In the last few years, the Bitcoin phenomenon has taken the world by storm. The high prices it reached in the last quarter of 2017 was enough for even the most risk-averse investors to take interest in this new vehicle of investment. Are you also interested in jumping the Bitcoin bandwagon? While there is no harm in doing so, it is essential to remember that you should be familiar with the ins and outs of this cryptocurrency and the workings of the market before you put your hard-earned money into it.Since it is a radically different payment system, there are certain things you should know before you buy Bitcoin. Some of the important ones are outlined below:
- Bitcoin is volatile
As it is in its nascent stage, Bitcoin is influenced by a number of market factors. Firstly, it is dependent on the classic principle of supply and demand. Its value will rise automatically if more people want to buy Bitcoin, but if people start selling it off, the price is expected to fall. The problem is that Bitcoin’s value tends to fluctuate wildly and the unpredictability of its value has made it a very high-risk investment. Those who are after a quick money scheme should weigh the pros and cons before they decide to buy Bitcoin. Also, bear in mind that you shouldn’t invest more than you can afford to lose.
- Understand security before purchasing Bitcoin
Yes, it seems rather obvious, but the fact is that a lot of people tend to ignore it. Before you buy Bitcoin, it is essential that you learn about security. You may store your Bitcoins in a Bitcoin wallet, but if you lose them then they are gone forever. Recovering them is not a possibility because there is no concerned governing authority. Therefore, a reputed online wallet should be used and it should be backed up regularly. In fact, it is better to use a hardware wallet, which is safe from cyber threats.
- You cannot cancel Bitcoin transactions
It is not possible to cancel a transaction once it has been made over the Bitcoin network. When the transaction has been initiated and the Bitcoins leave your wallet, you cannot change your mind. Thus, it is vital to ensure you are making the right transaction. If an incorrect transaction is made, your best bet is to contact the receiver and ask them to return, which may or may not work out in your favor.
- Do some research about its acceptance
Before you buy Bitcoin, it is recommended that you do some research into it and find out where it is accepted.This will show you what your Bitcoin is worth in the country you are living in. After all, what is the purpose of investing in it when no one will accept Bitcoin? Some major companies such as Dell, Microsoft, WordPress and PayPal have begun to accept Bitcoins and other companies are also joining them as the popularity of the cryptocurrency is rising rapidly.