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Although Bitcoin has been on the market for a while, its comprehension is still challenging for most investors who are used to stocks and bonds. While their similarities limit the supply and demand dynamic, risk potential, and potential for speculative prices, Bitcoin still behaves uniquely due to its massive volatility.
Bitcoin was created for people to use as a form of payment without governmental involvement, and it maintained its decentralized features successfully. It has also improved considerably over the years and is undergoing updates. If you’re wondering what is the price of Bitcoin now, you should know that all miners’ and developers’ efforts contributed to it gaining value because Ethereum could’ve overturned the cryptocurrency, for example, one of the most promising crypto assets on the market.
However, Bitcoin remains a significant achievement in the crypto sector and continues to emerge as one of the most innovative forms of payment. But how can we become more familiarized with it?
Starts with the basics
Luckily, there’s plenty of information on the Internet about Bitcoin, but you can start reading about it from the source: the whitepaper. You can find it freely on the web, and it has only nine pages of information, so it can be studied easily.
The document includes explanations about transactions, the PoW consensus mechanism, and the incentivization process so you can get a broader idea of what Bitcoin truly is. If you struggle to follow through, you could hop on YouTube and find someone reliable enough to explain it thoroughly.
Numerous terms you might not understand right away mean the lecture can extend considerably, especially if you’re not familiar with the industry. That’s why Bitcoin is so complex: it takes a lot of time to grasp all the knowledge.
Unfortunately, most people choose to follow internet gurus or social media influencers who present information that is easier to understand, posing the risk of bias. There are many types of biases in crypto investments, and people should be wary of them because they influence their decision-making skills.
Find reliable sources and websites
Looking for explanations on the internet can be tricky, especially since numerous websites tend to present Bitcoin in a warped manner, especially when they want to sell you a product ―or scam you. That’s why it’s best to search a little bit more for websites that present Bitcoin info as it is and explain it without bias.
Established institutions, such as NGOs or universities, are more trustworthy than other websites, as they have operated for longer and are more likely to be accurate. At the same time, sites with expertise in the financial sector are reliable.
Avoid commercial websites since they always link to their products or services. Another way to check a website’s certainty is to check the date of the latest article or post. A reliable source is up-to-date with the latest changes in crypto, so a site talking about the first Bitcoin halving surely isn’t.
Finally, check if the authors are anonymous and the links are highly authority-based. These are small but important factors that show you freedom of doubt about a site. Sometimes, even if the site looks reliable, some links are placed strategically to make people click and buy crypto guides or something similar to compensate for their contributions.
Learn about securing your portfolio
Learning how you could get scammed while investing in Bitcoin will help you safeguard your portfolio and keep your assets in place. This should be done before setting up a wallet and starting to buy Bitcoin because you must know how to manage the private and public keys.
In cryptography, the technology that safeguards data encrypts is symmetrically and asymmetrically, which involves using two keys. The public key is also known as the public address, which can be considered as a bank account number as you use it to send and receive money. Hence, you can share it with others.
On the other hand, the private key should not be shared with anyone since you use it to access your wallet and funds. Investors use the private key to sign crypto transactions. If you lose it, you can never recover it or your funds.
Public key encryption allows people on networks to communicate and make transactions safely, ensuring confidentiality, authenticity, and integrity. On the other hand, private keys make it easy for users to hold their Bitcoins without needing governmental-supported wallets.
Read about tax implications
Although Bitcoin isn’t yet legal tender worldwide, only in El Salvador, it’s already exposed to many tax implications. Each country requires different taxes on investing in Bitcoin or other currency, so you must acknowledge them, complete all the necessary documents, and send them to the respective authority.
Since you may want to use Bitcoin for trading or selling it for profit, the transaction can be subject to capital gains and regular income taxes. If you hold Bitcoin for more than a year, it might be possible to owe between 0% and 20%, in addition to an extra 3.8% levy for higher earnings.
But that’s the case in the US, while other countries, such as El Salvador, Germany, and the United Arab Emirates, have a zero-tax policy on crypto. On the other hand, Denmark, the Netherlands, and India are some of the most demanding countries in terms of crypto taxation.
There are a few ways to avoid crypto taxation legally, such as investing in countries with zero-tax policies. However, it’s best to consult a tax professional to avoid further problems because being compliant as a crypto investor allows you to operate safely.
Do you intend to learn about Bitcoin in the future?
Many consider Bitcoin a revolutionary payment method, as users can adopt it without governmental implications. Therefore, Bitcoin helps spread worldwide access to funds, as there are no requirements for buying it. However, the learning curve is still challenging 15 years after its release, so people should take their time to fully grasp what Bitcoin is, from the consensus mechanism to scams and tax implications.