Saving money is only the first step to becoming financially independent. It is good to save money, but if you let it sit in the bank, it’s not going to bring you any additional revenue, as interest rates are extremely low and even negative in most cases. This is why you have to think about investing in something in order to secure your savings on long term.
One of the most trendy ideas today is to purchase bitcoin. This virtual currency has some advantages that could make it very enticing for investors. On the other hand, nobody knows how it is going to evolve, so betting on it can be quite risky. If you think about investing some of your savings into it, you should inform yourself very well about its advantages and drawbacks.
Bitcoin is very new, but at a first glance it’s going to revolutionize the way we think about money. It doesn’t depend on any central bank, thus being independent from foreign exchange currencies fluctuations. Additionally, it isn’t subject to inflation, because there’s only going to be a limited amount of bitcoin in circulation ever. When this number is going to be reached, the value of bitcoin can only go up. This is what happens with things that are limited in number. The more the demand is going to increase, in the conditions of a constant offering, the price is going to go up. This makes bitcoin an excellent investment on long term.
Those who think about buying bitcoin for using it to pay for various goods and services may need to wait a little longer until merchants are going to accept this form of payment. For now, there are already many shops and online businesses that accept bitcoin, but most merchants are still reluctant when it comes to a virtual and volatile currency like this. Besides, transactions can’t be reversed, so it isn’t possible to cancel a purchase and get your money back into your wallet.
There’s another thing you should know if you want to buy bitcoin: you need to have a wallet, which is similar to a back account, but a little more volatile. You can choose to have it installed on a mobile device or a computer of your choice or to have it hosted online, on a certain website. The biggest problem with installed apps is that once you’ve lost your data or your phone, you won’t be able to retrieve your bitcoin, so everything you have is going to be lost for good. This is why you need to always have some backups and store them on a different device, just in case you need them to restore your wallet.
As a conclusion, investing in bitcoin can be a good idea. However, you should be careful not to put all your eggs in the same basket, so try to diversify your portfolio of investments. This is how you can spread the risk of losing all your money over night.