If you are reading this article, the chances are that you have heard of Bitcoin and want to learn more about it.
People often ask how to hold Bitcoin for some time but don’t know precisely how. There is some benefit to holding Bitcoin, but it must be done right to avoid issues.
This blog post will teach you all the ins and outs of having Bitcoin – from setting up your wallet, buying Bitcoins, storing them securely, spending them online or in-person, to making sure they’re accessible when needed.
So whenever you’re ready to dive deep into this topic, keep reading and get your notes handy.
What Is Bitcoin: The Basics
Bitcoin is a decentralized digital currency that Satoshi Nakamoto initially created. one can transfer the software-based cash between entities through cryptography, making transactions secure and highly transparent.
It also helps keep user identities private and regulate the flow of Bitcoin so it’s not over or under-produced in any given time frame. To start using this monetary system, you need only an internet connection—no expensive hardware required!
This is a crude form of explaining Bitcoin, but it’s the simplest way to elaborate upon its function.
Holding Bitcoin: Why You Should Do It
You may be wondering why you should hold Bitcoin. Here are a few reasons:
Bitcoin is the most secure digital currency on the market, and it’s doubtful that your coins will ever get hacked or stolen. When compared to more traditional assets like gold, where one has to store physical bars of metal in safe deposit boxes at banks or other institutions, which then charge fees for storage and upkeep costs.
Holding Bitcoins offers many advantages. There’s no need for expensive safety deposit boxes because all transactions occur online – meaning there’s less fee overhead than with fiat currencies such as USD/EUR/GBP.
One can set up their wallet using an app from a reputable company (like Blockchain) with state-of-the-art security features without having to rely on a third party.
Bitcoins can be stored in any location, even offline for maximum security. The value of Bitcoin fluctuates but has gained over 1000% in the last year! Learn more about the power of crypto at bytefederal.com.
Bitcoin: How To Hold It Safely
To begin holding your coins (also known as ‘HODL’), you should first get yourself a wallet. Go to Blockchain’s website and download their app from either the Apple App Store or Google Play Store, depending on which device(s) you use. After downloading the appropriate version of Blockchain’s app, open it up and follow these steps:
- Create an account by providing basic information such as name, email address, and password
- Decide whether you want to receive weekly industry news updates – this is entirely optional
- Choose the type of wallet that best suits your need
There are three options: (i) a ‘basic’ online wallet for beginners, (ii) an ‘enhanced’ online multi-signature wallet with added security features, and (iii) a ‘hardware’ offline cold storage option – this is recommended if you want to hold large sums of Bitcoin. Now you download backup recovery phrases which allow you to recover all stored coins in case something happens to your device(s).
Finally, you transfer Bitcoins from another account/wallet into Blockchain’s app.
Once done, select how much BTC or BCH you would like to transfer and click send! You can now use these funds anytime by going back into the app and clicking on “Send/Request.”
Bitcoin: Storing It Safely
If you have any Bitcoins, it’s recommended to store them in an offline hardware wallet rather than an online account as these are more secure. One such device which one can use for this purpose is Trezor – here’s how to set one up.
Go onto Trezor’s website and download their app from either the Apple App Store or Google Play Store depending on which device(s) you use. After downloading the appropriate version of Trezor, open it up and follow these steps:
- Create an account by providing basic information such as name, email address and password
- Using two-factor authentication (which requires your phone), verify your email address with Trezor
- Create a PIN which you will use to access your wallet – this should be at least six digits long and unique (don’t forget it!)
- Backup your recovery seed phrase by writing down 24 English words on paper in the order they appear
- Once done, click “Next” twice. Trezor’s website also features video tutorials for setting up the device if needed
- Transfer Bitcoins from another account/wallet into Trezor
Once complete, go back into Trezor’s app, select how much BTC or BCH you would like to transfer, and hit send!
Now that you’re storing Bitcoin offline with no chance of being hacked, consider making online purchases using an exchange. Make sure the website is secure and has a lock symbol in your browser. Only ever enter the wallet address (you can Google this).
Don’t provide anyone with your phone number or email address – ignore these requests and do not click any suspicious links sent to you by SMS/email. When prompted, type in the security code, so it appears on the screen.
Where & How to Hold Your Bitcoin?
The easiest way to hold Bitcoin is in your wallet app. You already know how to do this from the last part. However, if you’d like to have your Bitcoin work for you, this can be a bit more complicated.
For instance, you can participate in staking. Staking, also known as proof-of-stake (POS), is a type of algorithm by which a cryptocurrency blockchain network aims to achieve distributed consensus.
