It seems like bitcoin is becoming more and more popular as time goes on. The issue is that many people have heard of it but don’t really understand it or know much about it. Professionals like Pine Advisors talk about how important it is to figure out some information before deciding to dabble with it. With that being the case, here are 7 things you need to know before actually getting involved with bitcoin.
Many people believe that they can be completely anonymous if they do transactions with bitcoin, but that’s actually not true. While the actual identity of the person is hidden until the transaction is complete, that actual transactions and addresses are permanently stored on the network. This means that they can be traced back to all of the people that participated in the transaction. This isn’t a bad thing if you’re using the currency legally, but doing anything illegal can get you in a lot of trouble. This is especially true for those that try and use bitcoin on the dark web thinking they are hidden.
Another thing to know is that bitcoin has very volatile prices. One of the biggest concerns that people have with bitcoin is that the prices can change very quickly. The issue here is that they don’t always change for good. The prices could end up falling by huge margins in a matter of just a few hours. With that being the case, you shouldn’t keep all your savings with bitcoin. Another way to look at it is to consider it to be a high-risk asset that could result in profit or loss. If you can’t really afford to lose the money, you should stay away from investing in bitcoin because you never know when things will change.
Every single bitcoin transaction gets a confirmation score. This score tells you how hard it is to reverse the transaction. Some are harder than others, but you’ll be able to see the odds as long as you get a confirmation score. Most times, these confirmation scores will take between a few seconds to 90 minutes. On average, though, it’ll take about 10 minutes. There are some transactions that are considered unconfirmed, but you want to stay away from these because it isn’t secure and you have zero chance of getting it reversed. In fact, you should only use these types of transactions if you personally know and trust the person.
Even though bitcoin isn’t an official currency, most places will still require you to pay things like taxes, gains taxes and sales tax them because they do have some value. Since bitcoin isn’t really governed the same as normal currency, it’s up to you to make sure you’re paying what you need to on it and that you’re following whatever rules or laws are set up through the government or your area. It might seem like it doesn’t matter since it’s not official, but you’ll want to make sure you do what needs to be done so it doesn’t come back on you and cause more issues.
You also need to remember that bitcoin is still very experimental. This means that updates are still being brought out and things are constantly changing. As the changes occur, there are going to be some hiccups or tough situations. Some of the things you might have to deal with are increased fees or slower conformation scores. If you want to continue using bitcoin, you want to make sure you’re ready for any complications that might happen and you want to make sure you can deal with them without losing everything. You never know what might come up, so be prepared for anything is essential.
Any and all transactions that happen through bitcoin are irreversible transactions. This means that it can’t be reversed. Keep in mind, though, it can be refunded. Unfortunately, getting a refund is completely up to the person that received payment. As a result, you want to make sure you’re only doing business with those you trust or those that have a good reputation. The last thing you want is to deal with shady people and end up losing a bunch of money. You also want to make sure all the information is correct before you actually send the money because any accidents can result in you being out of money with nothing in return.
There are many different kinds of bitcoin wallet options and the most important thing is to ensure that the one you choose is secure. You’ll want to go with a wallet that has fantastic security features because you don’t want your information or bitcoins stolen or hacked. The best thing to do is to get recommendations and reviews of which wallets are the best. From there, you can choose the wallet that fits your needs the best.
By taking the advice of professionals like Pine Advisors, you’ll have a much better understanding of what bitcoin is and be able to have an easier time using it. There’s a lot that goes into these things, so understanding exactly what you’re doing is crucial. If you still aren’t sure or have some more questions, you can always turn to a professional or someone who has a lot of experience with bitcoin to get more insight and tips on what to do.