Bamboozled By Bitcoin? A Guide For The Crypto Clueless

Bamboozled By Bitcoin? A Guide For The Crypto Clueless

Unless you’ve been living under a rock for the last few years, we’re almost sure that you would have heard about the crypto’ craze taking over the world right now. Whether you actively trade in crypto’ or have only heard about the alternate currency in fragments, it’s a trending financial topic that is likely to be present for a long time. Although the future of these alternate currencies is undecided, we’re seeing a rise in the number of people investing in them, with individuals aged between eighteen and twenty-nine paving the way with a remarkable 29% of this age group owning a form of cryptocurrency

Dabbling in digital currency has proven to boast tremendous benefits for those who know what they’re doing, but nothing comes without risks. It poses whether crypto; is suitable for all age groups or if specific demographics are better off being more cautious with their savings. Understandably, like many trends, it’s easy to be confused about emerging crazes, which is why we’ve created this guide for those bamboozled by Bitcoin to assist the crypto’ clueless and help you gain a better understanding of the digital coins. 

What Is Bitcoin? 

First and foremost, before you can decide whether you’d like to dabble in digital coins, it’s essential to know what it is that you could potentially be investing in. In simple terms, Bitcoin is one of many digital currencies, with some of the most popular being Ethereum, Litecoin, Cardano, Dogecoin, and Bitcoin itself. You can use the pre-paid credits to purchase items in real life, just like you would with a credit card, but it’s not based on debt. Buyers can use digital coins to send money anywhere in the world, even to someone they don’t know, without third-party authentication. 

Bitcoin is an entirely virtual payment method; it eliminates the intermediary, also known as the bank, making it a desirable alternative payment method for individuals seeking anonymity. Those who use it can choose to divulge as little or as much information as they want. Plus, it’s particularly beneficial for those wary of a customer privacy breach and its implications. 

Where Can You Buy Bitcoin? 

Bitcoin and other alternative currencies are available to purchase through popular venues such as cryptocurrency exchanges, brokerages, peer-to-peer exchanges, and even payment providers such as PayPal. 

Although before you can buy Bitcoin with credit cards, you’ll first need to have a cryptocurrency exchange account, an internet connection, and identification documents depending on which platform you plan on using. Payment methods can also differ depending on the provider; for instance, leading Bitcoin marketplaces such as Paxful offer users over three hundred payment methods to choose from. 

What If You’re Not Planning To Spend Your Bitcoins? 

Just because you’re planning to invest in Bitcoin or another digital currency doesn’t mean that you simultaneously have to start making plans on how to spend it. Much like other popular types of investments, crypto enthusiasts have various strategies to buy or hold Bitcoin and other forms of cryptocurrency. 

In 2013 the popular term ‘HODL’ was created, which was originally a misspelling of the word ‘hold’ and has become an acronym for ‘hold on for dear life in the crypto community. Generally, ‘HODL’ has become a strategy for crypto investors who have a long-term investment approach to Bitcoin or other digital currencies and is usually the recommended approach for budding crypto enthusiasts. Investing in cryptocurrency is akin to gambling, and much like the latter, crypto is a high-risk business, and more traders lose than not, which is why novice traders are steered towards the ‘HODL’ tactic to minimize any trading mistakes and their losses as a result. 

For some investor’s ‘HODL’ represents more than just a strategy for buying and holding Bitcoin or other cryptocurrencies. Some long-term investors buy and hold onto their cryptocurrencies because they believe that they will eventually replace fiat money, which would essentially make the exchange rates between the two currencies redundant for crypto investors. Therefore, crypto investors often feel that dabbling with digital coins will protect the value of their money and use their investments as an insurance policy for their finances. 

What Can I Buy With Bitcoin? 

Due to the rapidly growing popularity of Bitcoin and other cryptocurrencies, it’s not surprising that many household name brands have adopted cryptocurrencies as an alternate payment method. Nowadays, you can use your digital coins to pay for just about anything from food and drink to clothing and accessories. 

Not to mention your spending isn’t just limited to physical goods; you can also use Bitcoin and other cryptocurrencies to purchase virtual goods from digital service platforms and entertainment brands such as Microsoft. You’ll find that some of the most popular, well-renown companies accept cryptocurrency as a form of payment from Lush to Amazon and Etsy. 

Written by Mia

Hey Everyone! This is Mia Shannon from Taxes. I'm 28 years old a professional blogger and writer. I've been blogging and writing for 10 years. Here I talk about various topics such as Fashion, Beauty, Health & Fitness, Lifestyle, and Home Hacks, etc. Read my latest stories.

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