Especially in the financial world, many talk about cryptocurrencies and Bitcoins, but only a few people can really explain this topic in a tangible way.
Luckily, a group of professional cryptocurrency investors, who have been using a DCA bot for years to generate profits automatically, wanted to share with us these facts that are always present in their day to day life.
Today we want to talk thoroughly about Bitcoin, who profits – and where dangers lie in dealing with the digital currency.
1st Fact: The Famous BTC is a Real Currency
It’s easy to dismiss Bitcoin as somehow “not quite real currency.” That’s basically because some characteristics completely distinguish the cryptocurrency from the euro, dollar, yen, and the rest of the fiat gang.There is no large state behind Bitcoin to ensure the integrity of the currency. It is practically a currency that can be accepted all over the world and does not recognize typical country borders. The inventor of Bitcoins has no more authority over the currency than any other person.
Anyone interested can earn Bitcoins digital money at home by mining it themselves. This is in contrast to the euro, for example, where “real” work must first be investedInstead of people, computers work to generate this currency – and that in turn costs electricity.Bitcoins are not available in infinite quantities. 21 million pieces are issued in total, after which the end is reached.
Therefore, it is not possible to “print money” and thus devalue the currency sooner or later. This also puts a stop to potential inflation.Nevertheless, Bitcoin is a currency like any other. Anyone who owns this currency can pay with it. Not every merchant accepts Bitcoin so far – but not every merchant accepts euros, dollars, or other currencies.far, at least, Bitcoin is not yet an issue for the mainstream. Sooner or later, however, this could change due to courageous merchants and people who have confidence in this system.
2nd Fact: Bitcoins Are Safe
To understand why Bitcoins (and many other cryptocurrencies) are so secure, we first need to look a bit at the technology behind them.Bitcoin has an extensive cash ledger that records all transactions ever made and future transactions. This database is called the blockchain.Anyone can download it if needed; when installing the Bitcoin Core application on a computer, fohttp://r example, this happens automatically.The database is currently (as of March 2022) about 324 GB in size. The high level of security when dealing with this currency is regulated by several measures related to the blockchain:
- All transactions are stored in encrypted form. Within the blockchain, it is visible which Bitcoin address has transferred how many Bitcoins to which other address – but no more. Names, addresses, or e-mail addresses, for example, cannot be found out from the data it contains.
- The blockchain permanently monitors itself. Millions of computers worldwide ensure the integrity of the blockchain. If, for example, a person were to manipulate the database on his own computer in order to transfer money to himself, all other computers would notice this and repair the error.
- When transferring Bitcoins, there are no insecure interfaces. For example, if a person transfers money to an online store, it is done through banks. These payment transfers are potentially vulnerable. Middlemen like banks are not necessary when dealing with Bitcoins, so a potential vulnerability is eliminated.
In other words, it is extremely unlikely that fraud will occur when dealing with Bitcoins. Since Bitcoin does not depend on arbitrary government action, it is considered a safe medium for paying for all kinds of items and services, even in times of crisis.
3rd Fact: Investing in Bitcoins is Risky
Given the rapid price jumps of Bitcoin, it is tempting to exchange money into Bitcoins and profit from the price jumps.The cryptocurrency has been dubbed as digital gold, among other things. Nevertheless, it is not necessarily advisable to want to earn money with Bitcoins.Because: An investment is always linked to a high risk. Just as quickly as it goes uphill, it can also go down again in reverse. $1,000 invested today can be worth $2,000 in a month – or $500.Bitcoins are considered to be an extremely volatile currency whose price trend zigzags and is difficult to predict. Therefore, the following always applies:
- Bitcoin should only be traded with money that is freely available. So, if owning 2,000 dollars more or less does not matter in real life, this money can go into Bitcoins. Otherwise, no.
- All security measures should be taken to make access to Bitcoins as difficult as possible. If passwords and other important data are lost, there is a huge risk of damage, depending on the size of the investment.
- The price of all cryptocurrencies is highly dependent on world events, it is explained extensively, for example, on this page. If, for example, a large company announces that it will accept Bitcoins as a means of payment, it usually goes steeply upwards. If an economist comments and announces that Bitcoin is a hoax, the price drops accordingly. Strong nerves are therefore a basic requirement when trading Bitcoins.
Bitcoin and all other cryptocurrencies still have a long way to go, but it is true that they have already come a long way in the financial worldIt is true that every day there are more things to take into account, but with these three facts, you will already be one step closer to a proper understanding of the blockchain world.Now, do you think investing in Bitcoin might be something for you? If so, then maybe it’s time to try a reliable trading bot.