Like anything new, cryptocurrency, specifically Bitcoin, is shrouded in mystery for the majority of the population. It is a difficult thing to grasp for some, having your hard-earned wealth turned into ones and zeros, floating around on the Internet somewhere instead of being securely locked away in a safe. Terrified of being hacked, many investors steer clear of cryptocurrency, yet the fact is, there’s no safer way to store your wealth. If you are new to Bitcoin, here are a few of the common misconceptions about Bitcoin that you should be aware of.
Bitcoin is a Coin
You might see some snazzy graphics of Bitcoins in various forms, yet Bitcoin is not a coin at all, merely an entry into a public ledger, namely the blockchain. This means that as far as the entire world is concerned, you are the owner of a specified amount of Bitcoin as recorded on the blockchain, and it will remain so until a transaction occurs to change it. If you would like to get started, Bitcoin Dealers will let you buy Bitcoin in Sydney and they are there to advise you on any aspect of cryptocurrency investment.
Bitcoin is Backed by Gold Reserves
Bitcoin is a digital currency, and while it is not backed up by gold, there are a limited number of Bitcoins, which are eagerly mined by the Bitcoin community, and within a few years, there will be no more Bitcoin. Mining Bitcoin involves a bank of very powerful computers working together to try and solve complex algorithms, and should they get lucky and solve one, the new bitcoin is recognised by all the users on the network and can be circulated.
You Cannot Buy Less Than One Bitcoin
Some people are stuck on tangible commodities and assume that in order to invest in Bitcoin, one has to buy at least one. The fact is, Bitcoin can be subdivided to a very small amount – you can pay for your morning coffee in Melbourne with Bitcoin – and at more than $4,000, one Bitcoin is not small change. Most Bitcoin dealers will stipulate a minimum investment of $500, which isn’t a lot, and they will also help you set up the Bitcoin software on your device. Some dealers will accept payment by gold, cash, or precious stones, making it convenient to acquire Bitcoin.
Bitcoin Transfers are Free
While this used to be the case, there are millions of transactions going on at any given time and there are fees involved when buying or selling Bitcoin. Whatever the fee, it will be significantly less than a traditional bank transfer or credit card transaction.
Bitcoin is Only for Criminal Activity
The fact that a Bitcoin transaction can be made anonymously attracts a certain type of activity, yet law enforcement is looking at ways to monitor financial transactions. The percentage of transactions that involve illegal activity is relatively small, and this has no real impact for the investor or anyone who wishes to use Bitcoin.