With all eyes on the cryptocurrency space, more and more people are starting to consider making an investment. Despite the 10+ years since Bitcoin (BTC) was first introduced, what we’ve learned is that it still gets scary at times. Understandably, this makes things a little rough for newcomers.
Fortunately, a few lessons have been learned that can help beginners get started. The thing is, when people think of how to make money with Bitcoin, they think it’s all about when you buy. It’s not just about the timing—it’s about what you know before you even start investing.
Why people buy Bitcoin
Before we get to what you should do before buying Bitcoin, let’s first talk about why people have been spending so much money on it. The thing is, while most people believe that all Bitcoin is good for is as an investment tool, there are already more than a few ways that people can utilize them to their advantage. Let’s take a look at a few of them.
Considering that Bitcoin is a decentralized currency, this makes it a perfect option for people looking to transfer money overseas. That’s thanks to the fact that there are no regulatory bodies, meaning you can send money with fewer fees to worry about. Plus, you can transfer anytime, regardless of any holidays or work hours. Compared to traditional remittance options, this gives Bitcoin a big advantage.
Similarly, when we travel, converting money can often become a hassle. There are more than a few reasons for this, one of them being the fact that we often have to work with banks or other traditional money exchange services. Additionally, exchange rates can often lead us to worry about the value of our currency. Using Bitcoin as a traveling currency can help avoid a lot of these issues thanks to the fewer fees and exchange rates.
Again, since this is decentralized money, we can transfer and convert our Bitcoin on the fly, securely and efficiently, any time we want. Alternatively, countries like El Salvador have already adopted Bitcoin as legal tender which means you don’t even have to convert your cryptocurrency if you’re planning a visit.
Given everything we’ve seen happen to the traditional banking system, it’s not surprising that a lot of the younger generation are choosing to keep their money online. This makes sense especially when you consider how much Bitcoin’s value has climbed since it first came out.
What to do before getting started
It’s all about doing your homework first and taking the time to learn as much as you can about the world of cryptocurrencies. It helps more than you realize, especially if you can appreciate just how much things have changed.
What also helps is having a well-defined goal. This way, you can have something to work towards and help you stay away from distractions. This might seem like a small thing now but it’s important that you know why you are doing this in the first place.
What to watch out for
Of course, there are a few things that people might fall prey to—something that’s understandable but avoidable. Give yourself the advantage by making sure you keep these in mind.
FOMO, or the fear of missing out, is when people trade under the pressure of their peers buying ahead of them. This isn’t the right kind of motivation for someone about to buy cryptocurrency.
FUD or fear, uncertainty, and doubt describe the typical second-guessing we might experience when first investing, especially in something as seemingly complex as cryptocurrencies. This is why research matters— it helps keep you grounded in actual information.
What to consider
Now that you know what to avoid, it’s time to take note of some things you have to accept when you start trading cryptocurrencies. These are just a few of the accepted truths in the crypto space so it’ll do you well to take note.
It’s not easy to make predictions
Despite being around for more than 10 years, it’s still hard to make accurate predictions about its value and behavior. For this reason, people agree that cryptocurrencies are still in their infancy, which means there’s a whole lot more we can learn about them.
Trade with the right state of mind
Similar to how FOMO and FUD can get in the way of smart trades and deals, we have to be conscious of what our motivation is everytime we choose to buy or sell Bitcoin.
Are you trading inebriated, out of jealousy, or because you saw promising news? Obviously, only one of these options is logical—make sure you can catch yourself if you feel like you’re starting to be reckless.
Don’t try to work around the bubble
You might have heard people on forums talk about it. With value going up and down the way it’s been, a lot of people are calling Bitcoin out saying the bubble is about to burst. Again, it’s difficult for us to say right now.
The danger here is when traders start taking risks, hoping to pull their money out right before the bubble bursts. Remember, you aren’t the only one trading. If you thought of it, other people have most probably considered it too.
How to get started
There are more than a few different ways you can get started with Bitcoin. The easiest and most manageable would be to start by peer-to-peer trading. In our case, we’ll be using Paxful as an example since it comes with a free crypto wallet when you sign up and uses an escrow for trade security.
Create an account
To start, sign up on Paxful. It should be quick and easy to create an account but remember to verify it later on for everyone’s security. Once you do verify your account, you’ll find that you can unlock a few more perks as well.
Setting up a digital wallet
As we mentioned earlier, signing up with Paxful makes it easy for beginners to start thanks to the free crypto wallet they get when they sign up. For others trading on other platforms, a quick search should tell you which wallets are perfect for your chosen exchange.
Buy your first Bitcoin
Head on over to the home page and choose Bitcoin as the currency you want to purchase and choose how you want to pay for it. On Paxful, there are nearly 400 payment options—it’s come to a point that you can even safely purchase Bitcoin with credit cards.
Once all the details have been filled in, click Find Offers. On the subsequent offer page, take your time going through your options. Pay attention to the details like price, availability, trading limits, and seller location.
If you think an offer is worth considering, click Buy to view it in more detail. Once you’ve decided, input how much you want to buy and then click Buy now. This will open up a chat box where you can discuss the details with the seller.
Complete the transaction by paying through your agreed payment method. The seller will need to verify on their end first but once they do, the Bitcoin should be released from Paxful’s escrow and transferred to your wallet.
Trading Bitcoin doesn’t have to be difficult
The thing with cryptocurrencies is that they can seem intimidating at first. This might be why a lot of those successful with their crypto trading can seem so relaxed in confusing times—by spending hours and hours learning what they could and applying it where they can.
At the end of the day, we’re all on equal footing. As long as you have the money to invest and the time and effort to learn as much as you can, you should be able to easily find your place in the crypto space.