Want To Buy Bitcoin: Must Read This
You Must Understand Bitcoin Before Investing Into It
If you are reading these lines, there are high chances that you must have heard about bitcoin. It is a cryptocurrency or digital currency and is used as a payment system as well in many parts of the world (But not in India as yet). It was established in 2009 by Satoshi Nakamoto. But it has no central bank or regulatory authority supporting it. You must know that the it doesn’t exist in physical form. It is made by computers and stored in a digital wallet.
Is Bitcoin The Only Cryptocurrency
Is Bitcoin Legal And Regulated in India
Why Bitcoin Is Becoming Popular
How Can One Buy Bitcoin
Bitcoin can be purchased online and stored in digital wallet. You can choose any bitcoin exchange to find the wallet. These wallet can be selected based on features and security provided by the exchange. After that, you can create your account by registering on the selected exchange. This will give you a secure place to store your bitcoin, and easy payment methods to convert your amount into or out of it. You will have to link your bank account with wallet. After completing verification process, you can start using your account to purchase bitcoins. On some of the exchanges, you may purchase through credit or debit cards as well. There is a KYC requirement and you need to verify your identity by uploading the image of your PAN card.
Risks Associated With Investment In Bitcoin
- The first and foremost risk is that it is not regulated. It means that in case of any fraud, you can’t approach any grievance body or regulator.
- Second risk is that Bitcoin transactions are irreversible. Remember that your digital wallet can be opened only by username and password. In case you forget the password, your money inside the wallet will be worthless. This is because of the reason that the password of Bitcoin wallet is irrecoverable.
- Third risk is the high volatile nature of the digital currency. The uncertainty with which its trading is happening all over the world, makes it a highly risky asset class. That’s why electronic payments expert Dave Birch has said that “one doesn’t invest in bitcoin, one gambles on it”. Remember that the value of crypto currency is determined by perception. While determining the value, the factors like technology, popularity, security and understanding of e-money are considered.
Also read: PF is an investment tool which is best for risk averse investors. Know various types of PF where you can invest.
How To Do Safe Investment In Bitcoin
It is highly advisable for anyone planning to buy the bitcoin that he should only invest as much as he is prepared to lose. You can start small. For instance, you can start by investing 2 to 3 per cent of your total investment corpus.
Also never disclose your user name or password of your digital currency wallet. You should add one extra layer or protection by creating a backup of storing cryptocurrencies. You can store them in an offline wallet like an SD card.
Last but not the least thing, which I would say that with bitcoin you may hit jackpot but at the same time chances are there that you can bite the dust. So do all the due diligence before investment. And, if you do have any question or doubt about it, just ask me. I will be happy to help.