All about bitcoin | How to invest in bitcoin | How does it work | Price Index | P2P Money | How to Invest through PayPal |

All about bitcoin | How to invest in bitcoin | How does it work | Price Index | P2P Money| How to Invest through PayPal |

Bitcoin is a digital currency for use in peer-to-peer online transactions. Introduced in 2008 by a person or a group named Satoshi Nakamoto, Bitcoin is most prominent of a group of virtual currencies that have no central issuing authority.

Investing in Bitcoin can seem to be complicated but it is much easier when you learn or follow the steps. Buying Bitcoins is much easier by the days and legitimacy of the exchanges and wallets is growing as well.

What do you need to invest in bitcoin?

Bitcoin investor needs a cryptocurrency exchange account, personal identification documents if you're using a KYC Platform, a secure internet connection & a method of payment.

How to Invest in Bitcoin?

Bitcoin

Step One: Choose an Exchange:

Signing up for a cryptocurrency exchange will allow you to buy, sell, and hold cryptocurrency. It is generally best practice to use an exchange that allows its users to also withdrawal their crypto to their own personal online wallet for safer keeping. For those looking to trade Bitcoin or other cryptocurrencies, this feature may not matter.

Remember when creating a cryptocurrency exchange account is to use safe internet practices. This includes using two-factor authentication and using a password that is unique and long, including a variety of lowercase letters, capitalized letters, special characters, and numbers.

Step Two: Connect Your Exchange to a Payment Option

Once you have chosen an exchange, you now need to gather your personal documents. Depending on the exchange, these may include pictures of a driver's license, social security number, as well as information about your employer and source of funds. The information you may need can depend on the region you live in and the laws within it. The process is largely the same as setting up a typical brokerage account.

After the exchange has ensured your identity, you may now connect a payment option. At most exchanges, you can connect your bank account directly or you can connect a debit or credit card. 

Remember to check and make sure that your bank allows deposits at your chosen exchange. 

Step Three: Place an Order

Once you have chosen an exchange and connected a payment option you can now buy Bitcoin and other cryptocurrencies. In recent years, cryptocurrency exchanges have slowly become more mainstream. An industry that was once thought of as a scam or one with questionable practices is slowly morphing into a legitimate one that has drawn interest from all the big players in the financial services industry.

Step Four: Safe Storage

Having your crypto outside of the exchange and in your personal wallet ensures that only you have control over the private key to your funds. It also gives you the ability to store funds away from an exchange and avoid the risk of your exchange getting hacked and losing your funds.

Bitcoin and cryptocurrency wallets are a place to store digital assets more securely.  

When it comes to choosing a Bitcoin wallet, you have a numerous options in front of you. The first thing that you will need to understand about crypto wallets is the concept of hot wallets (online wallets) and cold wallets (paper or hardware wallets).

1. Hot Wallets:

Online wallets are also known as “hot” wallets. Hot wallets are wallets that run on internet-connected devices like computers, phones, or tablets. This can create vulnerability because these wallets generate the private keys to your coins on these internet-connected devices. While a hot wallet can be very convenient in the way you are able to access and make transactions with your assets quickly, storing your private key on an internet-connected device makes it more likely to get hacked.

Strong passwords, two-factor authentication, and safe internet browsing should be considered minimum precautions to be taken.

Remember the user of this wallet type is not the holder of the private key to the cryptocurrency that is held in this wallet. If an event were to occur where the exchange is hacked or your account becomes compromised, your funds would be lost.

2. Cold Wallets:

The simplest description of a cold wallet is a wallet that is not connected to the internet and therefore stands at a far lesser risk of being compromised. These wallets can also be referred to as offline wallets or hardware wallets. 

These wallets store a user’s private key on something that is not connected to the internet and can come with software that works in parallel so that the user can view their portfolio without putting their private key at risk. 

Cold wallets are the most secure way to store your Bitcoin or other cryptocurrencies. For the most part, however, they require a bit more knowledge to set up.

