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A beginner’s guide to getting started with Bitcoins

Posted: September 24, 2018 at 7:47 pm   /   by   /   comments (0)

Bitcoin is a form of electronic currency that is often held as an investment. In the recent past, the use of cryptocurrencies such as bitcoin has grown in popularity. It is now accepted in many websites as payment for goods and services. More people are opting to trade in cryptocurrencies as opposed to fiat money because of bitcoins have lower transaction costs.

Wallets

To ensure security when trading in bitcoins, it’s good to invest in a good wallet. A wallet protects bitcoin users from losing their money to hackers. Since bitcoins are not tangible, the public and private keys have to be stored in wallets. Wallets can either be online or hardware store. Online wallets are good when one is storing a small number of bitcoins. Hardware wallets are good when one has a large pool of bitcoins. This is because higher numbers of bitcoins, increase the risk of being hacked.

Exchanges

Bitcoins are traded in exchanges which act as a market where buyers and sellers are matched. Buyers use fiat money and altcoins to purchase bitcoins.

Safety and Security

The exchange of bitcoins involves high levels of technology, meaning security and safety are not common issues with the currency. All bitcoin transactions are recorded in a ledger known as a blockchain. This ledger is very hard to modify, and that is why security is not a major issue with the currency. Many people now buy IOTA instead of using blockchain, and that is just as secure. However, security cannot be fully guaranteed. Processing mistakes may occur, and these may lead to the loss of bitcoins.

Management of Portfolios

Anyone who invests in bitcoins should manage their portfolio to ensure that they can track their sales and purchases in one place. There are many apps that can help you keep track of your profit and loss information. Portfolio management can also be done by the use of Google spreadsheets.

Trading

Trading in cryptocurrencies requires patience. Earning substantial profits does not happen instantly. An investor should practice critical thinking before deciding on trading. Otherwise, losses are likely to occur. It is wiser to invest for the long-term. Granted, errors will occur once in while, but these should always be viewed as learning moments and not failures.

Common Mistakes

A lot of caution should be observed by those intending to trade in bitcoins because the prices are highly volatile. If one does not understand how to trade and secure bitcoins from hackers, then it is not worth an investment. It is important that investors understand how digital currencies work before investing.

Conclusion

Cryptocurrencies have become popular in the recent past. Bitcoin is the most popular digital currency, and it is now used to pay for many online services. It is important for investors to store their currencies in wallets to ensure safety.

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