The white elephant in the currency room
Most people have heard of Bitcoin, but few know what it is, how it works or where to buy it. Today I will answer frequently asked questions about Bitcoin, how to purchase it and give you some basic security guidelines.
What is Bitcoin?
Bitcoin is a digital currency (Also known as a crpytocurrency or electronic payment system) that was designed to eliminate the need for any central authority (banks, Paypal, CashApp, etc) to make secure and verified transactions. Bitcoin creates trustless payments on the internet. This means that two users can send money to each other much like cash. The operating system also allows users to confirm messages, transactions and data using public key encryption.
Is Bitcoin traceable?
Bitcoin is pseudonymous. A Bitcoin wallet can be created without the users identity being exposed but all transactions made with Bitcoin are open and visible for anyone to see at any time and never disappear. It is the most transparent form of money exchanges.
Can I get rich by trading Bitcoin?
You can make a high income trading any asset class if you're disciplined and have the skills and necessary capital. However, Bitcoin can be very challenging to trade and only presents trading opportunities seasonally/infrequently.
Should I HODL (Hold On For Dear Life) Bitcoin?
You should never hold any asset with no questions asked. You need to determine why you are holding it and if it doesn't meet your standards, let it go.
Is Bitcoin a good investment?
Investments must generate cash flow or assets that produce cash flow, without depleting your initial capital. Owning Bitcoin will never produce more Bitcoin. Therefore, it is not a good investment.
With that being said, there is a lot of opportunity to capitalize on its price fluctuations. The pro would be a large equity value return (if you buy at the right time). The con is that you must sell your Bitcoin to reap any financial rewards.
Where can I buy Bitcoin?
You can safely buy Bitcoin at Coinbase.com . Coinbase is FDIC insured and easy to use. You will also have access to their trading platform, which includes the ability to trade with margin.
Securing your Bitcoin
Store your private keys on pen and paper only and lock these private keys where they are safe from fire, water damage or theft. Always use 2- FA on any crypto related website accounts. For storing your long term holds, it is wise to not keep your coins on an exchange of any kind and instead use a hardware wallet. It is important to purchase a hardware waller directly from its manufacturer, as many third party hardware wallets have been found containing malware to steal your coins. I recommend using Ledger.