Investing in Bitcoin: What you Should Know

To invest in Bitcoin profitably, it is necessary to follow some rules that allow you to avoid scams and always be informed about the evolution of the markets. One of the first things you need to pay attention to is choosing which brokers you should rely on to buy Bitcoin.

It is advisable to learn to deepen and get to know the characteristics of the best platforms to prevent the unexpected. eToro, for example, is one of the suggested companies because it allows you to obtain positive results:

  • Providing information regarding the most appropriate tools to operate safely
  • Allowing you to practice various investment techniques, including social trading
  • Offering the possibility of investing in Bitcoins in compliance with the highest security standards.

Using the right trading tools is essential. Click here for the best tool that can help you convert different currencies. After choosing a secure and reliable platform, you should familiarize yourself with how the trade works.

What are Bitcoins?

If you plan to start investing in Bitcoin, the first step to take can only be represented by a thorough knowledge of this asset and its functioning. As is known, Bitcoin is the best known and most widespread cryptocurrency in the world.

Its birth dates back to 2009 and can be traced back to Satoshi Nakamoto, a character who nothing is known about even today (and some suspect that there is not a single person but a team of experts) behind that name. Just in 2009, a version of the source code of this virtual currency was released for the first time, and at the same time, the first 50 bitcoins were mined for what has been called the genesis block.

How mining works

Mining is the procedure necessary to perform to confirm the various transactions intended to be stored inside the blockchain. If you do not understand the operation, it is difficult to grasp all the other most important features of the Bitcoin world. In the past, individuals could do mining, but now this is no longer the case.

Currently, a very high number of devices are required for mining: the various devices must work simultaneously and reach such a high computing power that it can even affect the balance of the environment.

This is why mining nowadays cannot be considered an appropriate source of profit, as the earnings are still lower than the expenses that have to be incurred.

How transactions are carried out

To perform Bitcoin transactions, you need:

  • A wallet. That is, to a program that allows the management of the cryptocurrency.
  • Various pairs of private keys, which are contained within the wallet and allow you to obtain the Bitcoin address and public keys.
  • Public keys, which represent the instrument through which the possession of the private key can be indicated.

The private keys can not be made known, and they are the ones to allow to sign transactions.

Buy Bitcoin with Paypal

Many prefer using Paypal to buy or sell Bitcoin. The reason for this preference is mainly due to the sheer lack of security of exchange. While the regulators control the brokers, no one controls the exchanges.

It is not uncommon for a cryptocurrency exchange to resell credit card information on the black market. Using a credit card to buy Bitcoin on an exchange can be risky. Using Paypal, on the other hand, provides a little more security, but hardly any exchange accepts Paypal as a payment method.

Instead, CFD brokers accept Paypal in addition to credit card or wire transfer. In this case, the choice of Paypal is not dictated by security reasons but for simple practicality (some people find it more convenient to use Paypal instead of credit cards).

Is it safe to invest in Bitcoin?

In addition to investing in Bitcoin through its platform (accessible from its website), there are now several possibilities for those who would like to achieve economic results, including trading with Bitcoin through online CFD brokers.

CFDs are special financial instruments that reproduce the performance of another financial instrument, which serves as a reference or underlying. In the case of Bitcoin CFDs, they replicate the performance of the Bitcoin price.

Note: When trading Bitcoin CFDs, you are not buying Bitcoins but trading stocks for their value. This means that if you buy a Bitcoin CFD, you will not actually get hold of Bitcoin. Furthermore, Bitcoin CFD trading, unlike a traditional investment, is a short-term operation.

The CFD allows you to open a position in Bitcoin upwards (long position) or downwards (short position), then close it when it is considered appropriate to obtain an economic result. The financial result depends on the price change that occurs from the moment the position is opened to the moment it is closed.

The economic result will be a gain if the market moves as expected, while it will be a loss if the trend goes in the opposite direction. The profits and losses from trading on Bitcoin will be proportional to the price changes.

How to invest in Bitcoin safely

Only regulated and authorized brokers allow you to invest in Bitcoin safely. However, the situation is different for exchanges, which offer much fewer guarantees: those who use them run the risk of being cheated or scammed, also because it is a world over which the authorities have no control.

Bitcoin scam – What to know

There are several ways that allow you to earn with Bitcoins, although this does not mean that all the operations carried out are destined to be successful. A decisive role is played by the platform you choose, and it is always important to recognize fraudulent systems.

An example is the one that comes from Bitcoin era. In reality, there have also been other scams that have triggered negative consequences: not only because they have resulted in economic losses for many people but also because they have jeopardized the trust that many people nurture towards virtual currencies.

In short, if you want to be guaranteed and protected, all you can do is focus on a certified platform.

WE SAID THIS: What other tips would you suggest?

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