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Bitcoin has risen in popularity again recently, but before investing, you should consider all pros and cons. This cryptocurrency could change the world as we know it, and if it does – now will have been a great time to invest.
Also, I want to let you guys know that I made my first bitcoin purchase back in May 2020 and I bought it on an app called Revolut which I also use to trade US stocks. I have previously mentioned that Revolut is a good app to invest in Bitcoin, however the method I share in this video is much better.
What is Bitcoin and how does it work?
Bitcoin is a digital currency. It’s not a physical currency like the USD or GBP where you can keep your money as cash. Instead bitcoin exists online in something called a blockchain.
It was created as a currency that doesn’t rely on third party banks to make online payments. With Bitcoin, all users will use the same central ledger to record every single transaction at the same time. No individual, bank, or even government can charge a fee on a transaction or even control it’s flow.
Other reasons Bitcoin can be better than banks include:
– You don’t need permission to use Bitcoin, whereas you have to apply to open a bank account
– 24/7 access
– Instant transactions (no more waiting 15 days for a payment to clear)
– No spending limits (unlike banks who control your money)
Whether you should buy into Bitcoin
Pro’s:
1. It has the potential to change the world as we know it, and if it does, now will still be considered a good time to get in on the action, even though it might feel like it’s already too late.
2. The fact that it isn’t mainstream isn’t necessarily a bad thing because it can be held as a speculative investment whilst all the regulatory issues are ironed out.
3. You can earn insane interest on Bitcoin held in certain accounts. Blockfi is one example, where you can earn anywhere from 4-8% interest.
4. There is low risk of inflation.
5. It’s probably one of the most liquid investments with immediate access.
Con’s:
1. It’s possible to lose access to your bitcoin
2. It’s a very volatile investment option
3. Bitcoin payments are irreversible
4. It’s not currently regulated and therefore has been associated with the black market
5. Still a huge gamble because it has no intrinsic value
6. Bitcoin is finite
Personally, I would like to see a Bitcoin or Cryptocurrency ETF introduced, which might be something we see later this year, but for now it doesn’t exist.
How to buy Bitcoin
Use a cryptocurrency brokerage. When you set up an account with any of these brokerages they will require all the same information as any other investment broker. The two most popular brokerages are Binance (based in Malta) and Coinbase (based in the US).
Top tip, when funding your account never use a credit or debit card because the fees will be insane.
Where to keep Bitcoin
Once you’ve bought your bitcoin on any of the exchanges, you can either leave it there or transfer it to a separate account or wallet. Leaving your Bitcoin in your brokerage account is risky, because you’re at the mercy of their security.
The other option is to transfer your bitcoin from the brokerage to a crypto wallet platform like Blockfi or Celsius. There is still an element of risk in these as well, like with any online brokerage, but the benefit is you’ll be earning interest.
You’re going to want to be extremely careful when you move your bitcoin around though because if you make a wrong move and accidentally send it to the wrong person, you’ll probably never see it ever again.
Lastly, if you really don’t trust the internet and want to keep your bitcoin on a hard drive, then you’ll need to buy a Ledger drive. This is a physical drive (like a thumb drive) where you can keep your private keys needed to authorise any of your bitcoin transactions in a hardware wallet.
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All Rights Reserved. I am not a financial professional. The things I share in this video are based on my personal experience and should be viewed as entertainment content. You are responsible for your own financial decisions. Some of the links in this description are affiliate links.
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Bret
