10 Things to Know Before Getting Your First Bitcoin

3 min reading

You can certainly make a profit by investing in Bitcoin (BTC), but before going on an exchange and making your first BTC purchase, here are 10 things you should know about the world’s number one coin.

a man with a bitcoin coin

Bitcoins Are Decentralized

Bitcoin was built on a decentralized principle. This means that the currency is not managed or owned by one single entity, like fiats. But since there is no one controlling BTC, you are the only one responsible if you get scammed or lose your Bitcoin, as you cannot report these issues to a higher authority.

Wallet Security

Like money stored in a bank account, Bitcoin needs to be stored in a Bitcoin wallet. But keep in mind that not all wallets are secure. You have to perform frequent backups, encryptions, and securely store all your passwords.

Buying Bitcoin

Bitcoin can be purchased on various platforms and exchanges, but not all of them are reliable. You have to be very careful about what exchange service you use. Look for regulated and licensed exchanges that have a good reputation online and check the rates, so they are in line with the rest of the market. Considerably different rates are a warning sign. There is a great report on things to watch before trading Bitcoin made by Cointelegraph. It provides a lot of information and useful tips for new traders as well.

Price Volatility

The limited supply of Bitcoin makes it very volatile in price when a change in demand occurs. This is why BTC’s price in relation to fiat currency can change dramatically in just a few hours. You have to be aware that Bitcoin could gain or lose hundreds or even thousands of dollars in just a day.

Reward Halving

A halving decreases the block reward of BTC by half once every four years until all 21 million Bitcoins are in circulation. This is an anti-inflation measure which also impacts the price of the coin, before and after the event. In the past, BTC saw a huge increase in price after a halving.

Not Completely Anonymous

Bitcoin is somewhat anonymous, as transactions don’t come with any personal information, but the Bitcoin addresses used in the transactions are public.

You can change BTC addresses often to prevent someone from linking you to a certain wallet, and there are even some Bitcoin wallets that change your address for you.

Bitcoin Not Accepted Everywhere

While it is the most popular crypto, not all online services accept Bitcoin as a form of payment. This limits your options if you want to use the coin for purchasing items online. Although, there are more and more places where cryptocurrencies can be used. They can be transferred faster, and with much lower fees.

Low Insurance Options

Cryptocurrency like Bitcoin is not covered by The Security Investor Protection Act (SIPA), meaning it is difficult to insure investments. While there are some companies that provide cryptocurrency insurance, they may either not be as reliable or offer lower protection than SIPA.

Bitcoin Is Taxable

Even though Bitcoin is not considered a legal tender, it is still treated as an investment, which means that it is taxable. In the US, you have to keep a record of your Bitcoin holdings and transactions for tax season. Different countries have diverse taxation laws when it comes to cryptos.

Bitcoin Is Still Evolving

Bitcoin is a new currency, based on a still-developing technology, so it is not as established as traditional currencies. There are many issues that require further development and updates, but BTC will surely become more secure and reliable over time.

If you already own BTC, you can multiply your crypto with 1xBit. 1xBit is a fully anonymous sportsbook and casino that supports over 20 cryptos, including Bitcoin.

You can sign up for a multi-currency account in just a few seconds and start betting to multiply your cryptos immediately. There are no transaction fees charged, and payouts are instantly credited.

What’s more, new users are also eligible to claim a sign-up bonus of 7 BTC and benefit from other promotions. Use your Bitcoin to make more on 1xBit!

Please note, that trading on such cryptocurrency platforms is not allowed in all countries. Before using it, please check regulations within your region.