SP: Bitcoin Investing: Where to Start?

September 21st, 2018

SP: Bitcoin Investing: Where to Start?

Use this informative and easy to follow guide to get started with investing in Bitcoin and other сryptocurrencies. We will give you a rundown of how to buy Bitcoin, and then go into some basic investing techniques to aid you on your journey to cryptocurrency superstardom.

Get a Bitcoin Wallet

Like with real-world money, Bitcoin needs to be stored in a wallet. There are 3 main types of wallets to choose from, each with their own merits. Some types are better than others as well.

Here are the three types.

Software Wallet

As the name suggests, this is a wallet that is downloaded as a bit of software and is then stored on your computer’s hard drive. It is the simplest wallet to obtain, with many software wallets being low cost or free and is simple to set up and store Bitcoin quickly. The downside to this type of wallet is that it can be susceptible to hacking, and many investors over the years have lost Bitcoin because hackers have stolen it from their software wallets.

Hardware Wallet

Hardware wallets are typically dearer than software wallets, and this can be a drawback to investors if you’re looking to get trading at a low cost. But they are very much the securer option. A hardware wallet is an external drive that can be plugged into a computer when required. Without any direct internet connection, a hardware wallet is not susceptible to hacking in the same way as a software wallet.

Paper Wallet

Bitcoin can be printed onto paper and stored in the same way as you would your regular money. It will have a unique serial number in the same way as a US dollar would. Again, like hardware wallets, this is more secure in respect of hacking than the software option. The drawback is that paper degrades over time and most real-world money is actually printed on polymers or fabric to prevent this. So, unless you have access to very high-quality materials, it might be safer not to print on paper for storage.

Go to an Exchange and Buy Your Bitcoin

After deciding which wallet you are opting for, you can then head over to the exchanges to purchase Bitcoin. There are many exchanges to choose from, some better than others. Before using an exchange, compare fees and security and make sure you are buying from a legitimate exchange. Forums such as Reddit have a great deal of information from crypto users about exchanges and which ones to avoid.

One of the trusted Bitcoin exchanges is CEX.IOIt has unrivalled security and has not lost a single penny in transactions despite millions of dollars being put through it. It also has low fees and is very straightforward to set up an account and use, so it could be your go-to option when buying your first Bitcoin.

To buy your Bitcoin fast, all you will need is funds in your debit or credit card account and your card details to hand. On CEX.IO, all transactions are processed securely, and within moments you will be the owner of Bitcoin.

What to Do Once You Own Bitcoin?

The first thing you must do when the transaction completes is moving your Bitcoin to your wallet of choice. Though exchanges will provide a transaction wallet, it is worth noting that these are susceptible to hacking and some big exchanges have lost a lot of money after hackers targeted their exchange wallets.

If your Bitcoin is hacked, you will likely lose it all, so really make sure you’re protecting it as you would do with real money.

Once you own your Bitcoin and it is in your wallet, you will notice you have 2 keysA public key and a private key. This can be confusing initially, but in short, public keys allow you to transact and can be shared with people you’re transacting with. It is the address for them to send Bitcoin to. Your private key is like your pin number, never EVER give it out under any circumstances.

Have Fun with Your Bitcoin

Now you can use your Bitcoin for a multitude of purposes, some people use it to buy things, some companies use it to incentivize or even pay employees. For the purpose of this article, we will look at investing in Bitcoin and some of the tips to help your investing get started.

Here are our Bitcoin investing tips.

Be Prepared for Rapid Market Changes

Bitcoin as a stock is volatile. This means it will jump significantly in value at the drop of a hat and likewise fall dramatically. The key to cryptocurrency investing is not to panic, it can be distressing to see a coin you own at $7,000 drop to the $6,000 mark in a heartbeat, but panic-selling will likely make you a cryptocurrency loser. Those that have traded well with Bitcoin have ridden waves of sweeping drops only to come out the other side and watch the token rise significantly.

Do Your Research

The crypto community is always awash with gossip, rumours and hearsay. If you hear a tip, then make sure you verify it with at least 3 sources external to where you initially heard it. Always make sure you’re reading about crypto in your leisure time, educating yourself will put you in a much better position than many amateur investors looking for a quick buck.

Knowing where the market is, the challenges it faces and where it is likely to end up could make you an absolute fortune. The only way to do this is to carefully read and analyze information and choose which information is trustworthy and which is pure speculation.

This disclaimer informs readers that the views, thoughts, and opinions expressed in the text/sponsored content belong solely to the author, and not necessarily to Bitcoin of America, organization, committee or other group or individual. All investments are at your own risk and should be done after careful research.

 

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