Bitcoin is tempting—but do your homeworkby Ruth Jackson / February 19, 2018 / Leave a comment
Cryptocurrency was one of the biggest news stories of 2017, with investors clamouring to get in on the storming price gains. The price of a single Bitcoin rocketed from just under $1,000 at the start of last year to close to $20,000 in December. It has since dropped back to around half that level.
Bitcoin isn’t the only cryptocurrency out there, but it is possibly the easiest one to trade at the moment. However, Bitcoin’s value in real currency terms is incredibly volatile. A price chart for Bitcoin over the past 60 days looks like a mountain range.
If you are tempted to start trading cryptocurrency the good news is you don’t have to buy a complete coin, you can purchase a fraction of a coin—so you don’t need spare thousands to get started.
You also don’t have to buy Bitcoin. If you are computer savvy—and have a very powerful computer—you could mine the cryptocurrency instead. Mining involves solving complex mathematical equations, the cryptographic codes that keep the Bitcoin network running.
For every equation solved, a block of Bitcoin is processed and the miner gets a new allocation of the cryptocurrency. However, not only is this a complex process, you will also be up against other miners competing to solve these equations to claim their Bitcoin.
The more realistic option for most of us is to get exposure to cryptocurrencies by buying them. There are a number available including Bitcoin, Ripple, Iota, and Litecoin. The most well-known is Bitcoin.
The first step on a rather long road to trading in cryptocurrencies is to set up a Bitcoin wallet. You’ll hold your Bitcoins in this and it acts as your cryptocurrency bank account. There are plenty of companies offering these wallets but be very careful which one you pick—not all of them have sufficient security to protect your valuable investments. Two of the most popular—and therefore biggest and most secure—are Blockchain.info and Coinbase.
Once you have set up your wallet you need to make sure it is secure. That’s because you’re about to buy an incredibly valuable cyber-currency that is the preferred payment method for many black-market transactions—so hackers are keen to break into wallets to steal the contents.
To protect your Bitcoins from thieves, go into the settings of your wallet and verify your email address, set a very strong password…