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How to invest in Bitcoins? Things to know before investing in bitcoins
What is Bitcoin?
Bitcoin is a cryptocurrency designed by Satoshi Nakamoto. It is completely decentralized and is not regulated by any government or central bank. You can use bitcoins to send and receive payments from any person anywhere in the world. There is no levy or charges associated with bitcoins. Bitcoin transactions can be made without revealing user identity, and they can be encrypted to ensure safety.
Once you own biocoins, they are like any asset. They can be compared to physical Gold. Often bitcoins are referred to as ‘Digital Gold’. Bitcoins are not the only Cryptocurrencies. Ethereum, Lifecoin, Namecoin, Primecoin and Ripple etc are examples of other cryptocurrencies.
Why invest in Bitcoins?
In 2014, a venture capitalist named Draper bought 30,000 bitcoins the marketprice of which was $600 at that time. Now, the value of those bit coins are estimated to be $70 million
Due to its ease of use and freedom from transaction costs, bitcoins are preferred by many people around the world. It cannot be manipulated by governments or politicians and furthermore, it cannot be inflated or deflated artificially. It is seen that despite warning from the central bank RBI, 2,500 Indians are found to be using Bitcoins daily.
At the start of 2012, there were 11 million bitcoins in existence. It is estimated that by 2140, there would be around 20 million bitcoins.
Mine your own bitcoins
This was the way most people acquired Bitcoins when the cryptocurrency initially came into existence years ago. It’s like people digging for gold. Bitcoin mining needs expensive hardware and it also consumes a lot of electricity that the cost often outweighs the value of bitcoins. More miners have entered today and hence bitcoin mining has become difficult.
Buy Bitcoins from an exchange
Like buying stocks, you could buy Bitcoins from a bitcoin exchange. But bear in mind that Bitcoin is a risky investment and hence you should not invest more than what you are willing to lose. After buying bitcoins, store them into your personal wallet
Trading your Bitcoins
Just like stock trading, you can trade using your bitcoins. You can buy bitcoins when they are low in value and sell them when they reach higher prices.
Following is the list of popular bitcoin trading platforms:
Invest in Bitcoin startups
Once an industry booms, various startups associated with the industry spring up. Bitcoin is no exception
Various startups are engaged in the bitcoin business. People can invest in these startups. Bitcoin exchanges themselves are the prominent startups. Without exchanges, it would not be possible to buy and sell bitcoins.
Apart from exchanges, bitcoins startups offer other services also. Bitli.st enables startups to connect with users. Blade is a startup which offers a pre-paid card that users can top up with bitcoins and then use it anywhere. Legderwallet is a company that offer bitcoin wallets. Elliptic is a startup which is involved in secure storage of bitcoins. It also insures the bitcoins it holds