Buying Bitcoin: Important Things to Keep in Mind

Bitcoin is a form of digitized currency and is an asset that can be purchased, sold, or traded for value just like a stock. Bitcoin defers from stock in that Governments won’t back it, the national economy won’t generate it, and banks won’t deal in it because Bitcoin isn’t fiat currency. There’s no centralized authority that stores and pays Bitcoin; instead you’ll find Bitcoin residing in a computerized and networked system leveraging a technology called Blockchain.

Starting in 2009 at near negligible value, Bitcoin zoomed to $6,300 a decade down the road, before stabilizing at $3,600, but only after undergoing an exponential boom in value, making it a prized investment asset for growing admirers of cryptocurrency. There is an estimated $156 billion worth of Bitcoin in circulation giving tangible assets such as real estate and gold a run for their money.

You could be viewing Bitcoin through investor sentiment, or hope to gain from speculative trading, or just use Bitcoin to buy things. It may interest you to know that there’s a method in the madness of navigating the shark-infested ocean of cryptocurrencies. Let’s dive into the waters to get an idea of what swims below the surface.

If You’re Buying Bitcoin, This Is What You Do

1. You Open an Online Wallet

When you intend to buy Bitcoin online, you start by creating a receptacle to hold your valuable stash. You proceed online and look for a Bitcoin wallet that is downloadable to your device, and link it with your credit card/debit card, or bank account. Unlike the leather wallet that you open physically, an online cryptocurrency wallet opens with a “keycode,” a string of digits that are unique to the user.
Consider the online wallet as your home “address” where you stash your valuables.

Safety Measures

Maintain different wallets for storing (saving) Bitcoin and for spending it. Protect the keycode like you would safeguard an ATM pin number. Regularly back up your Bitcoin transactions and key codes in an offline medium as a precaution against hacking.

2. Buy and Sell Faster and Safer Through a Bitcoin Exchange

Once you’ve completed the preliminary step of opening a wallet to store your stash, you need the via media of an online Bitcoin exchange to buy and sell Bitcoin. The exchange is a software platform that mediates between peers buying and selling Bitcoin. The exchange collects a fee for each transaction. The Bitcoin gets traded in the currency of the country that hosts the exchange; for example, a U.S. based Bitcoin exchange will sell you the cryptocurrency in dollars.

You need to key in your email ID and credit card/ debit card details to register in an online Bitcoin exchange.

The Bitcoin exchange may also offer wallet repositories so you can avoid parting with account information to more than one entity.

Safety Measures

A reliable exchange audits the Bitcoin verification process, proving the exchange has the liquidity to underwrite sales. An exchange that transparently lists its order book – an overview of the purchase and sales transactions – brings transparency to its trading volumes, which again indicates a comfortable liquidity position. You want to ensure that the fees levied by the exchange are reasonably priced compared to the market.

3. Decide the Bitcoin You Want to Buy

When you see Bitcoin valuation scaling $3,600 or more per coin, it’s easy to become intimidated and unsure, but don’t get hassled. The advantage of dealing through a Bitcoin exchange is that you can buy and settle Bitcoin in decimals.
You can rest assured that a bullish cryptocurrency market almost always lands you a decent profit, especially if you’re following the “Hold on for dear life” (HODL) philosophy. You’ll break even and surpass expectations by booking sizeable profits in the long-term.
The technicality of buying Bitcoin is very simple. Just navigate to the “Buy” icon in your dashboard and enter the amount you wish to buy. The software tethers the Bitcoin/fiat currency payment mode to your wallet and you complete the transaction in Nano-seconds.

4. Determine the End-Use of the Bitcoin You Bought

Bitcoin, apart from being an investment destination, is also the gateway to an exciting world of e-commerce solutions. From software to real estate and from jewelry to electronics, Bitcoin payments source you assets (many of them doorstep delivered) that are yours for the asking without a bank or any other entity acting as mediator.

Bitify, for example, is the globe’s largest Bitcoin trading platform offering an escrow arrangement to enable Bitcoin-related purchases.  

Glyde, with its “Buy for less, sell for more” philosophy has become a popular platform for buying and selling used devices, and when you’re paying in Bitcoin, it couldn’t get cooler.  

BitMarket makes things more interesting; you can trade your products for Bitcoin in this Reddit community, giving you an easy way of nurturing bitcoin investment.
The massive volatility in Bitcoin pricing makes any short-term speculation a bit of a nightmare, so it’s more profitable to hold your investment and hibernate for the long-term to notch up windfall gains.

Conclusion

Bitcoin is gaining the kind of revolutionary momentum that very few people could have foreseen, but every investor worth his stash is gearing up for a piece of the action. By selecting your Bitcoin exchange with care, you’d be setting yourself up for buying and trading Bitcoin in major fiat currencies.
To err on the side of caution, select exchanges that are fast, reliable, and compliant with regulations. That way, you’re assured of the safety of your funds and the privacy and secrecy of your ID and financial data.

Author bio: Agnieszka Podemska is an SEO specialist and content strategist at MiroMind SEO & Digital Agency. Avid blog reader and tech enthusiast, she likes to share her insights with others.

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