Blog: Investing in Bitcoin
Are you interested in buying Bitcoin? Bitcoin is the most famous cryptocurrency in the world and people’s interest in Bitcoin has been growing steadily. Buying bitcoin is extremely easy and Bitcoin’s uses and popularity as an investment have grown exponentially in the recent years. After reading this text, you will understand the basics of Bitcoin and how bitcoins can be purchased.
What is Bitcoin?
Bitcoin is the most popular and best-known decentralized virtual currency in the world. Bitcoin uses blockchain technology where all the money transfers and Bitcoin addresses are open to the public and readable from the public ledger. Bitcoin was invented by person or group using the name Satoshi Nakamoto. The first block of Bitcoin was created on January 3, 2009. The Bitcoin blockchain has been in operation for more than a decade and today Bitcoin is the world’s oldest cryptocurrency.
The maximum number of bitcoins is 21 million. Unlike traditional currencies (e.g. dollar and euro), bitcoins are not controlled by a central bank or any single entity. New bitcoins are generated by a competitive and decentralized process called mining . Miners are currently awarded with 6.5 new bitcoins per block. Amount of new bitcoins per block gets halved roughly every 4 years (every 210,000 blocks). In the case of Bitcoin, the halving of the mining reward means that fewer new bitcoins enter the market every four years. The halving of Bitcoin is a feature, which is programmed inside the Bitcoin blockchain. The goal of halving is to prevent inflation and keep the total amount of bitcoin stable.
It is possible to transfer bitcoins anywhere in the world without third parties. In practise, this means that bitcoins typically move from one place to another very quickly and at low cost.
Bitcoin is an investment with very high volatility. This means that the rate of bitcoin can fluctuate very drastically even in the short term. Historically in the long run, the price of bitcoin has been very bullish.
Bitcoins can be stored on a cryptocurrency exchange (e.g. Northcrypto) or alternatively in a personal cryptocurrency wallet. Regardless of the storage method, bitcoins can be transferred anywhere in the world.
What determines bitcoin’s price? The answer to that question is relatively easy. The price of bitcoin is always determined by supply and demand. This means that the price of bitcoin is determined in the same way as the price of shares. In practice, this means that when the demand for bitcoins increases, the price increases, and when the demand falls, the price falls.
Investing in Bitcoin
For anyone interested in investing in Bitcoin, there are a few key things to keep in mind. Bitcoin and its purchase are different from traditional investments such as stocks. Anyone interested in investing in Bitcoin should get started by finding out what Bitcoin really is and discover technology behind it. Just like with any investment, also in the case of Bitcoin, you should never invest in something you don’t understand.
One of the most important guidelines for anyone considering investing in bitcoin is to do your own research. Never invest in bitcoin or any other cryptocurrency without further analysis. There are a lot of Bitcoin-related articles on the internet. Some of these articles may contain very wild claims. It is not advisable to make an investment decision based on a single piece of writing.
The rate of Bitcoin has typically fluctuated very drastically over time. The investor should be willing to commit to their Bitcoin investment for up to several years. Looking at the longer term, Bitcoin’s wild short-term price movements don’t come as a surprise. Of course, when starting a Bitcoin investment, the amounts to be invested should be slightly smaller.
Bitcoin allows everyone to manage their own wealth completely independently. However, freedom also comes with responsibility. Before making your first Bitcoin purchase, you should manage the necessary basic information about Bitcoin. Once you have the basic information about Bitcoin, it is time to choose the cryptocurrency marketplace that suits your needs the best.
Northcrypto is a safe and easy-to-use cryptocurrency marketplace based in Finland. Northcrypto offers buying, selling and custody services for Bitcoin and other cryptocurrencies. We are a regulated entity registered with the Finnish Financial Supervisory Authority. Our greatest values are reliability and ease of use. Our goal is to make cryptocurrencies available to everyone by making the buying process as easy and understandable as possible.
Buying Bitcoin has never been so easy. Start investing in Bitcoin today and sign up here.Mikko Soon Cryptocurrency specialist