We’ve all had critics in our lives—the naysayers who tell us that we can’t do something. Bitcoin (BTC) enthusiasts are no exception. Crypto investors have come under scrutiny for their beliefs, and in particular, they’ve dealt with the FU
Dsters. But, before we go into detail about FUD, let’s start from the beginning. What is Bitcoin, and is it safe to buy? We’ll break down what you need to know if someone ever asks the question: “Why Bitcoin?”
What is Bitcoin?
Bitcoin is a digitized currency used for buying items and services. However, unlike a fiat currency, Bitcoin uses an online ledger to securely confirm transactions. On top of that, the online ledger involves blockchain technology used to send transactional data into cyberspace.
The history of Bitcoin is a little different than the birth of most currencies. It was created around 2008 or 2009 (there is some disagreement around when it was first started). The creator of Bitcoin, who went under the alias Satoshi Nakamoto, wanted to create Bitcoin to give the world a form of decentralized currency that everyone could use. This is what makes Bitcoin and other cryptos an exciting addition to financial systems.
What makes Bitcoin special?
What makes Bitcoin and other cryptocurrencies unique is that they don’t involve a centralized middleman, like banks or government entities. That’s why people will often associate the word “decentralized” with Bitcoin. Since no centralized person is printing Bitcoin, it doesn’t have to follow standard guidelines. In fact, Bitcoin is created through a complex mining process. Miners will solve intricate algorithms of encrypted code. The encrypted code is typically strings of numbers and letters that make up an equation. These miners need to solve the equation to “unlock” the Bitcoin. It’s important to say that these miners can be your everyday Bitcoin enthusiast, and unlike with fiats, they typically don’t require approval from the government to mine. That’s what makes this cryptocurrency so unique—it’s truly for the people.
It’s important to note that Bitcoin has a supply cap of 21 million BTC. Because of this finite supply, Bitcoin is also not susceptible to overinflation.
Is Bitcoin safe to buy?
Despite being a unique form of currency, there’s one thing that many people want to know: is Bitcoin safe to purchase? The answer to this question is dependent on your opinion. However, it’s critical to think about a few things before making a decision.
- Risk: Bitcoin is considered to be a volatile currency. Ask yourself, are you willing to take a chance that may payout in the long term? Are you buying into Bitcoin because you have FOMO (fear of missing out)? It’s essential to be honest about why you want to buy Bitcoin—you’ll need to ask yourself if you’re willing to take on the risk that comes with it.
- Knowledge: Because Bitcoin is a novel form of currency, you’ll need to do your research. Before investing in Bitcoin, ask yourself: how much do I know about this currency? Do I understand it? And again, do I understand the risks of Bitcoin?
- Diversity: It’s also important to think about how much you’re planning to invest. Are you trying to go “all in”? Or are you trying to diversify your investment portfolio? After all, Bitcoin could be a longer-term investment since it’s more unpredictable. Ask yourself how much you’re planning to spend on Bitcoin in the short-term and long-term, and ask yourself what percentage of your total investments will go towards this cryptocurrency.
- Affordability: As always, when making any investment, ask yourself: “can I afford this?” This is key since the price of Bitcoin is fluctuating at this time. You could lose some of your investment. If you’re able to take that risk, then Bitcoin could be right for you.
However, don’t let the risk deter you from investing. All Bitcoiners should do their due diligence before jumping in. This includes doing your research on FUD and the dreaded FUDsters.
What is FUD, and how can I avoid it?
FUD is an acronym that stands for fear, uncertainty, and doubt. It’s a method non-crypto enthusiasts use to influence society’s impressions of Bitcoin and cryptocurrencies. Sometimes FUDsters (those who spread FUD) will even circulate fake information about Bitcoin. Whether they do this on purpose or not, beware of any false information and news about cryptocurrencies. As mentioned previously, anyone investing in Bitcoin should always do their research. This will clear up any misconceptions that come with FUD.
On the other hand, it’s also important to say that some crypto enthusiasts will call anyone who doesn’t believe in Bitcoin a FUDster. So be skeptical but also be open to different ideas. It takes balance and research to avoid FUD, but you also can’t be blindly enamored by crypto.
Tips for buying Bitcoin
Now that we’ve broken down what Bitcoin is, what makes it unique, and a few other items, let’s go into some tips for buying Bitcoin. While this list is not exhaustive of every best buying practice, it should help you get started on the right foot. Keep this list on hand when buying crypto, and you should be good to go!
- Research, research, research: We’ve said it before, and we’ll say it again. Research is imperative to buying crypto.
- Read the reviews: If you’re trading on a peer-to-peer platform, like Paxful, be sure to read a vendor’s profile and any reviews they have. Reputation is important on trading platforms, and having a reputable trader will make the buying process a lot smoother.
- Review all terms: Before accepting any offers for buying or even selling Bitcoin, make sure to read the offer terms and conditions of the trader or the platform. Again, it comes down to being diligent.
- Check the pricing: Along with researching the terms, the trader, and the cryptocurrency, check the pricing given to you. This includes fees and any additional pricing that may be part of the Bitcoin price.
That’s it—you now know the basics of buying Bitcoin. Be sure to ask your peers their thoughts on the crypto, and if you have any best practices for avoiding FUD, let us or your friends know. Best of luck with your future purchases!
*The content of this article is for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice.
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