The value of Bitcoin has been climbing rapidly over the past year, and now it’s easier than ever to get in on the action. But, should you? There are several reasons why investing in Bitcoin could be worth your while, but there are also some risks that you should consider before making an investment decision. Learn more about the benefits and drawbacks of investing in Bitcoin, plus discover which companies and startups are leading the way in developing this revolutionary technology.
What is a cryptocurrency?
The concept of cryptocurrencies like Bitcoin was introduced around 2009 and it quickly gained a lot of popularity. Now, many people are even predicting that cryptocurrency will replace fiat currency at some point in our future. But what exactly is cryptocurrency? A cryptocurrency is a digital asset designed to work as a medium of exchange using cryptography to secure transactions and control creation/destruction of additional units. Cryptocurrencies are built on blockchain, which uses strong cryptography to implement a distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.
What is Bitcoin
At its core, bitcoin is a form of digital currency. Like any currency, bitcoins are not worth anything until we agree that they have value. This means that it has to be traded for another commodity or service first.
How to get started with bitcoins
There are a few different ways to get started with bitcoins, but don’t worry about your choice. You can always switch later. The two most popular methods of using bitcoins are: buying them and selling them for profit, or spending them directly on products and services (think AirBnB and Expedia). Sign up for an account at one of many exchanges; Coinbase is a great place to start when buying coins from your bank account. There’s also several other apps out there that let you purchase directly with cash or credit card.
Do your research first!
Before purchasing any cryptocurrency, whether it be a bitcoin or other digital currency, do your homework! Cryptocurrencies are an exciting new asset class, but there’s still a lot of risk. Only invest what you can afford to lose. It’s also wise to educate yourself on why you would want to purchase any specific coin before putting money into it. Make sure that its goals align with your investment goals and strategies. If they don’t fit with yours, then steer clear! Furthermore, once a coin has made major gains (20%+, which is quite common), it might be time to sell some of your holdings if any of your investment criteria have changed or were met.
Where to buy or sell Bitcoin
When trading cryptocurrencies, one of your biggest concerns is likely how and where to buy or sell them. Coinbase is an online platform for buying, selling, transferring, and storing digital currency. The platform allows users to purchase bitcoins with a credit card from nearly any country and quickly convert it into different currencies. For instance, if you wanted to trade your Canadian dollars for bitcoins using Coinbase, you’d first need to purchase loonies from your bank using a process called an ACH transfer. Once that was complete, you could load up your USD wallet on Coinbase before making your purchase.
For most people, investing responsibly means setting a specific amount of money aside every month and letting it grow over time. However, if your employer offers a 401(k) or similar retirement plan at work, investing responsibly might mean contributing a portion of your earnings to that plan. This ensures that when you stop working for an employer (which will happen someday), you'll have an established source of income that can keep up with—or even exceed—your lifestyle. Check out our IRA rollover guide for more details on using these plans to save for retirement.
Crypto coins are becoming increasingly popular, with a rising number of people choosing to put their money into digital currencies. Though many have already embraced these new types of assets, there’s still a lot of uncertainty surrounding them as well as misconceptions about how to actually use them. The growth in popularity is so strong that even governments are considering how they can get involved and profit from it—and that’s just one more reason why you should consider getting your own crypto coins. Of course, not all cryptocurrencies are created equal and some offer better deals than others; to make sure you aren’t making a bad investment decision, be sure to educate yourself on what factors play into value and which ones don’t really matter.