8 Essential Things to Know Before Getting Started with Bitcoin

8 Essential Things to Know Before Getting Started with Bitcoin

Like with any investment, you need to know what you’re getting into before you do. If you aren’t up to speed with how the investment works or what to expect, then you could end up losing money.

While Bitcoin isn’t a guaranteed money-maker, it is currently deemed the most stable of all the cryptocurrencies available. Therefore, it’s a popular investment for people to get into.

So, if you’re thinking of getting started, check out our quick guide below that covers a few things you should know before you do.

1. Securing Your Wallet

You wouldn’t leave your house with your cash in your hand or your money insecurely in your pockets. And the same can be said of a Bitcoin wallet. Your digital wallet needs to be secured just as much, if not more, as your physical wallet.

A trusted, safe, and secure wallet will let you send and receive Bitcoin, use the crypto to pay for goods and services, and prevent you from being hacked. You are in control of your crypto just as it should be.

However, despite the high security of Bitcoin, and the great levels of security of wallets, you still have to play your part. You need to do research before getting started on which wallet is best for you as well as the best long-term storage solution.

If you’re not putting into practice the right methods, then you could become a victim of hacking which is impossible to reverse

2. Bitcoin Payments Are Not Reversible

This leads us nicely on to the next point to know. Bitcoin transactions are irreversible. The only way you can ever get your crypto back once you have sent it is to have the receiver refund it to you.

This means that if you send BTC to the wrong person by mistake, the only chance you have of seeing that again is if they return it to you. While it’s possible that someone would, it’s equally possible that someone wouldn’t as well.

Furthermore, this also means that you have to be very careful when sending Bitcoin to businesses or organizations for goods and services. Ensure that they are legitimate and you can trust that you will receive what you’re paying for. Since Bitcoin is unregulated, you cannot file a complaint with your bank or a third party like you can when using fiat currency.

One particularly great aspect of using Bitcoin wallets, however, is that it will detect any spelling mistakes. You can’t send your crypto to an invalid address, but it’s still far better that you check and double-check before sending your amount.

There may be services in the future that can help with refunds or returns but again, since the appeal of Bitcoin is that it’s unregulated, this may not happen for many years, if at all.

3. The Price of Bitcoin Is Volatile

There is no such thing as a “dead cert”. Some investments are better than others. Some investments are logically sound and others that are categorically a bad idea.

However, nothing is 100%. Investing is still a risk and it must be a risk that you can afford to take. The price of Bitcoin is volatile, it can experience months of growth as well as having flash crashes. You may go to bed happy and wake up stressed.

At the end of the day, Bitcoin is relatively young, it’s still novel, and is still a fluctuating asset. You shouldn’t bank on your Bitcoin investment being your retirement plan if that plan is still fifty years away. You shouldn’t use Bitcoin as a savings account. And you definitely shouldn’t invest money you don’t have.

Bitcoin is a legitimate investment, but you must be smart with your choices.

4. Bitcoin Is Not Anonymous

It is a common error to assume that Bitcoin is anonymous. Being unregulated by a government authority is not the same as anonymity. Therefore, you will need to put in a little effort in order to protect your privacy.

According to Bitcoin’s official website, this is what they have to say in the matter of privacy and anonymity with the currency.

“All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. This is one reason why Bitcoin addresses should only be used once.”

Using Bitcoin addresses only once is the best way to constantly protect your privacy. While it may seem like too much effort, creating a new address should actually only take a couple of minutes at most, depending on the exchange platform or wallet service you’re using.

5. Unconfirmed Transactions Aren't Secure

As you may have figured out by now, security is a massive priority when it comes to Bitcoin. With storage, platforms, addresses, and transactions. Without security, Bitcoin doesn’t work in the way it’s been envisaged. So, it’s important to remember that unconfirmed transactions are not secure so proceed with caution.

6. Bitcoin Is Still Experimental

Bitcoin has only been around since 2009. That’s only 12 years and counting. In terms of an investment that was the first of its kind, this is incredibly young.

There are aspects of Bitcoin that are still in active development. As well as aspects that certain investors don’t like and are working on changing. Bitcoin is forever changing, adapting, and growing.

These are all positive things but they do sometimes come with downsides. Such as extra fees, a slower network, or issues on the server. If you encounter problems, don’t be alarmed.

Rather, know that it is likely part of Bitcoin’s growing pains. Although we recommend seeking advice from a technical expert if you have any major issues.

No one can know what the future brings with Bitcoin, especially now that El Salvador is accepting it as legal tender and other countries are talking about following suit. The future, for now, however, looks bright. Even if the brightness is still in the early stages.

For Altcoins, the same can be said but on an even greater scale. There are thousands of altcoins now available, all of them younger and less developed than Bitcoin so the same rules apply.

7. Government Taxes and Regulations

As you’ll already know, Bitcoin isn’t an official currency anywhere in the world. You don’t receive Bitcoin like you do your salary and you can physically hand it over to anyone. However, you’ll still be subject to your countries’ taxes and regulations. The vast majority of countries tax people based on their financial assets.

For example, you can’t cash out your Bitcoin and not be prepared for your government to not want a slice. You’ll need to investigate your country's laws and regulations when it comes to paying tax on profit via Bitcoin.

It’s certainly not worth trying to do anything secretly, and the money will eventually have to end up in your bank account so there’s no hiding from it.

8. Cashing Out Your Bitcoin

There are several ways that you can cash out your Bitcoin if you ever need to. Often, people cash out because they have an emergency they need to pay for or a milestone that they are wanting to achieve.

While there can sometimes be negativity surrounding cashing out, you mustn’t let this thinking influence you. If you want to cash out, you have every right to.

Check out our Cashing Out Guide so you’ll know which option is right for you.

Get Started with Mining Syndicate

If you would like any more information about starting or expanding your Bitcoin horizon; reach out to us at Mining Syndicate. Our mission is simple: Strengthen the Bitcoin network by enabling small-scale miners to affordably purchase and reliably host miners.

As a small miner, Chris became frustrated by the lack of hosting options available for miners with under 100 units. As luck would have it, he found a 2.5MW mining facility for sale right down the road, and thus, Mining Syndicate was born. Facilities #2 and #3 are already in the works.

Why is Mining Syndicate so successful? Because we have a team of people who are just like you, eager to be a part of the future of mining. If you would like more information about how you can be a part of Mining Syndicate, how our facility works, or the products we sell, you can reach out to us here.

You can also check out our Best Seller List as well as our whole catalog of miners. We have miners for all budgets. We look forward to hearing from you - together we are stronger.