Want to Invest in Bitcoin? Here are Things You Need to Know

By Jane Muia / Published May 16, 2022 | 12:23 pm




KEY POINTS

With everything today being digitized, some investors have also relied on digital currencies. Many digital currency enthusiasts believe that these investments could produce a new batch of digital currency millionaires (or billionaires). But those who have not yet invested in the digital currency space may be wondering if there are compelling reasons to start now.


invest in Bitcoin Sprout plant and bitcoin, growth of bitcoin crypto currency concept

KEY TAKEAWAYS


Bitcoin is an experimental new currency that is in active development. Each improvement makes Bitcoin more appealing but also reveals new challenges as Bitcoin adoption grows. You might encounter increased fees, slower confirmations, or even more severe issues during these developments.


Gone are when people used to rely on and invest only in their savings for future security. In today’s world, savings may not be adequate to ensure financial safety. Idle money kept in your savings bank account may not serve the purpose. That is because of two reasons – one, the idle cash in your bank account is an opportunity loss as it cannot earn more money, and second, it does not have the potential to beat inflation.

Investing allocates money in different asset classes with the intention of capital appreciation and earning better returns in the long run. This is why you need to invest your money in the right way by giving it a chance to grow and work for you in the future. The type of investment you choose to sock your money entirely depends on you. Factors like your risk-bearing capacity, age, investment horizon and financial goals should first consider before going for an investment option.

With everything today being digitized, some investors have also relied on digital currencies. Many digital currency enthusiasts believe that these investments could produce a new batch of digital currency millionaires (or billionaires). But those who have not yet invested in the digital currency space may be wondering if there are compelling reasons to start now.

The incredible growth of bitcoin (BTC) has made some investors rely on it because they see it as uncorrelated with stocks, making it an option as a portfolio diversifier. If you are determined to socking your money in bitcoin, this is what you need to know.

  1. Bitcoin price is volatile

The price of a bitcoin can unpredictably increase or decrease over a short period of time due to its young economy, novel nature, and sometimes illiquid markets. Consequently, keeping your savings with Bitcoin is not recommended at this point. Bitcoin should be seen as a high-risk asset, and you should never store money that you cannot afford to lose with Bitcoin. If you receive payments with Bitcoin, many service providers can convert them to your local currency.

  1. Bitcoin payments are irreversible

A Bitcoin transaction cannot be reversed; it can only be refunded by the person receiving the funds. This means you should take care to do business with people and organizations you know and trust or who have an established reputation. For their part, businesses need to keep track of the payment requests they are displaying to their customers.

ALSO READ: Kenya to import maize outside EAC as flour prices surge

Bitcoin can detect typos and usually won’t let you send money to an invalid address by mistake, but it’s best to have security controls for additional safety and redundancy. Other services might exist in the future to provide more choice and protection for both businesses and consumers.

  1. Unconfirmed transactions aren’t secure

Transactions don’t start out as irreversible. Instead, they get a confirmation score that indicates how hard it is to reverse them. Each confirmation takes between a few seconds and 90 minutes, with 10 minutes being the average. If the transaction pays too low a fee or is otherwise atypical, getting the first confirmation can take longer.

  1. Government taxes and regulations

Bitcoin is not an official currency. Most jurisdictions still require you to pay income, sales, payroll, and capital gains taxes on anything that has value, including bitcoins. Your responsibility is to ensure that you adhere to tax and other legal or regulatory mandates issued by your government and/or local municipalities.

  1. Bitcoin’s Future is Unpredictable

Bitcoin is an experimental new currency that is in active development. Each improvement makes Bitcoin more appealing but also reveals new challenges as Bitcoin adoption grows. You might encounter increased fees, slower confirmations, or even more severe issues during these developments. Be prepared for problems and consult a technical expert before making any significant investments, but keep in mind that nobody can predict Bitcoin’s future.






More Articles From This Author








Trending Stories










Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE



ARCHIVES

2022
  • January 2022 (293)
  • February 2022 (329)
  • March 2022 (360)
  • April 2022 (294)
  • May 2022 (271)
  • June 2022 (232)
  • July 2022 (278)
  • August 2022 (253)
  • September 2022 (246)
  • October 2022 (196)
  • November 2022 (230)
  • December 2022 (4)
  • 2021
  • January 2021 (182)
  • February 2021 (227)
  • March 2021 (325)
  • April 2021 (259)
  • May 2021 (285)
  • June 2021 (273)
  • July 2021 (277)
  • August 2021 (232)
  • September 2021 (271)
  • October 2021 (305)
  • November 2021 (364)
  • December 2021 (249)
  • 2020
  • January 2020 (272)
  • February 2020 (310)
  • March 2020 (390)
  • April 2020 (321)
  • May 2020 (335)
  • June 2020 (327)
  • July 2020 (333)
  • August 2020 (276)
  • September 2020 (214)
  • October 2020 (233)
  • November 2020 (242)
  • December 2020 (187)
  • 2019
  • January 2019 (251)
  • February 2019 (215)
  • March 2019 (283)
  • April 2019 (254)
  • May 2019 (269)
  • June 2019 (249)
  • July 2019 (335)
  • August 2019 (293)
  • September 2019 (306)
  • October 2019 (313)
  • November 2019 (362)
  • December 2019 (318)
  • 2018
  • January 2018 (291)
  • February 2018 (213)
  • March 2018 (275)
  • April 2018 (223)
  • May 2018 (235)
  • June 2018 (176)
  • July 2018 (256)
  • August 2018 (247)
  • September 2018 (255)
  • October 2018 (282)
  • November 2018 (282)
  • December 2018 (184)
  • 2017
  • January 2017 (183)
  • February 2017 (194)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (189)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (164)
  • February 2016 (165)
  • March 2016 (189)
  • April 2016 (143)
  • May 2016 (245)
  • June 2016 (182)
  • July 2016 (271)
  • August 2016 (247)
  • September 2016 (233)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (164)
  • April 2015 (107)
  • May 2015 (116)
  • June 2015 (119)
  • July 2015 (145)
  • August 2015 (157)
  • September 2015 (186)
  • October 2015 (169)
  • November 2015 (173)
  • December 2015 (205)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950