Bitcoin Investing: The How and Why of What You Need to Know

Bitcoin Investing

With bitcoin price projections only going up, now is the time to invest in bitcoin. Here’s what you need to know.

Since 2017, bitcoin has undoubtedly been a hot topic of discussion and debate the world over. This ubiquitous discussion alongside mass adoption and ease of access to new users means that bitcoins are being snatched up every day at an ever-increasing rate.

Where one bitcoin cost just around $1 USD for years, you’d be hard-pressed to find a coin under $6,000 in today’s market. So while the market does indeed still see it’s share of incredibly volatile dips and rallies- the investment potential still remains solid.

The hardest part about investing in bitcoin is generally twofold. As access is simple and anyone anywhere can pretty easily buy bitcoin at any time, knowing when to buy is paramount. Getting used to the extreme oscillations and unusual market predictors can make it a tough sea to navigate- even for seasoned investors.

The other side of the bitcoin, shall we say, is that keeping your coins secure and anonymous sure ain’t what it used to be. With the continued adoption of the coin itself, bitcoin has begun to struggle in terms of sticking to its original manifesto. But with a bit of flair and the best bitcoin tumbler you can find- this is also a fairly easy hurdle to jump.


Bitcoin Investing: Why Invest Now

As they say, no time like the present. This couldn’t be any more true, specifically when it comes to investing and securing your coins. Bitcoin is similar to gold in that it’s scarce and has many different useful applications.

Just like that which glitters, there is a finite amount of bitcoin in existence. 21 million bitcoins in fact. This means that unlike fiat currencies, bitcoin cannot be arbitrarily produced in order to affect value. Giving bitcoin part of its predictable value.

Of the 21 million coins that are in existence, 17.3 million of them are already in circulation. With the remaining 3.7 million to be released over the next 21 years. With this, bitcoin creates an artificial scarcity. Meaning that as fewer coins are released, and more of the stock goes into general circulation, they become ever more difficult to get ahold of.

Bitcoin is released into the market as certain people help to verify the transactions that happen every day. This is the underlying technology of bitcoin and what keeps it from needing a centralized power. In the fiat world, banks and other intermediaries are there to ensure that your transactions take place and that they are valid.

Because bitcoin is decentralized, it doesn’t use an intermediary to confirm these transactions. So how exactly are these transactions confirmed?

We’re glad you asked.

The bitcoin network is essentially millions of computers (nodes) that are connected via an online network. Some of these nodes are run by specialized users called miners. These miners solve complex mathematical algorithms that validate any bitcoin transaction that happens. Once these transactions are validated, they are sealed in a section on an online public ledger. Each section is referred to as a block.

As blocks are verified and sealed, they become part of a historical chain of verified data that consists of other blocks. This is called the “blockchain”. For every block produced, the miners that help make it get rewarded fresh bitcoin from the reserves. The amount they get rewarded each time changes.

This is called “halving”. That’s because roughly every four years or 210,000 blocks, the reward that each miner is paid gets cut in half. Meaning that as bitcoin is more often used, it becomes even more scarce. Increasing its value. Currently, miners are awarded 12.5 bitcoins per block, but that number is due to change shortly. So today, bitcoins are even harder to get ahold of than they were yesterday, and it will become even more scarce tomorrow.

That’s not all. Of the 17.3 million coins in circulation currently, only a fraction of that is actually up for grabs. Millions of bitcoins have been lost or stolen, and the other lion’s share of them belong to “whale investors”. Whale investors are a handful of people that own more than 5 million of the bitcoins currently in circulation.

So you can see why getting in early might be the difference between getting in at all and being left to watch from the sidelines.


Bitcoin Investing: How to Invest in Bitcoin Safely

Beyond being scarce, bitcoins are incredibly useful. They provide a way for seamless and anonymous transactions to transpire online. The monetary policy that they were created with is reliable and verifiable. This has to do with the artificial scarcity and the blockchain technology that we just talked about.

There’s no centralized power, so you can’t be penalized should something go wrong. There are no conversion fees, making bitcoin a truly global currency. Thus, bitcoin is largely untouched by censorship and regulation. That being said, it can be easy to fall prey to scams and hackers if you’re not quite sure of what you’re doing.

Safely investing in bitcoin isn’t difficult, but it does take a small amount of know-how. Choosing one of the many trusted bitcoin exchanges is probably a safe bet if you’re just starting out. There are also P2P exchanges (which stands for peer-to-peer). These exchanges are more securely anonymous and rarely require users to exchange personal information. In certain countries, Bitcoin ATMs exist. Bitcoin ATMs are essentially a bitcoin exchange IRL. Most accept cash for bitcoin and then deposit your coins into your digital wallet.


Bitcoin Investing: How to Keep Your Bitcoin Safe

Which brings us to the next “must” when it comes to buying bitcoin. You must have a digital wallet. Depending on what country you live in, you may be required to offer personally identifying information (like bank details and social security numbers for US folk) in order to set up your wallet.

If this is something you have to do to snag some bitcoin, don’t fret, but wait to use your coins until they have been thoroughly cleaned and put into an anonymous wallet. Otherwise, your bitcoin can be subject to government interference and regulation. There are ways of clearing your coins of any connection they may have with your information.

Finding the best bitcoin mixer to suit your needs along with a strongly anonymous bitcoin wallet are the best ways to rid your coins of your details. More in-depth information on how to do this can be found on our blog.

The takeaway? Invest early, stay smart, and always keep those coins clean. This ensures that you can easily keep your foot in the door of what is poised to be the most exciting currency exchange on earth.


Read more articles about Bitcoin like: Bitcoin 2020: A Year to Exceed Expectations 

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