Have you ever wondered about how to invest money you have lying around? Or maybe you’re up for being part of a new frontier? Forget traditional stocks and shares. It is time to start investing in bitcoin, a revolutionary type of currency that is entirely virtual.
Here is how to buy bitcoin in the UK and the lowdown on what it’s all about.
What Is Bitcoin?
The most revolutionary aspect of bitcoin is the fact that it is a digital currency that is not owned by one bank or country.
The biggest problem with this is bitcoin has become the currency of choice for hardened criminals trying to launder money. This has somewhat wrecked its reputation with governments, banks and retailers who are not keen to accept it.
Consequently, theft is a major concern. Bitcoin is not protected by the same regulations that cover you if a hacker stole your money from an ordinary bank account. Banks are also registered with the Financial Conduct Authority (FCA); digital currency is not. The UK government recently asked the public how they thought cryptocurrency should be regulated.
Despite this, according to the University of Cambridge, it is estimated that around 2-5 million people use digital or cryptocurrency. Bitcoin is by far the largest of these.
The Politics of Bitcoin
Supporters say Bitcoin is truly democratic and decisions about its price and value occur naturally in the market. They are not influenced by politicians or bankers.
Owning Bitcoin can, therefore, be seen as a political act. The very first physical Bitcoin was engraved with a quote from The Times Newspaper of the day it was minted: ‘The Times 03/Jan/2009 Chancellor on the brink of the second bailout for banks’.
Various famous users of Bitcoin have also issued a declaration of monetary independence. They claim that the fact it has no central control systems is an important first step in undermining the capitalist system.
Others claim bitcoin represents a true free market in economics. The value of the currency is entirely dependent on market forces.
Volatility
Decentralization makes the bitcoin currency extremely volatile. One bitcoin can be worth thousands of pounds.
The current exchange rate is around £2,882. Over time it has had highs of 1 bitcoin to around £14,000. It has also had lows in the hundreds of pounds. When crashes happen, they happen on a much bigger scale to ordinary currency.
One can make investing a tricky business and a high-stakes game. However, it is also a game where you can stand to make a great deal of money.
It’s, therefore, best to seek advice from an expert if you’re serious about bitcoin investment. Avoid being taken in by people hyping up the value of the currency for their gain. If you’re new to cryptocurrency, then it might be worth booking onto an online course, such as these run by Cryptoversity. Learn more here.
Remember also you don’t have to buy 1 whole bitcoin, which could be expensive, you can buy fractions of a bitcoin.
Alternatives to Buying Bitcoin
Although most people do buy their own bitcoin, if you happen to have a supercomputer lying around and the know-how, you can ‘mine’ bitcoin. This is a way of rewarding bitcoin users who solve complicated equations that help verify a bitcoin transaction was genuine.
For most people, the technical expertise and expensive computer equipment needed puts this off limits.
How to Buy Bitcoin in the UK
So just where do you buy bitcoin in the U.K? The easiest way to set yourself up with bitcoin is to open a digital wallet. They are similar to apps where you buy stocks and shares. All that is required of you is to enter a username and password and connect it to a bank account or debit or credit card.
Popular apps include Blockchain, Coinbase, and Xapo. Exodus and Mycelium are also great options.
Exchanges are different from wallets and are where you make transactions. It is advisable to use a different platform for your exchange than to your wallet so that if something goes wrong with the transaction, your entire bitcoin balance isn’t compromised. You can exchange bitcoin for other currencies.
Protect Yourself
Remember that Bitcoin transactions aren’t refundable. There is no way of claiming back money that has been stolen through hacking.
In some limited locations, there is a way of purchasing and selling Bitcoin from ATMs. There are several machines in the U.S and Canada and one in Europe. Although a safer option than trading online, they often charge high transaction fees. There are also not yet enough of them for this to be a worthwhile way of trading for most people.
Security experts recommend you use two-factor authentication. This is where you sign in on one device and receive a code to another registered device. But crucially make sure this second device is not your phone number as your phone number is all hackers need to log in and still your bitcoins.
The Joy of Cryptocurrency
Unlike the wild speculations of the past, the Tulip Mania of the 17th Century and the Railway Mania of the 19th Century, you don’t need to find a trader or send off for your shares in the post. To buy cryptocurrency in the UK, all you need is a computer or a mobile phone. You don’t need to be an expert in coding or tech.
Learning how to buy bitcoin in the UK for whatever your purpose has never been easier. The difficult part comes in keeping your bitcoins safe and secure.
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