Mining Bitcoin, Trusting Bitcoin

DIFFERENT WAYS OF INVESTING IN BITCOINS

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For starters, Bitcoin is a form of digitalized payment system that executes without banks or any intermediaries. It is purely peer to peer, has no centralized body, no third party or regulators and most importantly, users are anonymous and fees are miniscule. Bitcoin was introduced by Satoshi Nakamoto back in 2009.

I mean, look at it this way, if the internet goes down for even 15 minutes, every digitized system will also be unavailable for that period of time. We are so reliant on the internet and no wonder Bitcoin, the internet money has gained so much traction.

Then again, Bitcoin is valuable and scarce just like money. Let’s not even compare it to money, Gold bullions is a perfect example because it can be mined just like Bitcoin. You see both have value and as we continue mining, they continue being scarce and pricy. The same applies to Bitcoin. 21M of them are going to be circulated by 2140 and by that time they would be so scarce and valuable that it’s worth taking a look at them now.

What you should ask yourself before starting your Journey

There are several factors that determine the investment in Bitcoin technology. Before venturing into Bitcoin investment, one should first ask himself/herself some critical questions:

  1. Do you want to buy the cryptocurrency with the aim of making a profit?
  2. Do you want to invest in Bitcoin-related companies?
  3. Are you looking to trade with Bitcoin currencies?

 

BITCOIN INVESTMENT STYLES

Buy-Hold

This is what most people do with the hope that the cryptocurrency will appreciate in the coming days, months or years. It’s called hodling and the strategy itself is long term. If you want to invest this way then you should only trust yourself. Do your own research and don’t listen to what experts are saying especially when it comes to “when to buy your Bitcoins”.

It is very wise to note that Bitcoin investment is a very risky venture and one must always be ready to take risks. In deciding on a time to buy Bitcoin currency, one must take some precautions which include:

  • Don’t invest more than you can lose. This is pure common sense.
  • Buy your Bitcoins and move them to a safe wallet. A hardware wallet is preffered.
  • Vet your exchange or broker before committing your hard earned cash. There are many swindlers and “facilitators” out there bent on sucking you dry.

 

Invest by Trading Bitcoins

Don’t follow this path if you are not a trader. Unlike the first strategy where you buy and hold for say 5 years, here you will be buying low and selling high. Just like in the stock market. However, unless you have some steel, experience and monk discipline, this is generally a risky way of investing. Bitcoin prices are also volatile so you might end up buying at peaks and lose all your Bitcoins when prices drop.

Invest by Mining Bitcoins

Ok, you can also decide to mine Bitcoins but I will just be straight up with you. Yes, one coin now is worth more than $15,000 and indeed it is lucrative. However, setting up is so capital intensive and not let’s talk about electricity bills that you will be slapped with. In my opinion, if you didn’t start this back in 2010 when the cost was low and you could mine atleast 50 coins a day it will be futile now. It is dominated by big players and these guys set up their mines in Greenland or Iceland where the cost of electricity is almost free. I also don’t trust companies who claim that they can mine for you. Most businesses claiming to be Bitcoin cloud miners are often scams. You are better off buying Bitcoins with that money. Plus it’s safer.

 

So should you invest in Bitcoins?

Definitely! But first do this:

Educate yourself. There are no shortcuts here. Know all the nitty gritties and be willing to learn more when the opportunity presents itself. By now you know Bitcoin prices are volatile and if you buy at the wrong time, you will burn yourself.

Overly, if you time the market correctly and buy-hold these gems at the right time, you will end up with a good ROI.

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