In this digital age, as most of the things in the world are transforming from conventional to electronic, such as e-commerce and workplaces on the internet, so is the use of currencies. Since its inception, investors have been rather reluctant in acquiring and investing in bitcoins, due to the unfamiliarity and unawareness of its potential. With the passage of time, bitcoins have gained recognition in both commerce as well as the financial markets.
Bitcoin is an open source peer-to-peer network, which facilitates instant digital currency payments. Investing in bitcoins and using them in transactions is a tricky business, and requires some time and research. This article aims to provide its viewers an insight into the world's leading cryptocurrency, and gives a brief image of what to expect after investing in bitcoins.
Here are 6 major aspects regarding the BTC that we have identified for you to read and understand before attempting to invest in bitcoins:
1. Bitcoins are Limited
People might wonder that they can wait and purchase bitcoins at their preferential price. However, that is quite unlikely, given the total amount of bitcoins is limited. To understand this idea, we can take the example of gold. Gold is also a limited commodity and its presence on the earth is definite, meaning that as people acquire gold, its scarcity continues to rise. Consequently, the value of gold increases with time, creating profits for its miners.
Bitcoin is also similar to this analogy. The total number of mined bitcoins available to acquire are 21 million. Therefore, as people continue to purchase bitcoins, its scarcity rises causing a perpetual increase in the bitcoin value.
2. Vast Utility of BTC
The benefits of bitcoins go way beyond its scarcity.
The monetary policy of bitcoins is very secure and verifiable.
The monetary policy of the bitcoins is a very significant characteristic of the bitcoin network. Although the credentials of the bitcoin users remain secure and safe, the total number of bitcoins in circulation and transaction quantities are visible to all the users on the network.
One of the key features which attracts investors towards bitcoins is the inexistence of governmental or regulatory authorities between the bitcoin transactions. This means that the BTC can be sent or received globally, without the fear of taxation or compliance of the national regulatory bodies.
The bitcoins have an increasing impact on the global economy. Its secure network is promising for the investors, while its positively trending value has also proven to be beneficial for the BTC owners.
3. The Price Trend of BTC
Since the BTC is a decentralized cryptocurrency, its price is not determined by a single authority or an individual, but rather due to several factors in the market such as the supply and demand of the BTC. The value of the bitcoin increases with an increase in demand, and falls when there is a downward trend in the bitcoin's demand. The buyable amounts of bitcoin can vary from more than a bitcoin to even less than one. The standard price of the bitcoin is displayed on exchanges against a single unit of the bitcoin. There are multiple online platforms to verify the current price and review the price trends of bitcoins, e.g. 'coindesk' or 'Buy bitcoin worldwide's platform'.
4. When to buy bitcoins?
When it specifically comes to the buying and selling of a particular commodity, there is no definite time for either a rise in price or its fall. Although regression tools aid investors to predict price trends, they are not 100% accurate. Likewise, there is no specific time for the investors to buy bitcoins, as its value changes rapidly all the time.
However, since BTC is a global digital currency, change of policies regarding fiat currencies throughout the world, and the condition of stock markets also greatly impacts the price of bitcoin. Any disruption in the stock markets or financial chaos shifts the investors from investing in the fiat and stocks to purchasing the BTC and other cryptocurrencies. This increases the BTC demand and henceforth causes a spike in its price. Conversely, when other areas of interests for investors are performing well, the interest in BTC continues to be relatively low, creating lesser demand for BTC and a generally lower price trend. Investors can look to exploit this temporary low price point, along with accepting the associated risks.
5. How to Buy and Secure BTC?
The ease of crypto-trade depends upon the location of the investor. The buying and selling of bitcoins, along with the liquidity, is easier in the developed countries. There are several cryptocurrency exchange trades like Bitcoin Lifestyle which can be used to buy and secure BTC. Coinbase is the most widely used crypto-trade and exchange platform throughout the world.
Since bitcoins are decentralized, they are exposed to attackers such as scammers or hackers. The best way to secure BTC is to use digital BTC wallets, which have layers of strong encryptions protecting your bitcoins.
Final Word
Bitcoins are trending and can prove to be a very valuable asset for investors. However, bitcoins are still emerging and therefore require a thorough research and understanding. Investors should invest their time familiarizing themselves with the BTC first, before investing their financial resources. This article just provides general information regarding the BTC. Viewers are advised to conduct their own research as well, before taking the next step towards investing in bitcoins.
