Key Points You Should Know [Bitcoin & Cryptocurrencies]

If you are on the verge of diving in to the Bitcoin and Cryptocurrency space, there are a few key points you should know and understand before you take the plunge.

Is Bitcoin price stable?

The short term price of bitcoin can move in an unpredictable manner. There is no specific thing or formula that will tell you where the price will go next. This is mostly due to Cryptocurrencies young economy and the lack of liquidity in the market at times. It is for this reason that I tend to steer away from technical analysis and concentrate on the fundamentals of the different projects to better evaluate the coin for long term hold. At this point and time Bitcoin is considered a high risk asset, and I would encourage you to treat it as such. Never invest more than what you can afford to lose in the cryptocurrency markets.

Can I reverse a Bitcoin Transaction?

You can not reverse any transaction in the bitcoin network. once you send the Bitcoin out of your wallet there is no practical way to get them back, pretty much impossible. You have to be extremely careful when doing business with individuals and organizations when using Bitcoin or any other Cryptocurrency. only deal with people and companies you know and trust and or have established reputations in the industry. For the most part Bitcoin will give you an error when typing in an incorrect address but you should always double check before sending. there are many smart minds working on how to make transactions more secure on the network, I expect better features rolling out in the upcoming years.

Are Unconfirmed Bitcoin Transactions Secure?

In order for a transaction to be valid it needs to go through several confirmations in the network. Each transaction receives a confirmation score ranging from 0-30 with 0 being the least safest method and 30 being the most reliable. I would not recommend a 0 confirmation transaction unless you know the individual personally. Each confirmation can take any where from a few seconds to about 90 minutes with 10 minutes being the average. The transactions also compete to be confirmed, if you pay too low a fee miners might take there sweet time to get to it or may never get to it at all. I would suggest to make your fee proportional to the value and urgency of the transaction.

Is Bitcoin Private?

You will need some effort and technical knowledge to achieve complete anonymity when dealing with Bitcoin. All Bitcoin transactions are stored permanently on the public ledger and any one can see the address it came from, the amount, and the receiving address. what they do not see is who owns the addresses but with new sophisticated systems that process pattern recognition and data analysis, it is now possible to put a name to each address. One thing you could do to combat this is to produce a new address to your private key each time you make a transaction. There are also Privacy coins you can use like Monero, Zcash, Verge and more that have extra privacy mechanisms built in to the code. Remember it is your responsibility to keep your cryptocurrency safe. You should try your best to educate yourself and follow best practices just like, or even more than your regular fiat currency.

How Can I Secure My Bitcoin?

Bitcoin & certain Cryptocurrencies have actual value, and just like anything else with value you have to keep it safe and secure. Bitcoin gives you the freedom to take control over you money and data but it also takes the responsibility from your bank and your government and places it on you. If you lose your Bitcoin for any reason there is no one you can run to and complain to try to get your money back. At the same time, Bitcoin does provide a great deal of security if used properly. Here are a few secure hard wallets that can keep your Bitcoin safe. Click here to check out some hard wallets.

Will Bitcoin Improve?

Blockchain is a fairly new technology being introduced only 9 years ago in 2009 by the most unknown famous person in the world right now, Satoshi Nakamoto. The blockchain is in constant development. Some of the smartest people in our world are tirelessly working to improve the core software everyday. You have to be ready for some growing pains. Keep in mind no one knows what the future holds for Bitcoin and the blockchain technology.

Do I have to pay taxes on my Bitcoin Gains?

Yes, Bitcoin is not yet viewed as an official currency. It is being taxed as an asset meaning you are liable to pay for short and long term capital gains. One thing you could do to minimize your liability is create an LLC and treat your crypto investing like a real business. This way you will be able to write off a nice portion of your taxable gains. Please consult your tax specialist for more details.

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