Trading and Investing In Bitcoins – Safe, Risks, Advantages, and More
Trading and Investing In Bitcoins
Trading and Investing In Bitcoins – The news around the price of bitcoin against the euro or the dollar follows one another at the same rate that misgivings about this virtual money increase. How does it work? Is it safe? We answer these and other questions clearly and succinctly.
Thanks to blockchain technology, cryptocurrencies have become a growing trend. The first cryptocurrency to hit the marketplace, Bitcoin emerged as an alternative to fiat money trading and investing In bitcoins and is currently the digital currency with the largest market capitalization.
If you have considered investing in cryptocurrencies but do not know how to do it, we present a complete guide for you to learn how to invest safely in bitcoins and other cryptocurrencies.
Is it Safe to Investing in Bitcoins?
Bitcoin advocates argue that no group or separate can control Bitcoin, and the net remains safe even if not all of its users can be trusted. Security firms warn against code theft from any user or computer attacks against exchange houses—hackers design programs for that theft. Kaspersky analysts disclosed the identification of the CryptoShuffler Trojan a few years ago, for example, designed to change the addresses trading and investing In bitcoins of users’ cryptocurrency folders in the clipboard of the infected device. Since the operations carried out cannot be cancelled, and it is anonymous, any data theft has no solution. It also has no resolution if the personal code of the cryptocurrency account is forgotten.
Is it Advisable to Investing in Bitcoins?
Like any risk investment, it is impossible to advise anyone to invest in bitcoins. Not even the defenders of cryptocurrencies suggest investing savings in virtual currencies. Its highly volatile nature means that investing in cryptocurrencies today is closer to gambling than a serious investment. The support given by large financial groups to bitcoin gives it a value that the rest of the cryptocurrencies do not have. Since its creation, the accumulated trading and investing In bitcoins returns per bitcoin make it the asset with the highest revaluation in history. Central banks already openly recognize that digital money or virtual currencies will play an essential role in the future and are already designing their alternatives.
How are Bitcoins Created?
The creation of bitcoins is done through a decentralised process called mining. It is a surveillance process whereby Internet users “miners” verify transactions and ensure network security using specialise computer equipment.
Their computers are put into competition and whoever wins the validation of the transaction receives new Bitcoins in return.
Bitcoins are created at a fixed and decreasing rate of production each year. The amount of Bitcoins is limited to 21 million units. You should know that 80% of Bitcoins have already issue and are in circulation.
Advantages of investing in Bitcoin
Investing in Bitcoin gives you the following advantages over traditional investments:
Bitcoin is a more liquid cryptocurrency as it has many online exchanges and brokerages. It is effortless to instantly exchange bitcoins for cash or assets like gold with low fees.
Lower Risk of Inflation
Unlike traditional currencies or fiat money, which their governments regulate, bitcoin does not have any central government to hold it, which means it expose to inflation.
Stock trading requires you to have a certificate or license. It would help if you also died through a broker to trade a company’s stock. But bitcoin trading is minimalist: you buy or sell bitcoins on exchanges and put them in your wallet.
Disadvantages of investing in Bitcoin
Learn about some severe risks associated with bitcoin investments here.
The price of bitcoin is always very volatile. It can go up or down drastically from one moment to another. The bitcoin exchange is constantly changing. With such an unpredictable market, you will hardly be able to have a clear vision of your investment.
Online Hacking Threat
Because it is a fully digital currency, it always has the risk of hacking attacks. Despite having all possible security measures, exchange platforms always have a percentage of risk present.
Little or no Regulation
By not having any central entity that regulates it, your transactions trading and investing In bitcoins may carry out with negligence and exposure you to fraud.
Wallets can be Lost
Another disadvantage is that the wallets where you keep your bitcoins are digital. If you lose or forget the password, there is no way to recover your investment.
Caution: a key to Investing in Bitcoin
Bitcoin aims to inform investors: a minimum of technical and financial appetite is necessary to understand the protocol on which it is based and its risks.
What are the Characteristics of Bitcoin Investments?
Its characteristics are what makes Bitcoin unique money, and its model replicates by other existing cryptocurrencies, though with some changes from those of this cryptocurrency:
The money source limit to 21 million tokens, which reduce to 50% in the halvings every four years, reducing the miners’ reward.
Transactions that have to validate cannot ban or censor
- It is created with an open-source
- Is accessible to all users around the world and also
- It is not necessary to identify yourself to use them
We asked our expert and professor of the cryptocurrency investment course, Javier Molina, about the new Bitcoin ETFs, futures and price forecasts.
Where to Buy Bitcoins?
There are several pages where you can buy bitcoins. They are platforms that trading and investing In bitcoin’s large user base and where you can pay with your credit card or by bank transfer:
Coin base: Offers a 3.5% commission but is one of the most popular sites.
Kraken: the commission is much lower, between 0.16 and 0.26%.
Local Bitcoins: It intends for person-to-person (P2P) purchases.
The process is relatively simple.
You must first register with your personal data and create your account to use them. Once confirmed and verified, this last step may take a while- you must attach the card with which you want to make the payment and press the “Buy” option.
What are the Risks of Investing in Bitcoins?
Some analysts say bitcoin’s rapid growth isn’t a long-term guarantee that it won’t fail; what’s more, the price could plummet with just one click.
“It could create a leak if a big investor pulls out,” expert trading and investing In bitcoins Kevin Zhou told The New York Times.
Others maintain that it is a fraud, as with pyramid schemes. The financial giant JPMorgan Chase states this.
Four signs to detect a pyramid scam (and why you should not dazzle by celebrities or luxuries).
On the other hand, we necessary bear in mind that the lack of regulation makes this market more accessible and makes it possible for us to carry out transactions up to 24 hours a day effortlessly, but it is also riskier.
Is it Advisable to Invest in Bitcoins?
Like any risk investment, it is impossible to advise anyone to invest in bitcoins. Not even the defenders of cryptocurrencies suggest investing savings in virtual currencies. Its highly volatile nature means that investing in cryptocurrencies today is closer to gambling than a serious investment.
The support given by large financial groups to bitcoin gives it a value that the rest of the cryptocurrencies do not have. Since its creation, the accumulated returns per bitcoin make it the asset with the highest revaluation in history. Central banks already openly recognize that digital money or virtual currencies will play an essential role in the future and are already designing their alternatives. But bitcoin itself has already taken the lead by its characteristics.
Bitcoin is a term that we have heard frequently for more than ten years. However, it still raises many questions about what it is. When we talk about bitcoin, the first thing that comes to mind is that it is a form of money on the internet constantly rising in value. And that its use is becoming more frequent every day as a currency of exchange.
But what is bitcoin really, and how does it work? Is it safe to invest in this type of virtual currency? Is it true that you can make money legally with cryptocurrencies? If you are looking for the answers to these questions, we recommend reading this post to the end. We will try to explain in detail everything you need to know about this cryptocurrency.