In other words, one will decide the creator of the next block for the Blockchain based on their stake in this ecosystem – e.g., how many coins they hold and how long they have saved them for.
This means you can generate passive income just by holding Bitcoin. You do not need any extra computing power or special hardware to do so! All that’s required are your Bitcoins.
This works because when people talk about staking, what happens behind the scenes is mining without using expensive equipment like ASICs/GPUs. Instead, it uses less electricity since all you’re doing is confirming transactions. It’s a lot cheaper and more eco-friendly!
Another option is cloud mining which allows users to buy computing power (hashing power) from hardware owners who sell them via contracts or shares. It’s kind of like buying time on the cloud. This method is profitable for miners because it reduces their equipment costs.
It’s also great news if you’re new to mining, as you’ll be able to get hold of contracts without needing any hardware or experience!
You can then sell your hashing power at any time depending on how much profit it brings in – go into Contracts and select “Start Mining” (if using Nicehash) or withdraw your funds by going back to Balances > My Balances. Don’t forget that there are no fees when withdrawing BTC, so this would allow you to keep 100% of what you earn!
And finally, you can also loan your Bitcoin out to others who are willing to pay interest for it. This works by loaning your Bitcoin out through a peer-to-peer lending platform that other borrowers use to get loans via financial institutions or banks.
There are tons of ways you can earn while holding Bitcoin, but remember that nothing comes without risks either. Make sure to do thorough research before committing any money, and start small if you’re unsure.
Common Mistakes by New Bitcoin HOLDers
Not holding long enough: People often buy their Bitcoins, send them somewhere else and expect the price to increase. They then sell too soon because they think they missed out on increased profits.
What they don’t realize is that if you hold your coins for longer, it will allow time for the market price to rise, so even if you sold earlier than expected, there was likely still money left in it!
Not selling high enough: This relates to what I mentioned above about not trading at a loss. It’s okay not to get instant profit but when you see an opportunity arise (e.g., someone wants your BTC more than you do), take advantage of it! If you’re unsure, break-even and wait for the price to go up.
Not having enough BTC: Although this is beyond most people’s control (e.g., buying $100 worth of Bitcoin), one can avoid it by investing more than you usually would or trading something else like altcoins.
Having a diversified portfolio allows investments in different cryptocurrencies, so if one goes down, there are still others that will hopefully rise. Not only do they act as good backup but also counterbalance each other – e.g., an increase in Dash could lead to a decrease in Ethereum due to investors flocking towards it instead.
Trying your luck with low-yield coins: As I’ve mentioned before, investing smaller amounts into lower-yield currencies is fine but never put all your eggs in one basket!
This means that if you invest $100 into 15 different low-yield cryptocurrencies, it’s okay to lose some or even most of them because the ones that do go up will make up for those losses. On the other hand, investing $15 each into high yield currencies like Dash/Stratis. This could lead to greater profits overall due to compound interest.
Remember, not everyone has access to large sums, so don’t feel discouraged if you only have a small amount. You can still earn by trading altcoins and loaning out BTC just as long as you’re willing to research these topics further before committing any funds.
It doesn’t matter whether your portfolio does well or not. The most important thing is to stay HODLing and keep believing in Bitcoin!
When & How to Enter the Crypto Market
Bitcoin has been the go-to cryptocurrency for many people lately because of its price rise, fast transaction speeds, and secure network. This is why more new investors are looking to enter early in hopes they too can earn profits, but what exactly should you do?
It would help if you were on the lookout to enter the market. However, in all honesty, the right time was yesterday, and the next best time is now. Even though it’s already somewhat late, there are still ways to earn a decent amount if you’re willing to learn more about these topics and put in some research into where & how to buy Bitcoin.
You should also diversify your portfolio by holding multiple cryptocurrencies instead of focusing on one type – e.g., only Ethereum or Litecoin. Having other coins not only acts as a good backup but can also counterbalance each other.
For e.g., an increase in Dash could lead to a decrease in Ethereum due to investors flocking towards it instead. When this happens, its value will either go up or stay the same depending on whether they rise together (which hopefully they do) or against each other.
In addition, you should be willing to hold your coins for a more extended period, even when everyone is telling you that the price will go down or up shortly. This takes patience, but if they’re suitable investments, it shouldn’t matter whether you wait days/weeks/months.g. e.g. holding Dash during 2014-15 and Stratis until early 2017 were both excellent decisions because their prices increased by over 1000% since (respectively)
Your Crypto Journey Begins Now
Since cryptocurrencies are still relatively new, there is a lot of uncertainty surrounding them, making people feel discouraged from investing. Don’t be afraid to try something new. Now is your time to shine.