Bitcoin for Beginners: Investing in Cryptocurrency
Tales of tech-savvy investors becoming overnight Bitcoin millionaires have captured everyone’s attention this past year, but cryptocurrencies aren’t without risk – you’ve likely heard just as many horror stories about huge drops in value and Bitcoin-related scams.
From the complicated coin mining process to Bitcoin’s anonymous creator, the entire crypto-economy is shrouded in secrecy, so Kuflink has put together this handy guide to help you navigate your way through 2018s biggest financial trend:
What is Cryptocurrency?
Cryptocurrencies are electronic currencies that are not directly related to any bank, government or country. There are no physical coins or notes; each ‘coin’ is actually just a heavily encrypted code. The most popular form of cryptocurrency is undoubtedly Bitcoin, but you may also recognise emerging currencies such as Ripple and Ethereum.
What are the Benefits of Using Cryptocurrency?
One of the key benefits of cryptocurrencies is the fact that, as they operate independently of traditional economies, they aren’t subject to inflation, exchange rates or market manipulation in the same way as centralised currencies. Many users also favour the anonymity that cryptocurrencies offer – transactions are much harder to trace than those made by cash or credit.
What is a Bitcoin worth?
The value of a Bitcoin is volatile and varies hugely from day to day; at the time of writing, a Bitcoin is worth approximately £6,250, although ‘the price frequently moves by more than 10% within hours’. As cryptocurrencies aren’t asset-backed or centralised, their value is subject to sudden large increases or decreases. Think of the price as an agreement on what people are willing to pay for a Bitcoin rather than a predictable figure based on, for example, the price of gold.
Tips for Investing in Cryptocurrency
There are three main ways to gain Bitcoins – you can buy them, get paid in them or mine for them. Mining is a complex process which uses powerful computers to solve mathematical problems, and can take months of hard work for even the most skilled miners.
It’s wise to spend some time thoroughly researching how the system works before you invest – individuals have made huge amounts of money from trading cryptocurrencies, but the market is volatile and technically in-depth, you’ll need to make sure you understand what you’re investing in.
You’ll also need to be careful which platforms you buy from or trade via, as there have been a number of online scams targeting Bitcoin, which are almost impossible to trace once they’ve been taken.
Cryptocurrency vs Peer-to-Peer Investing
If you prefer less volatile, asset-backed investments, Kuflink offers up to 7.2% interest pa gross* on a variety of exclusive property-backed opportunities and, with over £15 million invested via the online platform to date, our investors have never lost a penny!* Sign up today in just 4 easy steps.
*Capital is at risk. Rate correct as of March 2018. You should seek independent financial advice.