How to Trade Bitcoin.
Bitcoin demand is on the rise with highs reaching $5,000 this year before settling around $4,500 at the time of this post. However, newer concepts, especially in economics, are usually hard to grasp, and it certainly doesn’t help the fact that they’re usually explained by experts for experts, thus leaving a large part of the population wondering how to board the Bitcoin bandwagon.
So allow us to illustrate how to get yourself into the Bitcoin game.
The main concern people have with Bitcoin is how to get some. They don’t mind the background of it, how it functions, what purpose does it have, who created it, none of that. Some people just want to be able to acquire some and be able to trade with them to reap the profits to be had in this industry.
This article is for you, who just wants to grab some Bitcoin. Mainly, how to trade with it.
Why are we limiting this information to just trading?
Because mining, the other form of acquiring Bitcoin, is too expensive and time-consuming to be profitable unless you have the money and time to spend on it. That is because Bitcoin mining is, by nature, bound to get harder with time, making current equipment obsolete very quickly (Some “altcoin” mining can be still be done by the hobbyist but that is a whole other topic).
Therefore, for Bitcoin mining, you must continually be on the lookout for new computers hitting the market and also have the money to acquire them before most people do, since mining is a very competitive field and you must always ensure you have the edge over every other miner.
So this leaves us with the most profitable way: Trading.
Trading is just buying Bitcoin with fiat currency or selling products and services in exchange for BTC.
Trading is quite simple: You just need to find an exchange like Coinbase, Kraken, localbitcon and many others.
Once you’re registered, you need to affiliate a bank account or credit card (depending on the exchange and your location) and then set up price limits and daily (or weekly, or monthly) coin limit, so you don’t go overboard buying them. Then the exchange will look for offers that match the amount you’re willing to pay and let you contact the seller, or perform the transaction automatically.
This pretty much sums up trading, and selling goes the same way, just in reverse.
However, we also need to learn about where to store these coins. Enter digital wallets.
Digital wallets are apps or pieces of hardware that let store your coins in them, acting as bank accounts. They contain an address which is the one you must give people to receive Bitcoins or to withdraw the tokens from your exchange account and into your more private, and safer, personal wallet.
There are many free software wallets on the market right now such as BreadWallet, Mycelium, Copay and many others. Software wallets are fine for small amounts and daily spending but a hardware wallet is recommended for larger amounts. Think of a software wallet like the billfold/wallet/purse that you may carry small amounts of cash in for daily spending and a hardware wallet like a bank savings account for larger sums of cash. The security of a hardware wallet is more protected than a software wallet and a bank account for that matter. Take a look at the recent events with Wells Fargo, Chase/JP Morgan and Equifax and understand that you must have an active role in the protection of your finances and personal information.
Interested in learning more about trading and storing digital currency? Leave us a comment or send an email with any questions.