People are curious to know how to purchase a Bitcoin and thus, it makes bitcoin a good investment option. Bitcoin has been a craze in recent years. The bitcoin prices are also down again. The question arises, whether the price of 1 bitcoin will rise in dollars or not? You don’t need to worry. You’re on the right path. This article will guide you through different ways how to purchase Bitcoins and discuss the pros and cons of good bitcoin investments. Also, you will know whether investing in Bitcoin is a good investment option or not.
You have probably heard of Bitcoin and the incredible growth it has seen over the last few years. In fact, if you have been paying attention to the news, you also have most likely heard of Bitcoin and how it has been skyrocketing in price. However, the true question on everyone’s mind today is whether or not Bitcoin is still a good investment for you.
What Is A Bitcoin?
Bitcoins are considered to be good investment options. But what are Bitcoins? Bitcoin is a type of cryptocurrency that is transacted online. In other words, it is a kind of digital money that works on blockchain technology. It allows peer-to-peer transactions in this digital world. Basically, you are exchanging digital money online. And, all the transactions are stored in a public ledger. Anyone can have access to it. It also works on a decentralized system. Thus, it means that no one will act as a medium between the people. Just like it happens in normal currency exchange. While transacting with another person, the bank usually acts as a middleman and earns a transaction fee on it. That’s not the case with bitcoin. No one controls the system. That’s why the transaction fee in this case goes to the miners.
The transaction fee is basically the left-out amount from the transaction. Found confusing? Let’s understand it with the help of an example. Assume there are 3000 transactions per day. So, if there are many transactions happening then the miner will decide on the basis of the transaction fee. As in, every crypto miner wants to add more and more transactions to fill their block. So how will they decide which transaction to include? Miner will look out for transactions that take up less space. The miner sees your transaction as an opportunity and tries to add your transaction to their block. Because this will give an opportunity to earn more transaction fees. If you create a bitcoin transaction that uses a 10 BTC input and only create a 0.1 BTC output, the remaining 9.9 BTC will be counted as the transaction fee. This also turns Bitcoin has a good investment option.
History Of Bitcoin
A question arises if there was already a payment system, why was Bitcoin invented? Well, there is a short story behind this. So, Bitcoin was invented by an unknown, non-identifiable person called Satoshi Nakamoto. Bitcoin was also released in the year 2008 and the original software was released in 2009. Slowly, other cryptocurrencies were also released. If we know who invented bitcoin then where is he, why hasn’t he appeared till now? There might be possible reasons for this. Maybe he feared that if Bitcoin becomes popular, he will seek the attention of the world. Another cause can be that if Bitcoin becomes popular, it might disrupt or stop the current banking system of the world. That’s why maybe he is not known to us. No one ever knows where is he or what work he did. But, he gave us an amazing digital payment system in the world.
What Is Blockchain Technology?
Blockchain basically stores all the transactions that are happening all around. It stores all the data in a public ledger. This ledger is open to all. In other words, there is no mediator acting between two people. So when the transactions are stored in blocks, they are connected to other blocks. Simultaneously, they form a chain of blocks. That’s how Blockchain technology works.
Advantages And Disadvantages Of Good Bitcoin Investment
Bitcoin has been a good investment option for investors in recent years. Investing in Bitcoin can be a good option, but you have to look out for the pros and cons of it. Here are some advantages and disadvantages listed below. Let’s check it out.
Advantages of Good Bitcoin Investment
There are many advantages of a good bitcoin investment. Here is the list:
Bitcoin is one of the most liquid assets available in the markets. This is also because it can be traded, exchanged widely across the world. You can also easily trade Bitcoin for Gold, cash, or other assets. They charge usually low fees for exchanging Bitcoin. If you’re looking for short-term profits, you can think of investing in Bitcoins. You can also use these currencies as Long term investments. This also makes Bitcoin a good investment option.
2. Lower Inflation risk
Inflation does not affect Bitcoin. Unlike foreign currencies, Bitcoin does not depend on Inflation. The blockchain system is endless, so you don’t have to worry about your cryptos losing value.
3. Creating new opportunities
Bitcoin is a new digital currency circulated in the market. These coins are also becoming famous among investors. Bitcoin is relatively new in this market. The prices of bitcoin may be unstable. It also means they can go up and down. If people are well aware of the market changes, they can also earn huge out of it. Thus, many people are finding Bitcoin as a good opportunity for investment because there is a lot of scope in this.
