Bitcoin is not just money, but also technology, innovation and business. Since the release of the Genesis block in 2009, the first cryptocurrency has gone from an unknown coin to a major digital asset with a capitalization of hundreds of millions of dollars. Bitcoin is a completely new form of money, and many people would like to get as much information about it as possible. There are 10 things to know before buying your first bitcoin. This will help you understand the mechanism of using the main cryptocurrency.
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No one controls Bitcoin
One of the most important characteristics of bitcoin is its complete decentralization. Bitcoin and any transactions with it are not controlled by any private company or government. All transactions are carried out in a network that is serviced by special software. You can make a transaction anywhere in the world.
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Bitcoin is not completely anonymous
Bitcoin is not a completely anonymous currency. Yes, bitcoin is not linked to Bank accounts, which means that your personal information is not available to the authorities. However, Blockchain technology is a public registry of every transaction in the system. Any user at any time can see where and to whom each bitcoin belongs. The information is anonymous: you can see that bitcoin is linked to a specific wallet, but it is not known whose it is. However, this is only true until the bitcoin is converted to money. After conversion, everything becomes more than transparent.
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Bitcoin price is subject to fluctuations
The price of bitcoins can unpredictably increase or decrease over a short period. This can be due to a huge number of factors, from the statements of politicians to the liquidity of markets. It is not recommended to store money in bitcoins. On the contrary, cryptocurrency should be considered as assets with a high degree of risk. If you still decide to store money in bitcoins, carefully monitor its rate, using several indicators at the same time.
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Bitcoins transactions are not free of charge
Each transaction with bitcoin includes a reward for miners. It may be small, but this applies only to transactions within the system. If an investor wants to cash out, they will have to pay a Commission for withdrawing assets to counter parties, such as exchanges or exchange offices. In this case, you can lose from 2 to 20% of the transaction amount. Therefore, please read the service fees carefully before transferring funds.
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Not all companies accept bitcoin payments
Despite the fact that Bitcoin has been around for more than 10 years, not all companies accept cryptocurrency for payment for goods or services. This is primarily due to the decentralized nature of the cryptocurrency, as well as the low transaction speed, relative to traditional payment systems (Visa, PayPal, etc.).
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Bitcoin is still an experimental currency
Bitcoin is a new, actively developing currency. Although financial analysts say that the popularity of cryptocurrency will grow in the long term, it is impossible to predict the future of this currency.
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Bitcoin and government regulation
Bitcoin is not an official currency. The position of the official authorities of most countries of the world regarding the legal status of cryptocurrency is ambiguous. There is no unified position on this issue, and each state chooses its own path. In some countries, cryptocurrency is legalized; somewhere it is recognized as a financial asset, commodity or means of payment. There are countries where the use of cryptocurrency is completely prohibited. The investor is fully responsible for complying with all tax, legal or regulatory requirements of the government.
Cryptocurrency trading involves certain risks. This is not just about fluctuations in the exchange rate. Decentralization and anonymity of transactions attract many scammers. In order to protect them self, investors should only make transactions with people and organizations that they know and can trust. Do not transfer bitcoins until payment for them is confirmed. Cryptocurrency transactions cannot be stopped or canceled.
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Storing bitcoins is a responsible task
Bitcoin wallets are used for transfers and payment for services. They store the digital keys required for transactions. If you lose your private key, the money will be lost forever. They can’t be returned by calling the Bank. The bitcoin system does not have a center or other regulator. Make sure that your wallet is protected in advance and save your passwords securely. Lost keys cannot be restored.
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Bitcoin has competitors
Bitcoin is the most popular, but not the only cryptocurrency. This can include Litecoin, Ethereum, Zcash and other altcoins. Most of these coins were created to serve certain operations and have different properties. Some of them directly compete with bitcoin.
