(Last Updated On: January 4, 2020)
6 Things You Should Know Before Buying a Bitcoin
Most of us are not familiar with bitcoin. Let us first talk about what the bitcoin is? Bitcoin is a is a digital asset designed to work as a medium of exchange in the worldwide. As it is digital currency it could be accessed only digitally for various purpose. The network is peer-to-peer and transactions take place between users directly through the use of cryptography, without an intermediary. All the transition are verified by the network node and it is recorded in a public distributed ledger called a blockchain.
Bitcoin was invented by an unknown person named Satoshi Nakamoto which was further released as an open-source software in 2009. In February 2015 over 100,000 merchants and vendors accepted bitcoin as payment. It increases in a wide range and in 2017 about 2.9 to 5.8 million unique users are using bitcoin.
1. Know if Bitcoin is legal in your country
As it is known that bitcoin has no any central governing authority so some government does give approval to the use of bitcoin. So before using it, we should confirm if it is supported by your country and if not then we should do any illegal activities. The more people start using Bitcoins, more the fiat currency gets devalued. This is the reason why some government does not support the use of Bitcoins.
Top 10 bitcoin-friendly countries are Estonia, The United States, Denmark, Sweden, South Korea, The Netherlands, Finland, Canada, UK, Australia.
2. Bitcoin isn’t Anonymous
Many of us are thinking that bitcoin is unknown but the truth is that whole detailed address of the transmission is visible publically in the world. Any transition we made, are visible at the Blockchain website with your public address and account balance. So there is no privacy in the transition.
The website keeps the public address as an identifier. It shouldn’t take much effort to trace the name linked to that public address.
3. Make sure the Bitcoin is Acceptable Currency
Before buying the bitcoins you must investigate whether the bitcoin currency is accepted or not if it is not accepted it will be worthless. Some of the great companies that accept bitcoins are Microsoft, Dell, WordPress, PayPal and many more. They use bitcoin for making any purchases or transactions.
If you are confused where to start then you should look to the CoinMap. It lists a crowd-sourced data of the local business places that accept Bitcoin all over the world that accepts bitcoins.
4. Bitcoin Transaction cannot be undone
Whenever you are making your transition using bitcoins you must keep in mind that its transition cannot be canceled. We only can verify our details twice before while buying any of the things online or making any sort of transactions. In case of the wrong transition, you can try to ask him/her for a return which may or may not work depending on the situation.
5. Security value
Before buying bitcoins you must know about its security. In case if you lose your bitcoins from bitcoin wallet there is no governing security to deal with it. There is no chance to get your bitcoin back. They are gone forever.
You should use a reputed mobile wallet service like CoinBase. Make sure to backup your wallet in case something goes wrong with your mobile device. An even better alternative could be to use a hardware wallet, which stores your private keys on a dedicated secure hardware device. Some of the hardware wallets are Ledger and TREZOR
6. Extremely Risky Currency
There is high risk in using bitcoin as it changes randomly and fluctuates widely at the time. Not only that, no one could say how much you would be looking for all your money if there is any sudden drop in the value of the Bitcoins. This makes the bitcoins meaningless for the regular user.
So now you have got about all those things that should be known before you could go for buying a Bitcoin and hopefully you might have well understood the whole system behind this different kind of payment system.