What should I know before buying Bitcoin?

Do you want to venture into the Bitcoin World? There are many people out there like you. However, many have done a grievous mistake of just hearing about Bitcoin and the fortunes it brings and diving in. The consequence has been some losing their capital or facing various challenges. To invest in Bitcoin, it is important to know the nitty-gritty of what it is, and how it operates. It is therefore prudent to do complete and intensive research on the subject. In this article I have listed some aspects that will be crucial in understanding Bitcoin. Let us have a look at them.

Also Read: How to Buy Bitcoin in 2 Minutes

  • Volatility

Maybe you have heard about this fact but you do not know what it means. Volatility means instability or unpredictability. Bitcoin’s price is unpredictable, fluctuates, swings, and changes any moment either way without warning. The swings vary in size; it could be a small or big margin. What does this mean? Take the case of 2017 December; the price went as high as $19,000 only to a downtrend to a low of $12,000 within a week. It follows the supply and demand trend. As more people are buying, it gains value, whereas when more traders sell, it loses value. Another important aspect is that a positive market news about the coin influences its price upwards. However, news, on the contrary, tend to push the price downwards.

  • Taxability

Most countries have implemented legislation to tax Bitcoin. In the US, you shall be taxed for the proceeds or profit from Bitcoin known as Eventual bitcoin Profits. In other jurisdictions, you will be required to declare the profits or losses made for taxation purposes. Before you invest in Bitcoin, liaise with the local authorities to know what kind of tax you will be paying.

  • Bitcoin is a Form of Payment

Not only is Bitcoin an investment but also a form of payment. The crypto could be used to pay for services and goods as Fiat Currency does. There are mobile Bitcoin wallets, and Debit cards that can be used to pay for goods. However, not all merchants accept Bitcoin; it is your responsibility to do your research before you make a purchase. The good thing, more and more merchants are embracing the digital revolution therefore, soon or later almost all of them might be accepting Bitcoin as a form of payment.

  • Anyone Can Use or Trade in Bitcoin

Whether you are a newbie or an expert, you can still trade or use this wonder coin. It is not a preserve for some people. The traditional markets are sometimes rich people-friendly however, with Bitcoin it is not so. Its decentralization nature makes it accessible to everyone so long they have network connectivity.

  • It is the most Transparent and Fast Mode of Payment

Its Blockchain technology nature makes its payment transactions, traceable, immutable and irreversible. Its transactions are very fast, and anyone can see. Another aspect is the ability to self-regulate reducing the time and fees spent on third parties.

There are many more must know About Bitcoin, we will be revisiting them in our next post. To remain relevant in the Bitcoin world, you must be knowledgeable and patient.

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