I'm pretty sure that you are new to Bitcoin and other crypto-currencies and you want to get started with taking advantage of this new commodity that many call a bubble.
It's my responsibility to tell you that investing in Bitcoin and other cryptocurrencies are super risky. The reason why it's highly risky is that the crypto-currency market is not regulated at all.
i.e. No government, no middleman, no FTC, no exchange can determine the price of a bitcoin or the price of any cryptocurrency for that matter.
Before you start, here are some general guidelines to remember to have success in investing with Bitcoin and crypto-currencies:
- Use only the part of your money which you are comfortable in losing. Don’t go overboard or go all in to cryptocurrencies.
- The usual chart patterns that you see in Forex, Stocks, and other commodities won't apply here for the most part.
- Most of the crypto-millionaires who got created in the past few years were out of sheer luck and not because they had some special skill. Kudos to them for foreseeing the future.
- Most of the crypto market is driven by the general news. So, if Bloomberg or CNBC suddenly calls bitcoin a bubble - expect a rapid change in value.
- Investing in crypto means you should be ready for rapid value movements. If you look at old charts, you could see that the most benefits were received by the people who actually held on to their investment even when the market went down.
The basic philosophy behind the value of Bitcoin going up is deflation. Fiat currencies usually undergo inflation because of our governments printing money and banks increasing their lending without any limits. When there is more supply of money, money inflates. All of a sudden prices increase all around for everything.
When it comes to most commodities like Gold, Silver, and Oil. There is only so much in the world that could be created. More and more people buy, more and more the supply goes down. When demand becomes high and the supply is low, the prices of Gold, Silver, and Oil increases.
This is called deflation. Bitcoin similar to Gold and Silver has a maximum supply. The maximum supply of Bitcoin is 21,000,000. Right now we are at a total of 16 million bitcoins in circulation. The whole of bitcoins would be released into the market by around the year 2132.
So, as long as the fiat currency is getting inflated, bitcoin has the potential to deflate.
Back to investing in Bitcoins from India. You can potentially make money by doing three things:
- Buy Bitcoins and Just Hold It
- Buy Bitcoins and Trade Altcoins (Alternate Crypto Currencies)
- Mine Bitcoins
How to Buy Bitcoins and Hold It?
In India, there are a couple of exchanges to buy bitcoins with your bank account by transferring the amount locally.
I've personally bought bitcoins using Zebpay.com. It was a smooth experience. Use my referral code if you signed up with them, they will give you Rs.100 worth of Bitcoin. The code is: REF43442601
There are a couple of exchanges in India where you can buy bitcoins from. The full list and the trading prices among all the Indian exchanges is available here: Bitcoin Rates
Usually, the prices in India are a tad higher than other international markets. So, if you are residing outside India in some other country, you might get better rates there.
Once you buy some bitcoins, don't hold the bitcoins in the exchange wallet. It's better to hold the bitcoins in your computer or even better a hardware wallet like the ledger nano s. It's not safe to hold the bitcoins for the long term at an exchange. Because if the exchange's servers get hacked, your wallet gets hacked too.
The best and the most secure way to hold your bitcoin and cryptocurrencies is to get a hardware wallet.
To hold the bitcoins on your computer, use Exodus wallet: https://www.exodus.io
To hold the bitcoins on a hardware wallet, use Ledger Nano S:
Ledger Nano S - Cryptocurrency hardware wallet
How To Trade Altcoins? (Alternate Crypto Currencies)
Once you buy your bitcoins, you can trade altcoins on any of the available exchanges. The most popular ones are:
There are so many exchanges. Be careful and stick to the top ones by volume.
You can search for altcoins and see which exchanges the altcoin is available over here: https://coinmarketcap.com/
How to Mine Bitcoin?
Mining bitcoin requires a heavy investment and also requires running costs such as electricity bills and other maintenance bills. Unless you are a techie, I wouldn't advise you to get some mining equipment and set it yourself.
Bitclub offers a simple and easy way to mine bitcoin and other crypto currencies. You can buy a contract for 1000 days and they will take care of buying the mining equipment, paying for electricity etc. Bitclub is one of the top Bitcoin mining pools in the world. I've been with them for quite a while and they are good. Check them out: bitclub.network/mze3e
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