Marketspaace’s Guide to Buying and Using Bitcoin Online
The recent hype around dog coin in mainstream media and skyrocketing bitcoin prices has completely convinced people that bitcoin is the future of finance. Due to the decentralized nature of bitcoin, it is gaining widespread adoption across the world.
Skyrocketing bitcoin prices tempted many peoples to use it as a hedge against economic disruptions like we used Gold in the past. What sets it apart from fiat currency is that bitcoin cannot be created out of thin air; therefore, we can rest assured that we don’t have an inflationary asset by holding it.
However, before we Marketspaace.com step in, we should consider the risks of buying and using bitcoin online. In this article, we’ll walk you through some marketspace guide to buying and using bitcoin online. If you are desperate to enter into the bitcoin marketplace, then these guides will certainly help you.
This Marketspaace’s guide on buying and using bitcoin online will also help you if you are an experienced bitcoin trader. You might be a person who is curious about bitcoin and perceive it as a quick-rich scheme. If this is the case, I strongly recommend you spare some time to read this article thoroughly.
Marketspaace’s Guide to Buying and Using Bitcoin Online
1. Invest Wisely
This guide applies to almost all investment instruments, whether equities, bonds, ETFs, commodities, or cryptocurrencies. Create your investment strategy and allocate a fraction of your investment for cryptocurrency.
Since bitcoin is a highly volatile market, therefore, no one can guarantee you a fixed return on your investments like a fixed deposit on a bank. Moreover, there is neither FDIC insurance on your bitcoin holding nor is there a buyer of last resort.
The prices of bitcoin fluctuate too often. When you see bullish sentiments dominates the market, it is likely to undergo correction. Even though bitcoin is less risky than other crypto coins since it has been there for a while, the risk always persists. As an intelligent investor, you should not let market sentiments dictate buying or selling decision.
2. Do In-Depth Research
Before you decide to invest even a small amount of money in bitcoin, we strongly recommend you spend ample time doing research. Try to grasp an underlying technology behind bitcoin fully and from where it derives its value. If you are buying a bitcoin with a mere perception that someone will buy it from you at a higher price, then it means you are speculating, not investing.
Since speculators are more susceptible to all financial fraud, you’ll likely lose your money if you don’t heed our recommendation. Fortunately, learning resources are abundant on the internet that can help you widen your understanding of this topic.
Try to watch all the YouTube videos on this topic, and don’t forget to search for quality study material on the internet. Furthermore, get some books from the library so you can educate yourselves about blockchain, cryptography, consensus algorithm, game theory, and many more. I bet you are unlikely to fall prey to any market manipulation with a firm understanding of these topics.
Try shop using bitcoin in Marketspaace.com and you will know how easy, it will be like bitcoin for amazon or ebay.
Eventually, you end up making some wise investment decisions. If you live in an area where there is no longer covid lockdown, we suggest you attend some meetups. Ask a couple of questions to your peers, and if you don’t understand what they are saying, never hesitate or be shy to ask them to explain again.
In these meetups, you’ll experience that only a sincere one will explain the complete cryptocurrency ecosystem to you. However, a vast majority of them only ask you to buy the crypto coin they own so that the prices will go up. Once you’ve done adequate research, don’t just start investing with all your savings. Start with very little money and spend some time to understand market dynamics.
3. Don’t Let Your Fear Stop You.
In Marketspaace.com, we understand user’s fear of missing out is the leading reason stopping many retail investors from entering the bitcoin marketplace. With the fear of missing everything, you are likely to destroy the wealth that you’ve accumulated over the years.
Speculating on a fluctuating bitcoin market is a risky business. Thus, we can say that the fear of missing out can be minimized with proper research and a wisely designed investment strategy.
4. If Something Sounds Good, It Probably Is
If something is luring you into exploring it, probably because of its unprecedented growth, then it must have something that is arising your curiosity. Many people claim that their crypto coin will outpace bitcoin, but time will tell the reality.
Both the buyer and borrower should be extra cautious while dealing with cryptocurrency. For instance, some crypto exchanges offer 100X leverage that means you are eligible to borrow up to 99% of the actual amount that you’ve initially deposited. In this situation, if a coin price soars, your profit will escalate in the foreseeable future. But if coin prices plummet dramatically, you could completely be wiped out.
5. Don’t Blindly Trust on Anything.
Just like any other industry, there is an abundance of scammers here. There are many instances of malpractices in the past. For instance, in the recent past, a consortium of scammers exploited Elon Musk statement in the media to defraud people of $100,000 worth of various crypto coins with fictitious giveaways. By impersonating themselves as a regular comedy show, these nefarious actors managed to persuade their victims to send a small amount of crypto to verify their email addresses. To convince their victims, these miscreants promise to return ten times the amount sent to them.
6. Emphasize the Security of Your Key
Just like all the bearer assets, crypto coins holders are supposed to be the rightful owner. Once you lost the key, you are longer the owner of the crypto coin. You can buy buy bitcoin ebay without any kyc approval, but still there is lot of risks.
That is why seasoned crypto traders strongly recommend you never rely on a third-party digital currency wallet and give them your secret cryptographic key. Since all the third-party crypto wallets or exchanges are highly unregulated and are always prone to hacking, it is unviable to entrust your private key to them.
Decentralized finance (Defi) has become a victim of numerous malware attacks over the past few months, and centralized exchange platforms like Binance was also affected due to these attacks. Using a hardware device or writing your secret key comprises strings and numbers on a piece of paper can be a nerve-racking business. That’s why many crypto experts prefer using third-party custodians.
7. Consider Buying Bitcoin in a Small Faction
As a novice crypto investor, you don’t necessarily have to buy a whole bitcoin. You can even buy a fraction of bitcoin. Bitcoin can be divisible up to eight decimal. Simply speaking, you can purchase up to $10 worth of bitcoin.
It is a perfect idea to buy bitcoin in a small faction so you can get exposure to this asset. Buying bitcoin in a small faction is also great for those who want to invest in bitcoin but are running on a very tight budget.
8. Understand Tax Implications
This suggestion is insanely important for people living in a country where the tax regulations are very strict. For instance, if you live in the US, you must know that Internal Revenue Services (IRS) categorize cryptocurrency as property, not currency, for tax purposes.
To better grasp this fact, let’s take real-life examples. Let’s say you buy a bitcoin for $10, and its value quadrupled in a couple of months. If you purchase something from that extra amount, you are liable to report that capital gain and pay tax on it.
Furthermore, all the centralized exchanges regularly update IRS. Even though crypto isn’t as regulated as bonds or equities, the government is facing an all-time high budget deficit, so it won’t hesitate to bring crypto trading under the tax net.
9. Buy Using Dollar Cost Averaging
Have some fun with your friends and family members, go on a beach, and enjoy your vacation. You can do all this stuff while investing in crypto.
As we’ve already discussed, the crypto market oscillates frequently. So, to book a decent profit with bitcoin, you need to work with a long-term trading strategy. If you enter into the crypto market to experience a dopamine hit, unfortunately, it is not the right place for that.
The best and tested way to invest in bitcoin is dollar-cost averaging (DCA). First, decide how many crypto coins you can afford to buy at regular intervals (weekly, monthly, yearly). After buying bitcoin, don’t look at that time and again.
10. Stay Away from Unit Bias
If any crypto coin is traded at $1, then it doesn’t mean you should prefer it over bitcoin. All coins aren’t equal in any sense.
There are many crypto coins, some of which are designed to emulate bitcoin and some of which attempt to solve shortcomings in bitcoin. Almost all the coins have an utterly different underlying working principle and employ different consensus algorithms.