WHAT IS BITCOIN
Bitcoin (or BTC for short) is a digital currency and peer-to-peer payment system created by the pseudonymous software developer Satoshi Nakamoto. Though originally unknown to the general public, Bitcoin has recently attracted lots of attention in the financial world over the last few years. With this widespread attention, the process of investing in Bitcoin has recently become easier than ever before. However, it’s important to note that Bitcoin isn’t an ordinary investment (like, for instance, stock) — it’s more like an extremely unstable commodity, so don’t buy before you understand the risks.
STEPS ON HOW TO INVEST IN BITCOIN
Before investing in Bitcoin
1.
Create a Bitcoin Ledger wallet. Today, buying and selling Bitcoin is easier for beginners than ever. As your first step, you’ll want to sign up for something called a Bitcoin wallet. Like its name suggests, your wallet is a digital account that makes it fairly easy and convenient to buy, store, and sell your Bitcoin — think of it like a universal Bitcoin checking account. Unlike a checking account, however, starting a Bitcoin wallet usually takes less than a minute, can be done online, and is quite easy.
Sites like Coinbase.com, coinmama.com , Blockchain.com are just a few examples of reputable, reliable and user-friendly sites for beginners to create their first wallet.
2.
Link your bank account to your wallet. Once you have a wallet, it’s time to fill it with Bitcoin. Typically, to do this, you’ll need to supply the financial details for a real-world bank account just like you would if you were setting up a PayPal account or signing up for another online payment service. Usually, you’ll need at least your bank account number, the routing number for the account, and your full name as it appears on the account. You can almost always find these on your online banking account or on your paper checks.
Note that you may also be asked to provide contact information, like a phone number.
To be clear, linking your bank account to your Bitcoin wallet is not any more of a risk to your personal security than it is to shop online. Virtually all reputable Bitcoin services make a point to advertise their high standards for security and encryption. While Bitcoin services have been targeted by hackers in the past, so too have many major online retailers.
It may also be possible to use your credit card to buy Bitcoin instead of your bank account.
3.
Buy BTC with money from your bank account. Once you’ve supplied your bank information and it’s been verified by the Bitcoin service, it should be fairly easy to start purchasing BTC and adding it to your wallet. Usually, on your wallet page, there should be an option labeled “Buy bitcoin” or something similar — clicking this should take you through a straightforward transaction process that uses money from your bank account to purchase BTC. Note that the price of Bitcoin can (and does) change from day to day sometimes significantly. Because Bitcoin is a relatively new form of currency, its market has yet to become stable. The current dollar-to-BTC exchange rate should be clearly listed when you buy it — as of October 2014, 1 BTC was equal to about $350.
4.
buying into a Bitcoin investing company. It is “less risky” than buying and selling Bitcoin directly is to put money into an investment agency. The Bitcoin Investment Trust, for instance, allows users to buy and sell stock in the company just as they would for any other company. The Trust then uses the money to buy and sell Bitcoin with the goal of making money for the investors. Because the company deals solely in buying and selling Bitcoin, the company’s share price is directly tied to the price of Bitcoin. However, some users find this option preferable because the professional investors at the Trust are (presumably) experts and because it allows them to forgo the process of finding sellers and managing their Bitcoin accounts on their own.
MAKING MONEY ON YOUR INVESTMENT
1.
Buy low, sell high. At its core, the strategy for buying and selling Bitcoin isn’t much different than that for buying and selling stocks or commodities in the real world. Buying Bitcoin when the dollar exchange rate is low and selling it when the exchange rate is high is a money-making proposition. Unfortunately, since the Bitcoin market is so volatile, it can be extremely difficult to predict when the Bitcoin price will rise or fall, so any Bitcoin investment is inherently risky.
As an example of the Bitcoin market’s volatility, in October 2013, the price for Bitcoin was hovering around $120-$125 per Bitcoin. Within a month and a half, the price had shot up almost tenfold to nearly $1,000 per Bitcoin. A year later, the price was a third of its peak value at about $350 per Bitcoin. It is unknown when the next price spike will occur (if ever).
2.
Stay up-to-date on Bitcoin market trends. As mentioned above, it’s impossible to predict which way the Bitcoin market will go with certainty. However, your best hope for making money off of a Bitcoin investment is probably to monitor trends in the marketplace frequently. Because the Bitcoin marketplace can fluctuate rapidly, money-making opportunities like spikes in the exchange rate can appear and disappear in a matter of days, so keep a close eye on the exchange rate for your best chance at success.
if you want to become a member of Bitcoin discussion forums send a mail to (Investbitco@yahoo.com)so that you can communicate with other investors about market predictions.
3.
Use Bitcoin wealth to purchase more stable investments. One possible way to gain some stability out of your Bitcoin wealth is to use it to buy more stable investments, like stocks or commodities. Certain sites will allow you to do this — for instance, Coinabul.com allows you to purchase gold with BTC. You might even want to sell your Bitcoin and use the money to invest in the stock market or in bonds. While a conservative stock portfolio generally offers the best potential for stable, moderate growth, most financial experts agree that even relatively risky stocks generally have a lower capacity for fluctuation than the Bitcoin market.
4.
Never put more money into Bitcoin than you can afford to lose. As with any sort of risky investment, it’s best to think of the money you put into Bitcoin as money you’re “playing” with — if you profit, that’s great, but if you lose it, you won’t be financially ruined. Don’t put more money into Bitcoin than you can’t reasonably survive without. Bitcoin can vanish in the blink of an eye (and have done so in the past), so the consequences for gambling too much money on Bitcoin can be dire.
Don’t buy into the sunk cost fallacy — the idea that you’re “too deep” into an investment to pull out.
Tips
If you’re interested in maintaining your anonymity, consider purchasing Bitcoins by mail using a service like BitBrothers LLC. For a fee, these services will buy BTC for you without your ever having to log in online.
Note that the price of Bitcoins can vary from one country to another. If you’re willing to take the risk, you can potentially make money by buying BTC cheap in one country and selling it high in another, though, of course, it’s possible to lose money doing this if the market changes.
If you’re lucky, you may live near a BTM — a special type of machine that works like an ATM and allows you to buy Bitcoins in person. See Bitcoinatmmap.com to see if any BTM are near you.
Send us a mail for more enlightened on Bitcoin @investbitco@yahoo.com
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