Bitcoin has become one of the most-talked-about phenomena in economic circles since its inception in 2009. Due to the growth in popularity and legitimacy, like many other people, you may be considering getting into it. However, it would not be prudent to dip your feet into the growing industry when not yet well informed, more so on the possible challenges you can face.
Let’s look at a few things you should know before buying your first Bitcoin:
Bitcoin Is Decentralized
The most prominent feature of Bitcoin is its decentralized nature. While specific authorities own the fiat currencies, there is no single authority that owns Bitcoin. The feature presents some advantages but also some complications too. The biggest challenge is that you are solely responsible for anything that happens with your Bitcoin. In the possible scenario, you get scammed or hacked, and you lose your Bitcoin, you have no one to correct it with or complain to, and rectify the anomaly. As such, you have to be careful before starting to buy and trade the cryptocurrency. You must be extra cautious about every single transaction.
Bitcoin’s Price Is Volatile
Most probably, you are already aware of this quality of Bitcoin. From its inception, Bitcoin has proven every day that it is a very volatile asset. You cannot be sure what Bitcoin price will be in a short moment because it changes rapidly and unpredictably, at times, in a very short time. The price is dictated by the market forces of demand and supply.
Bitcoin’s price can skyrocket, and then in a few hours, or days, dip drastically. A good case in point is the events of December in 2017. The price of this prominent cryptocurrency rose to over $19,000.However, within a week, the price had dropped to less than $12,000.
Not All Places Accept Bitcoin
You need to hear and understand this- you cannot use Bitcoin to pay everywhere. Some businesses, including leading e-commerce sites like the giant Amazon, are yet to accept Bitcoin as a form of payment. The good news is that some shops and vendors are starting to embrace the currency, but you should be aware you still have limited options. Therefore, have this understanding before putting your life savings in Bitcoin, especially if you are interested in the currency as a means of trading.