Read This Before Investing in Bitcoins!
The huge popularity of cryptocurrencies, especially the “Bitcoin”, has made that some people spend their money on it and then get disappointed. They didn’t understand the market before investing in Bitcoins. We are talking about common mistakes that can make a huge difference between succeed and lose all our investment.
Sometimes we let ourselves be influenced by rumors and what we hear, instead of looking for truthful information. There are essential aspects you need to consider before making important transactions with Bitcoins, and this time, we will give you all the details to help you make a good decision according to your needs.
1. The price of Bitcoin is volatile!
Before investing in Bitcoins know that, in a matter of 24 hours, its price can increase or decrease. We are talking about a relatively new economy, with a novel character and in occasions, developing in non-liquid markets.
In this case, keeping your savings in Bitcoins is not recommendable. You need to consider it as a high-risk asset, for which you should never invest money that you can’t afford to lose with the flow of Bitcoin’s price.
Before investing, make a detailed study over the historic statistic reports about the movement of this cryptocurrency. If you don’t know much about these topics at the beginning but still want to invest, it is always an excellent idea to set a meeting with a financial advisor that can orientate you in the basic concepts and strategies about this.
In all situations, it’s necessary to become an expert in the subject before investing in bitcoins. You will constantly need to follow the behavior of this currency, learn about worldwide economy and analyze how geopolitics affect Bitcoin’s value.
2. Start with little amounts:
Don’t buy all the Bitcoins at the same time. You can diversify your purchases by using other pages in different days and weeks. In this manner, you can take a bigger advantage on the flows of its price and obtain average earnings.
Another reason to dose the acquisition of Bitcoins is the fact that this is not managed as a common investment in stock. For example, if you make a mistake in a Bitcoin’s transaction, you can’t just call a bank to ask for its cancellation. Remember that cryptocurrencies don’t depend of any financial institution or government.
3. Don’t risk your economy:
Borrowing to buy Bitcoins is a complete craziness. Remember that you need to invest the money that you don’t need at the moment, the one that you are will to lose. Dedicate an amount of money that don’t compromise the financial stability of you and your family. If you receive payments on Bitcoins, multiple services can immediately make the conversion to your local currency.
4. Protect your Wallet!
Before investing in Bitcoins know that an electronic wallet is a file that let you send and receive them. It stores the information of the cryptographic keywords that only the buyer knows and let it make all the transactions.
Bitcoin offers important security standards if you know how to manage them properly. You need to take care of your electronic wallet as much as you do with your regular money, so consider these recommendations to protect your Bitcoins:
- Be careful with online services to store your money. Some of them have had security fails so make a good research before choosing your electronic wallet and use an authentication of two factors.
- Maintain little amounts of money in your electronic wallet, pc, cellphone or server; just the necessary for your daily expenses and save the rest of your funds in a safer place.
- Make security copies of your wallet on a regular basis. It can protect you from computer or human fails and let you to recover your money in case that some of your electronic devices are lost or stolen.
- Encrypt every single security copy of your wallet that is exposed to the internet. Otherwise, they could be vulnerable to steals and malicious software.
- Use an offline wallet for your savings because it has the biggest level of security.
- Save your security copy in different places such as USB, CDs and even paper.
- Take note of every movement, transaction and passwords you have and then print them.
- Make sure to have the latest Bitcoin Software because it has important updates of stability and security.
- Design a backup plan for your family because if all your information about your wallet and passwords aren’t known by anyone else than you, this money can’t be recovered.
5. You can’t reverse a payment made in Bitcoins:
When you make a payment, the only person capable to refund it is the one who received the money in the first place. You need to make sure about stablishing business only with people or organizations that you already know, are trustful and count with a good reputation.
On the other hand, Bitcoin can detect typographic mistakes and won’t let you to send money by error to a non-valid address.
6. Protect your privacy:
Having privacy in this market is a job that requires much effort. Befor investing in Bitcoin, know that every single transaction is public, trackable and permanently stored in the web. This means that many people can see the funds and transactions of a Bitcoin’s address.
However, the identity of a person isn’t know unless is revealed during a purchase or under other circumstances, but usually most of the users have to give this information to obtain a product or service. In this manner, take in count these steps to increase your privacy using bitcoins before invest:
- Use new addresses to obtain payments: in fact, is recommendable to use a new Bitcoin address for every different income. You can also use several electronic wallets for different purposes.In this manner, you are separating your transactions and they won’t be related among them. People who send you money won’t be capable to know your other adresses and what you do with them.
- Don’t share your Bitcoin address in public spaces, because it can be trackable and every person will know exactly all the transaction’s record associated with your address. In addition, be careful by publishing information about the purchase of products or services because this could be also a way to find your address.
- Hide your IP address so that can’t be registered.
7. Taxes and Regulations:
Although Bitcoin is not an official currency yet, in many countries you will have to pay rents, payrolls and taxes over earnings in everything that has a financial value, including Bitcoins. So make sure to research these statements in your location before investing in Bitcoins and be completely informed about the regulations of your government on this issue.
The tips above will help you with a better start in the Bitcoin’s journey. Remember that this is not an investment of fixed income, so you will need to be patient about its performance.
Many people is choosing this cryptocurrency to increase their incomes. Our recommendation is that you need to absorb as much knowledge as you can about it to minimize the risks and learn even more to make of your first Bitcoin’s investment, a good decision for your financial wealth!