4. Few formalities
This is also one of the biggest advantages of a good bitcoin investment. Usually, for stocks trading, you need to hold a license to trade it. Or, you must also approach a broker if you want to trade shares of a company. But, that’s not the case with bitcoin. You don’t need to hold any license to trade bitcoins. Simply, buy and sell bitcoins on bitcoin exchanges and fill your wallet with cryptos. An amazing fact is that bitcoin transactions also take less time as compared to stocks.
Disadvantages of Good Bitcoin Investment
Just like a coin has two sides, even bitcoin has some disadvantages too. Let’s check it out.
A good bitcoin investment can also be unstable at times. The prices of Bitcoin are volatile. It means the prices of bitcoin are sometimes high, other times low. For eg, the price of 1 bitcoin in dollars as of October 31, 2021, was $60,655.85. While if we talk about today’s time as of January 31, 2022, the price of 1 bitcoin in dollars is $36,915.30. This indicates that the prices of bitcoin keep on changing continuously. Thus, if you hold bitcoins in the future, the value of your investment might also change.
2. Online hacking
Online hacking has been a serious issue in today’s world. There are a few groups of people who reported that their Bitcoins and Ethereum were stolen. One such case happened in Los Angeles. This news was reported as of January 21, 2022. Crypto.com stated that hackers have hacked the security system and stole more than $30 million in Bitcoins and Ethereum. Thus, people and also exchanges have to be more careful with the transaction process.
Stock prices of Bitcoin
Although bitcoin started in 2009, the first bitcoin trade was possible in 2010. It was first exchanged on March 17, 2010, on BitcoinMarket.com (This website is not available). In May 2010, Laszlo Hanyecz made the first real-world transaction by buying two pizzas in Jacksonville, Florida for 10,000 BTC. On July 17, 2010, the first bitcoin transaction took place of 20BTC between two parties. The total value of the transaction was $0.99. It’s interesting that the price of 1 bitcoin in dollars was $0.04951. The prices of bitcoin in dollars in the early years of 2013 to 2015, were between $102.80- $442.43. Eventually, the prices of bitcoin were unstable. Slowly, the graph of bitcoin also started rising upwards. In September 2020, the price of bitcoin was $10,779. And this phase was a push in bitcoin history. Soon after on January 2021, the price rose to $36,754.60. The current price of 1 bitcoin in dollars is 37,045.50.
What determines the price of 1 Bitcoin in dollars?
This question might have arisen in your mind, Who decides the price of a bitcoin? Who tries to regulate the prices? Well, keep reading further. Your all questions will get answered here. For example, assume you need to decide the price of a product. As per the theory of economics, you will decide on the basis of demand and supply. The equilibrium or the meeting point of both demand and supply will help you decide the price of the product. The same is with bitcoin pricing. The forces of demand and supply and many other factors detrmine the price of 1 bitcoin in dollars. Let’s check it out.
The demand for bitcoin is rising continuously. In the early years, people were not aware of Bitcoin. Therefore, the price of Bitcoin was low. Bitcoin has also become popular among countries that report high inflation like Venezuela. People use Bitcoin for making international transactions faster. Many criminals have also used bitcoin to transfer large amounts of money for illegal activities. All this has reduced the supply and increased the prices of bitcoin in recent years. Thus, bitcoin is a good investment option for investors.
The supply plays an important role in determining the price of a product. To date, there are a maximum of 21 million bitcoins in supply. It means no one can create more than 21 million bitcoins. In other words, the supply of Bitcoin is limited. Today there are more than 17 and a half million bitcoins in circulation. In the future, like after twenty, thirty years, there won’t be extra bitcoins available. So how does it affect the price? Well, assume there are 2 chocolates with you. Two people come to buy from you. You decide to sell them at $2 but suddenly 2 more people approach you. Now you have a demand of 4 people and you have a supply of 2 chocolates. You decide to raise the price from $2 to $4. Those who are capable will buy from you. That’s how supply affects the price.
Bitcoin is thought to be the most popular cryptocurrency, but there are several more cryptocurrencies in circulation that give it a run for its money. Other cryptocurrencies include Dogecoin, XRP, and Ethereum. These players keep the value of an investment in check. For example, the value of the Indian Rupee might have been different if stronger currencies such as the Yen and Pound did not exist. If you also want to know how to purchase a bitcoin, check the next section of this article.
