Invest in Bitcoins - A Guide for Beginners

If you are looking for an exciting investment opportunity, you might want to consider Bitcoin. This technology was first invented in 2009 and has fascinated investors ever since. It’s also spawned a new form of investment type, called cryptocurrencies. But what is Bitcoin and how can you invest in it? While many people assume that the answers to these questions will be complex, this isn’t the case. Let’s look at some of the best ways for a beginner to get involved in this cryptocurrency.

 

What are Bitcoins?

Let’s start by finding out what Bitcoins are and how they are different from a regular currency. One of the biggest elements is that it is fully digital. You will need a wallet to purchase and store Bitcoin. We’ll talk more about digital wallets and how they work a little later. Also, unlike other forms of currency, Bitcoin isn’t regulated by any government. In addition, there are only a finite amount of coins available, just 21 million.

However, the biggest difference between other currencies and Bitcoin is the use of Blockchain technology. This allows Bitcoin to keep the user’s information private. The customer's information, and the exchanges that have been made, are all recorded on an electronic ledger. This ledger is divided amongst all the Bitcoin owners. This makes it virtually impossible to trace any individual transaction. This unparalleled level of security is one of the reasons why Bitcoin has become so popular, generating a lot of mainstream interest. Blockchain technology has also been implemented into a range of other industries. Now that we know a little more about what Bitcoins are, we can look at why you might want to invest in them.

As we mentioned, Bitcoin is highly secure. In an age where hackers can infiltrate a range of security systems, people want to know that their finances are safe. For this reason, more and more people are choosing to use Bitcoin. The more mainstream the cryptocurrency becomes, the more its value will increase. In addition, supply is fixed to 21 million Bitcoins. As demand continues to increase, this will further increase the value of the cryptocurrency. Finally, they don’t rely on governments and can be used by anyone around the world. This means that it could, eventually, become a global currency. If this occurs, those who choose to invest early will be very wealthy, as the demand grows.

However, before you can profit from Bitcoin, you will need to obtain the cryptocurrency. There are currently two ways that you can do this. You can choose to open a digital wallet and purchase the coin. Alternatively, you can “mine” the coins. In some cases, you might want to use a combination of the two approaches. Let’s look at both of these ways to get Bitcoin, so you can find the one that works best for you.

What are Digital Wallets?

When you start to either earn or purchase Bitcoins, you will need to find a place to store them. In this case, you will need to use a digital wallet. These can be found online or as a smartphone app. Alternatively, you might want to print off the private key and passcode information, required to access the wallet. This will give you extra security, allowing you to store this data offline. You will also be able to use your wallet to purchase items using Bitcoin or transfer the currency to a crypto-exchange. This will allow you to convert the funds into physical currency, which you might find easier to spend.

There are many types of digital wallets available for you to choose from. However, you should make sure to investigate each option thoroughly, to make sure that it is legitimate. As the value of Bitcoins continues to rise, the fraudulent wallets become more advanced, as they try to get access to your cryptocurrency information.  Once you find a trustworthy wallet, you will be able to download it onto a laptop or mobile phone. It’s also important that you take steps to keep your account information safe. Often, the emphasis will be placed on the owners on the wallet to maintain its security. Once you’ve set-up a digital wallet, you will be able to start collecting Bitcoins. There are two main ways you can do this. You can either mine them or buy them through an exchange. Let’s look at these two ways of investing in Bitcoin.

How do you “Mine” Bitcoins?

The first way that you can try to invest in Bitcoin is by “mining” them. The Blockchain is comprised of a series of complex mathematical equations. However, you can purchase computers to solve these equations. Each time one is solved, you will receive a fragment of a Bitcoin. This is then sent to your computer. It’s believed that there are around 16 million Bitcoins in existence. This means that there are still 5 million that are available to be “mined.” There are some pros and cons to taking this approach.

Unlike purchasing coins through an exchange, you won’t need to pay anything for the Bitcoin. However, you will often need to purchase specialized computer equipment to mine the Bitcoin. This can often take a big investment in electricity. These devices can also be quite noisy. Another potential difficulty is that the equations will become more complex over time. This means that it can take longer for you to generate Bitcoin. But once you’ve got the equipment, it should be easy to run, generating Bitcoin consistently. Also, like other rare metals, as the number of Bitcoins available decreases, they will become more valuable. This can help offset the costs of purchasing and running the equipment.

Where To And How To Buy Bitcoin in the UK?

Another way to obtain Bitcoin is by purchasing it. The best way to do this is through a cryptocurrency exchange. These will allow you to trade physical currencies (like the Pound) for virtual currencies (like Bitcoin). There are multiple ways that you will be able to purchase through an exchange. For example, some might allow you to transfer funds from PayPal into the exchange, others might let you use a credit or debit card to make the purchase.

Like finding a digital wallet, it’s important that you find a reputable exchange. If you don’t it’s possible that you might lose your funds. In addition, you will need to make sure that you get something that will allow you to purchase Bitcoins, rather than simply trade them. For this reason, you should look for exchanges that are connected to a digital wallet.

Another way of purchasing Bitcoin is through a P2P exchange. This allows you to buy Bitcoins directly from the seller. In most cases, these sites will support a range of payment options. For example, you might be able to use PayPal, Money Transfer, MoneyGram, or iTunes vouchers.

Finally, in order to make the best investment possible, you should watch the Bitcoin price. This fluctuates, depending on the amount that people are willing to pay. To make sure that you get a good deal, wait until the price drops, then purchase Bitcoin. This will let you get more value for your money.

Invest in Bitcoins - A Guide for Beginners

How are Bitcoins Used?

Once you’ve set-up your wallet and started gathering Bitcoin, you might be wondering what to do with them. There are a few ways that you can use your Bitcoin. First, you can use them as payment for goods and services, just like you would with physical currency. Currently, there are around 100,000 places that will accept Bitcoin. However, as this becomes more mainstream, it’s likely to become a more common payment option in the future.

You can also hold your funds. This will allow you to wait for the price of the currency to increase. Then, you will be able to sell them for a profit. This is a long-term strategy, driven by the rise of mainstream demand and its effect on the limited supply on Bitcoin.  Alternatively, there might be some sites where you can lend out your Bitcoins, letting them earn interest. This will allow you to produce short-term profits. However, you should make sure to thoroughly investigate these options, to make sure that you are choosing something that has sufficient protections in place for lenders.

Since its inception, Bitcoin has fascinated the world. First, it was simply an interesting approach to currency. However, over time, it’s started to generate more and more mainstream appeal. This has caused steady increases in the Bitcoin price. This growth can be expected to continue because the supply will be limited to just 21 million coins. Because of this, these can make a great investment for investors. We discussed what Bitcoins are, how they work, and some of the ways you can obtain and sell them. We also looked at some of the ways you will be able to protect yourself online. So, now you have the basic knowledge required to start investing in Bitcoin.

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