Whenever a commodity becomes a hot a cake it is predictable that people who are looking to invest as well as speculators trying to make a quick buck will troop into it.
Bitcoin has had a massive 2017 and there are strong indications it might end up multiplying over 9 times its value from the beginning of this year. If you are one of us that want to take this plunge and make your first Bitcoin purchase, it is very important to know that this is not ordinary money that it has its own specific kinds of behavior. Before you take a step in investing in anything it is very important to have certain background knowledge about it, so that your decision to buy will be an educated choice.
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Here are 3 key things to note when buying Bitcoin:
Bitcoin is owned by No One, Bitcoin is owned by Everyone
One of the first things to note to make your decision to buy Bitcoin one fully knowing of the variables is that Bitcoin has no single owner, or entity. It is not owned by any government or company, rather it is the sum total of the users on its network that owned it, each according to their own “share” Bitcoin is a completely decentralized virtual currency and is not backed by any legal framework as of yet. And as such any loss you incur will b at your own risk most likely, as there is no backing authority to hold responsible for such loses. Like every commodity with the possibility of high profits, there are also possibilities of making losses as well.
Bank at Owner’s Risk
Another very important thing to understand is that once you buy Bitcoin and store in your own wallet, its safety is completely your responsibility as no commercial bank will accept it to keep for you. And also that once a Bitcoin transaction is initiated, it cannot be reversed, and as such keeping your Bitcoin wallet absolutely secure cannot be overemphasized. Keeping your Bitcoin safe is completely at your risk therefore it is critical that you take every safety measure to make sure that your wallet is not compromised, or it might be exposed to be stolen by a growing number sophisticated Bitcoin thieves.
Volatility
The last key factor to note is that you must know that Bitcoin is not like your typical stocks, precious metals or oil with a considerable level of predictability to their prices. Bitcoin can be highly volatile, as it can swing dozens of percents up or down within the space of a few hours. A host of issues can make the price of Bitcoin Jitter. Chief among them is when news of a crackdown or restriction filters through from one of its major markets. The last such incident was when China closed all its biggest cryptocurrency exchanges which shook the price of the whole cryptocurrency industry. However, historically Bitcoin has always managed to rise back even stronger whenever it goes through such trying periods.