How To Purchase A Bitcoin?
You might be thinking about how one can purchase a bitcoin as a total beginner. Well, keep reading further. You’ll find your answers here. There are many ways to buy bitcoins from the market. You can purchase them from various Crypto exchanges like Coinbase, eToro, LocalBitcoins, etc. Here are various ways how to purchase a bitcoin through the market. Let’s check it out.
Purchasing through Paypal
According to Paypal, there were a total of 377 million active users at the end of 2020. Thus, it is necessary to know the ways how to purchase a Bitcoin through Paypal. Here are the steps.
- Create a Paypal account.
- At the bottom, there will be a “Crypto” option, click on that.
- Next click on “Buy”. you will be asked to verify your identity. You have to just provide some personal information.
- After verifying your profile, they will ask you how much bitcoin you want to purchase.
- Enter the amount and they will exchange US dollars for the number of bitcoins.
- Click on “Next” and it will again ask you to confirm the transaction.
- Click “Next” again to review your purchase. PayPal has transaction fees ranging from $.50 to 1.5%.
- Paypal will ask you to make a payment using your debit/ credit card.
- Great!! you have Bitcoins in your wallet.
Purchasing through Bitcoin ATM's
You might have heard about Bank ATMs but what does Bitcoin ATM mean? How to purchase bitcoins through this ATM? Bitcoin ATMs are just like normal ATMs but the procedure varies a bit. Bitcoin ATMs are becoming a new trend in the market. There are currently 50,544 bitcoin ATMs in the U.S. It includes Growthbtm, Localcoin, etc. Here are steps on how to purchase bitcoins through Bitcoin ATM.
- First, you need to locate a Bitcoin ATM near you.
- Touch on the “Buy Coins” option. Enter your mobile number using the keypad.
- Enter the verification code you receive on your phone.
- Select which cryptocurrency you wish to buy. Click on Bitcoin.
- Find your address QR code, the machine will scan it. After scanning, insert CAD bills
- Type the amount you want to buy. It also includes a service fee.
- Once you finish the purchase, you’ll get your bitcoins in your wallet.
How To Buy On Amazon Using Bitcoin?
Do you know that you can buy things on Amazon using bitcoin? This might sound absurd but it’s true. Although Amazon hasn’t welcomed Bitcoin, there are ways through which you can buy items on Amazon. Bitcoin has been a good investment opportunity for individuals. Amazon’s business strategies are widely accepted all around the world. There are various platforms from which you can use your bitcoins to buy items on Amazon. These include Purse.io, Bitrefill, Fold, and Moon. They all use the Lightening payment method. Here is how you can earn bitcoins from Purse.io
- Visit their website.
- Search for any product or item you want to buy. Also, select the percentage of discount you want. Discount starts from 5%-33%. The lower the discount, the faster the order will be placed.
- Once you place the order, you will receive Bitcoins in exchange.
Is Bitcoin A Good Investment?
Finally, coming to the main point, Is Bitcoin a good investment? Well, It differs from person to person. Basically, for an investor, it might turn out to be a very good option, whereas a normal person who doesn’t have any knowledge about Bitcoin, might step back. As of right now, Bitcoin is only 0.4% of the world’s money and collectively, only 0.7% of cryptocurrencies are used in total. Yes, the demand for Bitcoin is rising high which indicates that in near future there might be acceptance of Bitcoin. In other words, people are eventually going cashless, so this payment option could be adopted in the future.
Another part is the supply of Bitcoin is limited but it needs to have demand in the market. And for demand to happen, it needs to be widely accepted. That’s not really happening now. Only a few countries have accepted bitcoin as a currency and allowed people to trade it. Maybe in the future, if countries agree they might accept Bitcoin which might push the demand for cryptos high.
Bitcoin is a hot topic of conversation, with some people predicting a $100k price per bitcoin in the near future. There are many positive aspects of this cryptocurrency, and there are some risks to consider. Also, there are various methods how to purchase Bitcoins mentioned in this article. The price of 1 bitcoin in terms of dollars is also witnessing huge highs and falls. Whether Bitcoin will turn out to be a good investment can only be decided in the future.