If you are thinking of getting involved with cryptocurrencies and to get yourself your first Bitcoin, there are some things that you need to do before blindly investing in it. Many people invest without ever thinking about what they are buying, some even go all-in blindly.
This is might bring devastating results in the end or even at the beginning of your journey. For you to become a successful investor you need to have a certain approach and build the right attitude when it comes to investing, but don‘t you worry, this article will take you over the most basic and needed steps on what to research and understand before blindly risking your capital.
We will share what we have learned from investing in this industry.
Bitcoin’s core idea is to be a decentralized and anonymous mean of value transfer which is not affected by constant inflation. Simplified – there are a pre-set number of bitcoins that will be ever created and nobody can “print” more of it. Bitcoin is also immutable, censorship-resistant and independent from any central bank.
Do not blindly buy into Bitcoin unless you fully understand what it is for, what benefits it has over modern traditional payment solutions. It’s highly volatile since the entire market is still in its infancy, meaning that if you buy in just for the sake of it or feel the urgency to buy some because you’re missing out on it – it will most likely be at the wrong time and you might experience severe losses.
A simple example of that is one of the golden bull runs in 2017, where thousands of people bought Bitcoin on credit while it was at its All-Time High value of nearly $20,000. It is needless to say that none of these people possibly ended up at profit to this page’s creation date.
If the answer to the above question is NO, then you should continue reading this article. You need to have a certain mindset in place and be ready to read a lot. Even after you buy Bitcoin there will be a lot left for reading, we can assure you.
First and foremost you should read and understand the characteristics of Bitcoin. That it is decentralized, limited, immutable, censorship-resistant and independent from central banks and governments, etc… Understanding those characteristics will help you understand why Bitcoin by itself is valuable. The world needs sound money like Bitcoin and for it to be global it needs to have certain characteristics.
Before going to exchanges to buy Bitcoin you should learn how to properly store it. There are hot and cold wallets. A hot wallet is the one that will is installed on your computer or phone, to a device that is always online. The cold wallet is usually a device that holds your private keys offline, it has no direct connection to the internet. While reading about wallets you will need to learn about private and public keys.
Not your keys, not your Bitcoins!Andreas M. Antonopoulos
You must never show your private key to anyone, consider this as the code to your bank account. If you have the private keys you have the bitcoins that are associated with it.
Everything in this world moves in cycles, especially assets like Bitcoin. As it is somewhat based on the gold model – being scarce and produced over time with halvings on every four years. Bitcoin follows a 4-year cycle which means that we usually have 3 years of a bull market and around 1 year of a bear market. After every cycle, the asset gets more recognition and adoption.
If you want to learn more about cryptocurrency overall through video clips here is a link to one of the best people that you will ever find – Andreas M. Antonopoulos.
After catching up with all of the needed information on what is it for and how to store it, there comes the most exciting part – to purchase your first Bitcoin. There are a few ways to buy Bitcoin. With the first way to go to exchanges like KuCoin, Binance or Bitpanda, etc…
You deposit FIAT on those exchanges and buy directly Bitcoin. From there you can always buy other altcoins and high potential projects which are higher risk. For risk management and good risk/reward ratio portfolio you can read here.
The second way is that you can buy Bitcoin over the counter (OTC) through Localbitcoins where you can find a seller from whom you can buy. Or if you know a person you can always ask him to sell you directly. Of course, in such transactions be careful from whom you are buying and selling so you don’t get scammed.
After you do your research on the things mentioned above you will know the basics of everything needed to safely make your first steps into the open space of cryptocurrencies.
Invest wisely and for the long term as this is a marathon, not a sprint!