24 Aug 9 Steps Before Buying CryptoCurrencies
Cryptocurrency is all heated up in the investment ground these days! It has sectors totally given over to on the news, in magazines, on finance websites and much more.
From where can you buy them, how can you store them and how do you need to tax them?
You should know it all from A-Z!
Bitcoin is a Cryptocurrency.
Bitcoin is what’s known as a cryptocurrency – a digital currency secured through cryptography or codes that can’t be read without a key. Bitcoin isn’t the only cryptocurrency in the world, there are many more but it is the most popular.
Invest Only What You Can Afford to Lose.
Like all investors, you can also be lured by money; moreover when you know it will be returned after getting multiplied! Even many experts get captivated and overwhelmed while investing. However you as an investor need to understand your border and pledge to never cross it.
The question is – how to identify this borderline?
Research is the key! The first rule to investing in Bitcoin lies in researching. To make your work easier there are various resources, which Internet provides to give you deep insights about everything.
Moreover, if by any chance, you find yourself getting tempted in “Bitcoin debt investing” we suggest you to please avoid! Bitcoin debt investing is a trap of debt and you would be compelled to pay the interest even if your Cryptocurrency investment doesn’t benefits you!
This goes the same for stock market, the only difference that the Cryptocurrency Market has is that; it is global and it offers you a list of elongated leverage.
What Risks are Associated with Buying Cryptocurrency?
Investing in Cryptocurrency is treated as high risk because it is a very fugacious and highly hypothetical investment; that is based on supply and demand – while high-risk investments also get you higher returns, however it’s only advisable to invest when you can afford to lose!
Also keep in mind that there is a chance, that many of these different Cryptocurrencies we are hearing about today; may not stay for long term. So, when investing in high-risk asset, think twice if you can afford or not.
Are all Cryptocurrencies the same?
Well, no! The same way all currencies are not the same. Likewise, the American Dollar is different from the British Pound; which is also different from the Chinese Yen in terms of value, buying power, supply, demand, inflation and other economic factors.
When buying Cryptocurrency, you’ll need to do some serious research to take a decision regarding, what type to buy. To your surprise, some Cryptocurrencies in the market do not have any practical purpose or real value.
Where is your Cryptocurrency stored?
When you invest usually in stocks and bonds, you have access to your investments via a brokerage account. In the case of Cryptocurrency, your assets are stored in a Cryptocurrency wallet or digital wallet (which is basically a secure digital wallet used to store, send, and receive digital currency) and it’s absolutely vital to back it up securely; as well as keep your pin or access details secure.
If you somehow you lose access to your wallet or lose your access details, it could be a hard time to recover!
Is Cryptocurrency like gold?
We’ve seen and heard a LOT of comparisons between Cryptocurrencies and gold. Conventionally, gold has been bought with a thought of expanding the investment, to secure oneself from unfortunate events like natural disasters, currency declines, collapses etc. Moreover a lot of people look up to Cryptocurrency as form of digital gold!
Since Cryptocurrencies are not a part of long-established financial systems, for some people it is taken as a way to guard themselves from countless risks that come along with these systems; that are extremely shaken up by the things happen within a government swayed economy!
Similarly, just like gold is a meager resource, Cryptocurrencies are also limited in a way that it can only be created from it’s digital mining.
But, the main difference between Cryptocurrency and gold is that gold has an associated value, because it’s literally used in industries and to make jewelries.
Hence, the demand for gold is not just derived from the object but also from the industry it is associated with. Cryptocurrency does not have this kind of association value (right now) and its worth is only set on by how much you, as an investor are willing to pay for it!
How to get Bitcoins.
There are three ways, you can get Bitcoins: buying them on an exchange, accept them for products and services and mine them.
Initially, you have to download a Bitcoin wallet. There are a number of websites from where you can download an app on your phone or computer to store Bitcoins.
For storing the Bitcoins, you have several options.
- Desktop wallets – you will be solely responsible for guarding your currency and backups
- Mobile wallets – gives you the leisure of travelling with your bitcoin anywhere and you are held answerable for them. Mobile apps will also allow you to scan a QR code or tap to pay
- Web wallets – will be transacted through a third party service provider. In case any issue takes place from their end (hack/theft/etc.), you will be on risk of losing your bitcoins
Offline, you can keep your cryptocurrencies:
- On a USB drive or other storage media
- On Paper Wallet
- On a bearer item such as a physical bitcoin
- On a offline Bitcoin Hardware Wallet
We suggest extra passwords and backups to be preventive.
Blockchain is Secure.
Blockchain is secure, because it’s very limpid. Anyone can access copies of blockchains and are distributed over servers and domains up & down the world. You can get the information of your blockchain transaction in a number of distribution points, making it very clear to prove that the transaction took place.
And not getting bothered by the tedious process of your bank, to evince that a payment actually has been sent or received; the payment through a blockchain is known by all!
Where can you Use Bitcoin.
A number of places exist, where you can use your bitcoin to purchase a product/service. It is available to one & all – from big corporations and smaller, independent retailers including bakeries and restaurants! It can be used to even buy flights, train tickets, and hotels, gift cards, etc.
As businesses are lurching on the bandwagon and investors are becoming more interested in cryptocurrency, let’s wait for the propulsion to grow! Let’s us witness how the new generation of currency, will shift to a digital era!