Since its launch, Bitcoin has gained a lot of popularity and become a buzzword in the economic world.
After gaining popularity, many traders and investors became attracted to Bitcoin, which resulted in its price going up.
Since it’s so different from traditional currencies, there’s a bit of a process for using it. To help you out, here are some important things you should consider.
15 things you should know before buying your first bitcoin.
1. Where can I buy Bitcoin?
These days, when buying bitcoin, like buying pizza, there are lots of platforms available for buying bitcoin and other cryptocurrencies in your local currency with almost any payment method, such as PayPal, PayTM, Bank Transfer, Google Pay, Credit Card, and more. You just have to visit the website, create an account, and place an order with any amount you want to buy.
2. Payment method.
This step is required when buying Bitcoin. On the platforms, you will see many payment options for buying Bitcoin, but maybe all those methods will not be supported in your country.
The most popular method to buy and sell Bitcoin is with a credit card, but if you are buying Bitcoin for the first time, then I will suggest you go for other payment methods like PayPal, Bank transfer, PayTM, or others. I have already written about it.
3. Choose the bitcoin wallet.
Select the perfect bitcoin wallet according to your knowledge and requirements for storing your coins. I recommend that you not use wallets that contain unnecessary features that you do not understand.
You can choose a single bitcoin wallet for only bitcoin or a multi – cryptocurrencies wallet to store over one crypto in case you want to invest in other cryptos. And also, don’t forget to download the mobile wallet of your wallet so you can easily track your profit.
But if you are buying bitcoin for trading and want to sell immediately after gaining some profit, then don’t waste your time and transaction fee for the wallet.
4. How to Secure Your Wallet.
This is the most necessary part of your bitcoin wallet. No matter what type of wallet you are using, your wallet must be fully secure.
Maybe you can find pieces of Bitcoin wallets on the internet, but not all wallets are secure and do not have sufficient security features that can fully defend your Bitcoin.
5. Do not store your bitcoin on the exchange website.
Like I said, store your crypto in a secure wallet, not on an exchange website or wallet. Because an exchange wallet has many issues, such as low-security features, deposit and withdraw limits, and more,
Maybe an exchange wallet refuses to give your money back, or it temporarily goes down, and as a result, you lose your money.
So before spending your money, carefully read the features of the wallet, especially the limit amount.
6. Volatile price.
Before you dive into the bitcoin world, you should be aware that bitcoin prices do not always increase.
Maybe you have seen lots of articles and crypto players claim that bitcoin is going high this year, but bitcoin prices always prove they were wrong, so stay away from articles like that, especially when you are a beginner in the crypto world.
You can imagine a time when one bitcoin was worth $13.50 at the start of 2013, but more than $1,000 by the end of the year.
You should know that these massive price fluctuations are possible before you dive into Bitcoin. So think before buying your first bitcoin.
Like your country’s currencies, Bitcoin is not recognized as a legal currency by the government. There are only a few countries that consider Bitcoin to be a legal currency, so make sure you keep a record of your bitcoin holdings and transactions.
But if you are a small crypto holder, then you can use it freely without worrying about taxes, but make sure you keep a record.
For US users, in the eyes of the IRS, Bitcoin counts as personal property, so general transaction taxes apply. If you don’t live in the U.S., be sure to check on your government’s tax policies for all cryptocurrencies, including Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and more.
8. Who accepts Bitcoin?
Before you invest in Bitcoin, clear yourself; you cannot use Bitcoin as payment everywhere.
Maybe there are some platforms that accept Bitcoin payments and allow you to do such things as mobile recharge and domain buying.
But now some major companies have started accepting Bitcoin as payment, but your use of Bitcoin will still be limited.
If you’re primarily interested in Bitcoin as a trading investment, this may not apply to you. Just in case you ever want to spend your Bitcoin on something, though, you should know your limitations.
9. Is fully Bitcoin anonymous?
Clear your myth if you think Bitcoin is anonymous and you can spend your money knowing no one. Bitcoin is private and transparent, not anonymous. You can buy and sell bitcoin without revealing your identity, but not the transaction. That means anyone can see the transaction history of an address on the Blockchain.
But if you want no one to see your transaction history, then apply a simple trick. If you use a different address each time you buy or use Bitcoin, you’ll remain anonymous because they won’t have any history. You can even find some Bitcoin wallets that change your address for you.
10. Invest only what you can afford.
I don’t think I need to explain this; you already know the price of bitcoin is highly volatile, so there is a high chance of loss of money and profit as well.
So only invest what you have; I do not recommend you take a loan or borrow money from someone to buy Bitcoin. Never, ever do this.
11. You can buy fractions of bitcoin.
The most frequently asked question from beginners is, “can I buy a small amount of Bitcoin?” Yes, you can. You can buy any amount of Bitcoin; it depends on how much money you have. You can buy 1 bitcoin or its fraction, like 0.1, 0.01, or 0.00001. So you don’t need $9700 to buy your first bitcoin.
12. Invest in an alternative to bitcoin.
If you think Bitcoin is expansive or want to invest in other cryptos that have a low volatile price, go on Coinmarketcap.com and see there are lots of coins listed on it that are highly profitable like Bitcoin.
But in order to buy an alternate coin, you have to buy Bitcoin or Ethereum Coin, and then you can exchange it for your alternate coin.
13. How can you use bitcoin?
As you have read, Bitcoin has limited uses, but in the past few years, major companies like Microsoft, KFC, and Burger King have started accepting Bitcoin payments because Bitcoin has taken over the cryptocurrency market.
It’s the largest and most well-known digital currency today. Many enormous companies are accepting Bitcoin as a legitimate source of funds. Click to see the major companies that accept Bitcoin payment.
14. High Fees.
In Bitcoin, the miner fee strongly matters. If you compromise with the miner fee during the transaction, your coin may be stuck for a long time.
It does not matter how much Bitcoin you are withdrawing; the miner fee will be the same. For example, if you withdraw $1000 or $100 worth of Bitcoin, the miner fee will be $1.5. So try to avoid withdrawing a slight amount of bitcoin.
Remember, a Bitcoin wallet does not charge any fees except miner fees.
15. Avoid Bitcoin scams.
Use your little knowledge to avoid internet scams. You should avoid some common scams that follow.
- Secure your wallet.
- Do not invest in long-term contracts.
- Avoid gambling websites.
- Avoid blockchain games.
- Stay away from websites that say we will double your Bitcoin in a month.
- Avoid exchanging low-liquidity alternate coins.
- Do not fall for Bitcoin miner websites.
- And more.