The recent year has been great for Bitcoin has its recent rally has made a stir in the bitcoin market. Bitcoin is the only digital currency that provides good returns to new investors to the crypto space and wants to invest in a new asset class. Even though there are currently multiple other digital currencies getting popular in digital coins, bitcoin remains the oldest and largest cryptocurrency.
Earlier, buying and selling bitcoin was quite tedious as there weren’t any good platforms that guarantee the safety of bitcoin. Today, the scenario has changed, and hundreds of startups are emerging in the crypto space that effortlessly helps beginners invest in cryptocurrencies. Even though multiple platforms are available to buy/sell bitcoin, it is imperative to find a reliable platform to start with cryptocurrencies. Enhance your experience of trading bitcoin also know the actual role of cryptocurrency.
Let us know in brief about bitcoin and understand how to start investing in it.
What is Bitcoin?
Bitcoin is a well-renowned cryptocurrency that was launched in 2009. It is a digital currency that can be used as both a store of value and a medium of exchange. Bitcoin is decentralized in nature, which means that no government or entity can control or own the bitcoin network. No individual has control over the network and can make alterations. The users are real owners of their digital coins, and there’s no involvement of government or any organization.
Why should one invest in Bitcoin?
Bitcoin was the first and new asset class that was digitally native and fully functional, and since the inception of bitcoin, it has developed itself into a good asset class today. But why should investors focus on bitcoin? What is there in Bitcoin that makes it different from other currencies or cryptocurrencies? Let’s learn this through few points:
- A top-performing asset that provides the best returns
Bitcoin is the fastest-growing asset class among all cryptocurrencies as it holds 69% of the current market share. Although bitcoin’s market is highly volatile and its market is unpredictable, it still provides high returns. Bitcoin makes a risky investment whose price may swing up and down in hours. Still, this volatility or unpredictability is a great benefit to investors willing to take the risk to earn high returns on their investments.
By looking at the price chart of bitcoin, it can be understood why people are willing to take the risk. Bitcoin’s price started from 0, and it has risen to ₹45 lakhs in around one decade, which is the main reason why investors want to hold on to a piece of bitcoin.
- Substitute hedge against inflation
The increase in the price of goods and services that decreases the purchasing power of currency is known as inflation. Bitcoin is designed to be a deflationary asset as it has a limited supply and its mining process implements the protocol of the halving process. This acts as a hedge against inflation. Due to inflation in the economy, earlier people used to invest in gold to secure their money, but today, bitcoin has become a great substitute hedge against inflation.
Over the years, bitcoin is getting a better asset class, and due to this, the user adoption of bitcoin has increased as it protects user’s finances from inflation.
Ways to Invest in Bitcoin
There are multiple ways through which you can invest in Bitcoin that include:
Crypto exchange
Crypto exchanges are specially built platforms to allow users to buy and sell cryptocurrencies. The exchanges operate 24*7 and charge only a small amount of fee while enabling the transactions.
Bitcoin Mining
Mining is one of the best and oldest sources to earn bitcoin. Miners use special hardware systems to mine bitcoins by solving complex mathematical algorithms. In every 10 minutes, miners are required to solve a block of the transaction, and in this way, they can earn bitcoin. Bitcoin Miners are rewarded with newly mined bitcoin for mining bitcoins.
Peer-to-peer transaction
Few investors are never interested in buying or selling crypto through a platform, and in such scenarios, users can choose a peer-to-peer way to purchase bitcoin. Many platforms are developed to act as facilitators who help you chose the right seller or buyer according to your need and complete the transaction.
