Bitcoin is still an exciting new technology that is yet to hit mainstream adoption. But that also means it can be a bit confusing for newcomers and less tech-savvy users. To make things more difficult, Bitcoin is a valuable asset, and a single mistake while buying, spending or storing it can mean it’s gone forever.
Luckily, there are a few simple steps you can take to get started with Bitcoin quickly and safely. Follow them all carefully, and you’ll be set for a smooth introduction into the Bitcoin market and the cryptocurrency industry overall.
1. Get your head around the idea
The first step in starting out with Bitcoin is getting your head around how Bitcoin really works. Don’t take this step for granted. Bitcoin is completely different from traditional money and takes a big leap of imagination to truly grasp how it works.
The main point to get is that Bitcoin is decentralized. That means that it isn’t issued by any government, company or organization. Nobody owns Bitcoin as a whole and nobody runs it. The Bitcoin protocol is basically an agreement between the people using the Bitcoin network. That agreement lets everyone determine who has how much Bitcoin and who is allowed to spend.
This characteristic means that using Bitcoin is unlike using the money or banks we are used to. It’s worth doing some research to fully understand this idea if you don’t already. Search around, there are some great articles and videos that go into depth on the concept.
2. Know the risks
No matter which website you use, investing in Bitcoin is an inherently risky undertaking. Being a decentralized currency gives Bitcoin a few unique properties:
● The Bitcoin price is estimated entirely by the market. Its value can (and does) fluctuate wildly from day-to- day.
● Once a transaction is done, it’s done. There is no way of reversing it.
● If you send Bitcoin to the wrong place, it’s gone, and there’s nobody to complain to.
● Bitcoin transaction fees depend on the network capacity and the current demand. There are no limits or regulations to control the fees.
● You don’t need anyone’s permission to use the Bitcoin network.
These factors stack on top of each other to make Bitcoin a risky investment. Bitcoin is much more volatile than most government-issued currencies like the US dollar or the Euro. There’s no guarantee that Bitcoin will be as valuable tomorrow as it is today.
There’s also the risk that someone will steal your Bitcoin or that you make an error and lose it. If you do, there’s no way of ever getting it back. You can’t call the bank branch and get them to reverse the transaction. It’s important to know these risk factors. Once you do, you need to learn how to manage them.
3. Know how to manage the risk
If you buy some Bitcoin today, you’re hoping the price will go up. However, as many Bitcoin buyers learned the hard way at the end of 2017, the price can also drop very quickly. To manage this, it’s important to only invest what you are prepared to lose.
As for keeping your Bitcoin safe from attackers (and yourself), you need to set up a reliable system for holding your cryptocurrency. Choose a secure Bitcoin wallet to manage your transactions for you. Critically, you need to make sure you keep your private keys safe at all times. When you start accumulating more Bitcoin, you might want to add extra security with a hardware wallet. Hardware wallets can keep your Bitcoin safe even if your own computer is infected by malware.
4. Get your hands on some Bitcoin
Once you’re up-to-speed with how Bitcoin works, the next step is to get your hands on some. The easiest and safest way for beginners is to buy Bitcoin on an exchange. Always go for and established and trusted exchange with a proven track record for looking after customer’s funds.
Using an exchange, you can choose from a variety of different payment options, including bank transfers, credit card, or debit card. Fees for buying and selling will vary depending on the amount you’re buying and your payment method. You also need to check the current market rate for Bitcoin to make sure you are getting a good price. Low fees are no good if you’re paying above the market exchange rate.
5. Keep it safe
With Bitcoin in your account, the next step is to keep it safe. You don’t want to keep too much of your funds on your exchange account. Bitcoin exchanges failed in the past and took user funds with them. Transfer your balance to your chosen Bitcoin wallet and keep your own backups.
6. Stay up-to-date
Once you’ve established your Bitcoin portfolio, whatever its size, you’ll want to keep up with what’s happening in the industry. Things change quickly in the cryptocurrency world, and if you’re holding Bitcoin, you want to be in the know. However, cryptocurrency is full of ‘experts’ who have no real authority. Carefully choose a few outlets and influencers you trust to keep you informed.
The main topics to be aware of include the new and upcoming government regulations, tax clarifications in your country, new types of threats and attacks, new Bitcoin products and services, and the price.
Enjoy the ride
Getting involved in the world of cryptocurrency isn’t for the faint of heart. Price swings, regulatory crackdowns, and cyber attacks are happening and evolving every day all around the world. The industry and the technology are still new, and things aren’t likely to calm down any time soon.
If you do decide to invest in Bitcoin, make sure you know the risks, stay safe at all times, be prepared for the unexpected to happen, and most importantly, enjoy the ride! It’s not every day we get to see a developing technology with the potential for so much social and financial disruption.
If you have any questions about how to get started, do not hesitate to join us in our Discord Server where we someone can answer your questions 24/7!
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