your funds, which is why you need to invest in a safe wallet.
Next comes exchanges. You want an exchange that has been established for a while and has a good selection of cryptocurrencies. You can buy Bitcoin with CoinSpot safely and easily. You can store your money on your CoinSpot wallet and decide to leave it there or export it to an external wallet.
2. Bitcoin is Volatile and Unpredictable
Another thing about bitcoin is that it’s volatile. The good news is that it is stabilising as the coin builds a growing base. There most likely will always be a base value for bitcoin when considering the number of people who are committed to holding the coin. There’s also the fact that bitcoin remains the gateway to other cryptos for many, so as long as there will be demand for crypto, there probably will be demand for bitcoin.
3. You Can’t Always Exchange Fiat for Bitcoin
You should also know that not all exchanges will allow you to trade your dollars for bitcoin. In some cases, these will only allow exchanges between cryptocurrencies. In this case, it would be a good idea to look into popular stable coins such as Tether. Tether is a coin that is pegged to the US dollar. This means that you’ll be able to have exposure to the crypto market without wild fluctuations.
These are all important things that you should be aware of before starting to invest in bitcoin. Make sure that you do your research on bitcoin and crypto in general before you make the jump and you’ll avoid some potentially costly mistakes.
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