If you intend to trade or invest in bitcoin, you should know some key features of this digital currency. Before you embark on any significant transaction or dealings with this virtual currency, it is prudent to understand how it works. Otherwise, you might make costly errors when trading with bitcoin.
Below are some of the qualities of bitcoin you should know:
Bitcoin is volatile
Unlike the regular currency, bitcoin unpredictably fluctuates in value. Its economy is relatively young. That said, you should handle bitcoin with care as it is a risky and also rewarding asset. While storing it, ensure that you keep an amount that will not have significant financial ramifications if lost.
Bitcoin wallet need to be secured
The flexibility that comes with transacting bitcoin is impressive. Nonetheless, there are also some security concerns. If you are careless with your bitcoin wallet, there is a possibility of incurring massive losses. Therefore, it is vital to protect your virtual currency wallet, the same way you safeguard the regular wallet.
Bitcoin payments are irreversible
The chances are that you’ve probably made a mistake when making payments with regular currency. In such a case, all you had to do was follow various channels to reverse the money successfully.
Unfortunately, bitcoin transactions are irreversible. You cannot afford to make errors when paying with bitcoin. However, bitcoin systems tend to detect possible errors before they allow you to send money.
Bitcoin is in the experimental stages
During the bitcoin boom, traders made massive profits. Some are still doing so. But the one thing that you should never overlook is that bitcoin is still in its experimental stage. And as it continues to develop, it presents several pain points. These include delayed confirmations, increased fees, and so on.
Bitcoin is not government regulated
There is always a debate on the rules of bitcoin. However, that has not happened, and as it stands, bitcoin is yet to be an official currency. So long as it has value, most governments still expect you to pay tax. The responsibility to adhere to this tax and other regulations is yours. Failure to do so can cause serious legal problems.
Before you jump onto the bitcoin bandwagon, it is prudent to take note of these features. Once you have a good grasp of them, you will use this virtual currency responsibly.…
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