In a business, the way a bank is there acts as an intermediary for successfully transferring a certain amount by the customer to the business-Likewise there is Bitcoin which is taking the place of cash, and the customers who are paying the business through Bitcoin. In the above case, cash has been replaced by Bitcoin. Since there is no bank, so aren’t any transaction fees involved. But, trading with bitcoin is not possible in rural area because you need to have a strong internet connection to make a transaction with Bitcoin. So, it is a misconception that bitcoin will replace the fiat cash. Rather, bitcoin can be treated as an investment.
Bitcoin was founded back in 2009 by Satoshi Nakamoto. There are several crypto exchange platforms where Bitcoins and other digital currencies are traded widely. One of them is Bitcoin System, where you can easily purchase and sell Bitcoin on their homepage.
How to start investing?
While you are investing in Bitcoin, you first have to decide your risk tolerance, your investment plans, and choosing the best trading method because Bitcoin as a digital currency is highly volatile in nature. Because of this uncertainty, one can end up with a bad experience while exiting from the crypto market. So it is always necessary to research the asset you want to invest in. Knowing the entry and exit in the crypto market sometimes becomes too complex to know. Extensive research in the crypto market will take you a long way.
There are some retail stores that are accepting Bitcoins as a way of payment from their customer. Big Brands like Tesla also started accepting payments from Bitcoin, and the value of Bitcoin increased from thereon. But soon after, Elon Musk took a step backward by reversing the scenario by not accepting payments in Bitcoin, claiming that Bitcoin mining is causing harm to the environment.
If you are new to this scenario, then you can start by making your account on any of the apps which are giving crypto exchange services. While you are making your account, it would ask for certain documents, and afterward, it will cross verify the same within the next 24 hours. After that, your account is created. You will have a digital wallet where all your purchased digital currency will be stored. And if you wish to sell that currency, you can even do that. There is some very common question that can come to one’s mind while knowing about Bitcoin.
Some of them are answered below for your convenience.
- Why should I buy Bitcoin only and why not any other digital currency?
Bitcoin has emerged as a leader amongst all digital currencies. Investors are putting their money here because they want to make profits out of it without paying unnecessary taxes. But, you need to pay tax for your investment. It is true that you do not need to pay tax while you buy bitcoin, but you need to as it as an investment in your tax file.
- Will the price of Bitcoin always rise?
No, Bitcoin is a highly volatile currency. But one thing is certain its purchasing power will only increase with time. The prices of Bitcoin increase when more people come in to buy them because they are finite in numbers.
- Can I invest in any digital currency other than Bitcoin?
Yes, you can easily invest in any of the digital currencies other than Bitcoin as well. Some of them are- Coinbase, Dogecoin, Ethereum, Stellar, and many others.
How do retailers use Bitcoins?
Retailers can easily accept Bitcoin for the goods they sell or the services they provide. This is an easier way out to receive payment from the customers because there would be no third party like bank involved. Once the Retailer has received the Bitcoin, it will show in their Digital wallet itself. But, most of the retailers will convert your bitcoin into fiat currency like dollar because they cannot generate their invoice with bitcoin, as it is not a legal tender.
There will be a risk as well as profits involved while you put your money in Bitcoin. Bitcoin was also used previously for the trading of illegal goods and services because there is no governing body involved. But Blockchain technology is in its development stage, and things are getting better with time in it.