Should You Invest in Bitcoin?
If you're not sure about whether putting money into cryptocurrency is still a good idea or if you think you've probably missed out now that Bitcoin has surpassed $10,000, continue reading about how investing in BTC in 2018 can produce returns.
Investing in Bitcoin
The concept for Bitcoin began in 2007 by Satoshi Nakamoto. It is unclear if Nakamoto is an individual or if the name is a front for a group of individuals. A year later, there was a filing for an encryption patent. Around the same time, Nakamoto published his white paper outlining his peer to peer electronic payment system. Many people assumed the individuals filing the encryption patent were Satoshi Nakamoto. However, the three individuals emphatically denied any association with Nakamoto.
On January 9, 2009, Nakamoto initiated the first block of transactions, which is the foundation of Bitcoin's blockchain. The blockchain is a public record of Bitcoin transactions. To date, one bitcoin is worth $13,949. Bitcoins were an excellent investment when the digital coins were not worth much, but now? For some, the answer is yes, for others, no, and yet others who want to know what the big deal is anyway. So, what makes Bitcoin so attractive?
The Bitcoin that Nakamoto imagined was a peer-to-peer electronic payment system. Bitcoins are cryptocurrency, a secure currency that is encrypted to prevent it from being copied. Cryptocurrency is also anonymous and universal; anyone can send or receive payments as long as bitcoins are accepted by that person or entity. Bitcoin is not affiliated or owned by a bank eliminating transaction and interest fees. It is also accessible 24/7, 365 days a year. However, due to the anonymous and unregulated environment, there is little recourse if a transaction goes awry.
Should I Invest in Bitcoin?
Are you asking yourself, "Should I invest in Bitcoin?" There are a few things you should consider before leaping over to digital currency. First, take into account whether you are a risk taker. With the value of bitcoins fluctuating by the second, an investment as such would not fare well with the faint of heart. Next, ask yourself if you are willing to lose value, and if so, how much?
Nothing in the digital environment is definitive. Bitcoin could become obsolete tomorrow. You have to be willing to live with the idea that you may lose most or all of your investment. The last thing to consider is how or why Bitcoin will change or better your purchasing habits. How important is it for you to make anonymous purchases? Do you make tons of purchases that rack up interest rates and fees? Do you make several international purchases? If anonymity is important to you or if you make tons of purchases, international orders included, investing in Bitcoin may be an appropriate investment for you.
How to Invest in Bitcoin?
There are several ways to buy bitcoins: Exchanges, Local Dealers, and Mining. There are also websites that pay bitcoins to complete tasks or by playing online games. This method, however, is not suggested as the pay is very little. Here is a look at the most preferred ways to purchase bitcoins:
A Bitcoin Exchange is a place to exchange currency for bitcoins. Most exchanges allow you to buy, sell, and house your bitcoins with them. It is the safest and most preferred option.
A Local Dealer is someone in your area that is selling bitcoins. These purchases can be quick and usually does not require an exchange of personal information. However, local bitcoins may be priced higher and can be less safe than an exchange. Only go through sellers with trade history and positive feedback.
Mining is the verification process of transactions. The individuals that mine must have internet access and a mining machine. The reward for miners is bitcoins. Unfortunately, mining machines are costly and not energy efficient, making it the least preferred option for the average bitcoin investor.
Best Way to Invest in Bitcoin
The best and most safe way to purchase bitcoins is through a Bitcoin Exchange. One of the perks of going through an exchange is it usually offers a wallet as well to house your bitcoins. You will need a Bitcoin Wallet before or while you are purchasing bitcoins. The wallet stores bitcoins for safekeeping until their use is required.
Coinbase is a digital currency wallet that allows you to buy, sell, and store bitcoins and other digital currency. Coinbase is a superb option for beginners. It is user-friendly and pretty straightforward. They also offer the Global Digital Asset Exchange (GDAX) for seasoned professionals interested in trading.
As Bitcoin becomes more and more popular, more exchanges appear. Most exchanges are legit, but there is always a risk of being scammed. Be sure to do your due diligence and confirm that the exchange has a good online presence and reputation. A few other things to be cognizant of when looking for an exchange is the fees, payment types, verification process, exchange rates, and geographical limitations.
How to Invest in Bitcoin Stock
Investing in Bitcoin stocks begins with buying bitcoins. However, if that option is too risky for you, an alternate option is to invest in a company that has invested in Bitcoin, bitcoins, or bitcoin mining. Here's an indirect way of how to invest through buying bitcoin stocks.
Several companies jumped on the Bitcoin bandwagon from the beginning. Some are now seeing gains upwards of 100%. Bitcoin Services Inc. is one such company. Their focus in mining bitcoins has attributed to the company's 19,275% gain within the past year. Nvidia Corporation, Overstock.com Inc., and Square Inc. have also seen an increase in the past year.
You are not directly investing in Bitcoin by investing in one of these companies, but it may be just as lucrative an investment, especially if your goal is to see positive gains.
Bitcoin is a great concept in theory. However, purchasing bitcoins and investing in Bitcoin stocks is not for everyone. If you decide it is worth risk, remember the best way to invest in Bitcoin is with a trusted Bitcoin Exchange. There is an alternate option, which is investing in Bitcoin stocks, and if you are wondering how to invest in Bitcoin stock, find a trustworthy broker with a reputable brokering history.