How to set up your wallet for being secure:

A good way to set up your wallets is to have three things: an exchange account to buy and sell, a hot wallet to hold small to medium holdings of crypto currencies you wish to trade or sell, and a cold hardware wallet to store larger holdings for long-term durations.

Bitcoin is Secure & Safe:

Anyone can view the history of transactions made on the blockchain, even you. But while transactions are publicly recorded on the blockchain, identifying user information is not possible. Only a user's public key appears next to transactions - making transactions confidential but not anonymous. Bitcoin currencies are more transparent and tranceable than cash.

How to Buy Bitcoin with PayPal?

It is also possible to buy Bitcoin through payment processor PayPal. There are two ways to purchase Bitcoin using PayPal. The first, and most convenient method, is to purchase cryptocurrencies using your PayPal account. The second option is to use the balance of your PayPal account to purchase cryptocurrencies from a third-party provider.

Four cryptocurrencies – Bitcoin, Ethereum, Litecoin, and Bitcoin Cash – can be purchased directly through PayPal. With the exception of Hawaii, residents of all states can either use their existing PayPal accounts or set up new ones.

To set up a crypto account with PayPal, the following pieces of information are required: Name, Physical address, Date of Birth, and Tax Identification Number.

The company also charges a transaction fee for each purchase. These fees depend on the dollar amount of purchase. For example, a flat fee of $0.50 is charged for purchases between $100 to $200.

Remember to not to purchase Bitcoins through credit cards because that may lead to many cases of fraud.

P2P Exchanges:

Unlike decentralized exchanges, which match up buyers and sellers anonymously and facilitate all aspects of the transaction, there are some peer-to-peer (P2P) exchange services that provide a more direct connection between users. Local Bitcoins is an example of such an exchange. After creating an account, users can post requests to buy or sell Bitcoin, including information about payment methods and price. Users then browse through listings of buy and sell offers, choosing those trade partners with whom they wish to transact. 

How to Sell Bitcoin?

You can sell Bitcoin at the same venues that you purchased the cryptocurrency, such as cryptocurrency exchanges and peer-to-peer platforms. Typically, the process to sell Bitcoin on these platforms is similar to the process used to purchase the cryptocurrency.

Cryptocurrency exchanges charge a percentage of the crypto sale amount as fees. For example, Coinbase charges 1.49% of the overall transaction amount as fees.

Platforms through which you can buy Crypto Currencies?

The popular Indian platforms include WazirX, Zebpay, Coinswitch Kuber and CoinDCX GO. The investors can also buy Bitcoin, Dogecoin, Ethereum and other cryptocurrencies through international trading platforms like Coinbase and Binance. Unlike stock markets, all of these platforms work 24x7.

Dogecoin

How to buy and sell Bitcoin, Dogecoin and other cryptocurrencies?

As mentioned before, the process has been made very simple. The investors can download the above-mentioned apps from Google Play Store or App Store. They just need to sign up using their credentials, complete the KYC process, transfer money to the wallet and make the purchase. The entire process should not take you more than five to ten minutes.

There is no limit on how much and what you can buy. The investors can start with as low as they want to. The purchase is completed within minutes after transferring the amount to wallet. The investors also have the option to set a pre-decided limit for selling and buying crypto.

For example, if you buy Dogecoin worth Rs 100, then your account will show the number of coins equivalent to that amount. You can sell any cryptocurrency with a tap. The amount will be first credited to the wallet you are using and will have to be transferred to the bank account later.

The crypto market is just like any other financial market. It fluctuates like stock market or money market. The volatility is more because the crypto market is relatively new. Also, it is still unregulated by anybody which means there is nobody to look after the money exchanged. So, investors need to research well before buying a crypto coin. 

Remember to consult a crypto expert or have a proper study of investing in crypto currency and even check the history of a currency before putting money in it. 

Crypto Currencies