What You Need to Know About Bitcoin
Bitcoin has been making the news lately, more often than ever before, and you may wonder why. Since its launch in 2009, bitcoin has consistently improved in price, value, and demand, and has topped the list of other cryptocurrencies today.
The number of bitcoin users has been on the rise for years but it spiked in 2020, with one of the major reasons being the COVID-19 pandemic that has had a huge impact on the finance sector. As of December 2020, there were over 63 million wallet users, which holds a significant difference from the number of users in 2019, which was about 45 million.
If you are just getting started with bitcoin, there are key things you must know, some of which are highlighted in this article.
Bitcoin Price is Volatile
The price of bitcoin is highly volatile, which means it can unexpectedly increase or decrease over a short period. There might be a lot of noise around bitcoin today but don’t get tempted to invest in it based on that noise. This is because you are likely to lose a huge percentage later due to its high volatility. Before you invest, ensure you do proper research and understand how it works and the best way you can invest without losing all your capital in a short time.
It is Not Completely Anonymous
You might have heard about how bitcoin is anonymous but it is not completely true. Your privacy is indeed protected with bitcoin, as your public details are masked with pseudo details, so no one has direct access to your personal information. However, your identity can still be revealed during a purchase or if you are careless with the private address of your wallet and someone has access to it.
To keep your account secure regardless, one helpful tip is to not use the same bitcoin address for every transaction. There are bitcoin exchanges such as the bitcoin future app that allow you to generate a new address every time you make a transaction.
Bitcoin Payments are Irreversible
Bitcoin is a decentralized currency, which means there is no middle man or third-party authority like the bank managing your transactions. This makes you solely responsible for your money. This is great in the sense that you can easily complete a transaction within a few seconds or minutes, whether it is a local or an international transaction. However, on the flip side, if you make a payment in error, it cannot be reversed.
To avoid losing your money, ensure you cross-check the address you are sending to and also apply security measures to your bitcoin exchange or wallet to avoid any fraudulent activity on your account.
Should You Invest in Bitcoin?
The demand for bitcoin is high, especially in the past few months. If you are considering investing in bitcoin, now will be a good time but it’s also important that you understand what you’re about to invest in. Learn the basics of bitcoin trading and investment and also start small while you gradually learn the ropes and master how it works.