Interest in Bitcoin starting to percolate?
These beginner tips will shed some light on the process.
Bitcoin has been a mainstream topic for the better part of a decade now. Yet so much mystery and uncertainty surrounds the digital currency.
Much of the uncertainty with Bitcoin stems from its digital nature. The idea of currency with no physical form, or regulating body is foreign to most of us. Too foreign for us to properly comprehend.
Additional mystery shrouds Bitcoin, when it comes to the everyday interaction with the currency. How do I come to own Bitcoin? What do I do once I own Bitcoin? These are common questions surrounding cryptocurrency in general.
The following three tips will help you get from the outside looking in, and into the doorway.
Choosing Your Bitcoin Wallet
The first choice to be made when entering the world of Bitcoin, is what digital wallet to use?
For most, an online wallet will be the way to go. These are sites that are encrypted and secure and will allow you to access and manage your Bitcoin wallet in one system. Simple and efficient.
Coinbase is the largest of the online cryptocurrency wallets, and generally the easiest to use. A key factor to keep in mind with online wallets is always your safety, and the security of your currency. Coinbase is a secured and encrypted site. They store digital keys for all wallets on backed up servers, and your digital wallet is safe, even if something were to happen to Coinbase as an organization.
Alternatively, there is software you can purchase and install on a local hard drive to store your Bitcoin. Some of these backup to servers, but not all. You run the risk here of the software crashing or corrupting, or a backup to the server being lost. There is increased potential for loss of digital key with this method.
Finally, there is physical storage. In its simplest form, your Bitcoin wallet is a digital key that can be used to access your funds. Some choose to store this on a USB drive or some other storage method. The main problem with this method, not surprisingly, is the risk of losing the physical storage device.
Choosing Your Coin Exchange
Just like trading stocks, Bitcoin has its own platforms through which you can buy, sell, and exchange the digital currency. New ones are popping up every day.
Many exchanges will also provide a digital wallet interface for you to store your Bitcoin. Using the wallet provided by your exchange is a decision that will ultimately be up to you. The upside of this will be ease of use, as all of your digital wealth will be stored and utilized in one system. The downside is they may be less secure than the private wallets and may not be as sophisticated in regard to the interface or features.
Your exchange will also let you transfer your funds into a third-party wallet without any fees.
Only Invest Money You Can Afford to Lose
It goes without saying, but you can never be too safe. Bitcoin is an investment. Just like a stock purchase, a mutual fund investment, or a purchase in a commodity like gold or silver.
All investments must be taken with the assumption of risk, and loss of principal. Only invest with money you can truly afford to lose.