Undeniably, Bitcoin is one of the most popular cryptocurrency. It has given users the highest return on their investment. Since 2009, the graph of the users having Bitcoin has continuously increased.
“If you are thinking of buying Bitcoin for the first time, then you are not the one. There are many people who are interested in that. It has given dramatic price swings and plenty of people are using it in daily life.”
This currency is popular enough that by looking at the business logo design anyone can identify it although there are many others in the market. Many business people and younger investors have shown their interest in this cryptocurrency.
However, you should not delve into this new form of currency without knowing the fundamentals. You must know everything about it. Therefore, let’s discuss some of the things which you should know before buying Bitcoin.
#1. Price is volatile
One of the most important points that you must know. From the day of the invention of this currency, it has been volatile.
The price of the bitcoin is changing very rapidly even in the shorter span. At the start of 2013, it was $13.50, and then by the end of the same year, it was $1000. So, you can imagine you fluctuate it is. Even within a few years, it can take a significant jump in the positive or negative side.
As Bitcoin is a virtual currency, then the price of it depends upon the supply and demand. The higher the demand is, the more it will grow up. Along with this, some market news also affects the price. Hence, you must be ready to tackle the volatility of this currency before buying it.
#2. Bitcoin is anonymous
Another very essential point that you need to understand. Some may consider it as an advantage of Bitcoin. It’s true that transactions will not be revealed to anyone; however, the record will be visible to everyone.
Your transaction can be seen by anyone in the blockchain, which means it is not completely anonymous. There are many reasons to buy Bitcoin but this can be one of them because everyone wants to keep their identity safe. Your address of the transaction can be seen from the blockchain. So, it’s better to use a different address each time for buying and selling Bitcoin. So, keep in mind that Bitcoin is not at all completely anonymous.
#3. Bitcoin is taxable
As it’s one form of currency, you have to pay tax on the Bitcoin you hold. However, every country has its own set of rules on the basis of what you have to pay. Some may ask for the tax on the profit you have got and some may take less tax if you have a loss.
“Some of the Government doesn’t consider it as a legal and official currency, but still, it’s taxable. That means you must have an entire record of Bitcoin buying and selling.”
You must first read all the new and legal notice by the Government on how they calculate the tax on Bitcoin. Even it’s recommendable to take advice from the accountant on the same. Thus, it’s completely your responsibility to know about the taxation rule and regulations before buying Bitcoin.
#4. Must know where to buy
One of the basic things which every buyer must know. There are multiple sites you will see on the internet which let you purchase Bitcoin.
As there are many options but one of the trustworthy is the Bitcoin exchange. It’s a marketplace where you can buy and sell Bitcoin using your simple mode of payment which you usually do. However, every exchange might have a different rate, so you need to choose wisely. Some of the popular names are Binance, Gemini which you can trust upon.
So, as you are spending a lot of money buying Bitcoin, make sure you do not fall into some fake website and end up losing the money.
#5. Secure your Bitcoin
Before purchasing Bitcoin, you must know where you will store. To store it you must have a secure bitcoin wallet. There are many wallets, but not all of them are secure where you can blindly store it.
Few of them just work similar to the banks, but they might have security issues. Encryption of wallets can be a better idea to keep it safe. You can also go for cold storage where you store it in a physically like flash drive. So, do consider where you are going to store your Bitcoin safely.
Undeniably, there is nothing wrong with purchasing Bitcoin. It will give you unexpected results in a shorter time. However, prior knowledge is important. The above- discussed points clearly define what you must know before buying Bitcoin. It will help you save your money from going the wrong way. As it’s a new form of currency you may see a lot of news about it, so before going into that make sure you know about it everything.