Personal Finance Dec 13, 2021 06:26 PM EST

How to Safely Invest in Bitcoin?

By Staff Reporter

How to Safely Invest in Bitcoin?
How to Safely Invest in Bitcoin? (Pexels)

Bitcoin and cryptocurrency in general guarantee some amazing profits if invested correctly. Those investors who bought Bitcoin in 2008-2016 probably can tell that it's a great idea to invest in cryptocurrency. The price of 1 BTC in 2008 was ridiculously low - $0.0008, then $0.08 in 2010. Even today, Bitcoin is still a good idea to invest in. But how do you safely buy and store Bitcoin? This article is dedicated to safe methods of storing Bitcoin, and what to do to keep BTC safe upon purchasing coins.

You can use exchanges like to buy BTC safely, but you also need a safe wallet and follow some safety tips.

What Do You Need to Know Before Purchasing Bitcoin?

Before you invest in Bitcoin, you need to figure out a few important things. To buy Bitcoin, you need a cryptocurrency wallet. Yes, you can purchase without having a wallet, your purchase will be kept in your exchange account wallet. But experts recommend transferring your savings to a private wallet.

Another very important thing to remember is to never share your private key. Make sure you have it saved somewhere, preferably not in a digital form so it can't be stolen. Your private key is the tool that allows you to confirm transactions. Say you want to transfer your Bitcoin from one of your private wallets to another. You need to confirm the operation by using the private key.

If someone else knows your private key, they can transfer your BTC to their wallet. When the transfer is confirmed, you can't get your money back. When someone transfers money, it's not exactly a transfer. Those coins are simply being attached to another public address, and you no longer can get them back since the new owner has to use their private key, and a hacker won't do that.

How to Choose a Safe Wallet to Buy Bitcoin?

One very important thing to note before buying Bitcoin is how to choose a wallet. There are two most used types of wallets:

l  software crypto wallet;

l  hardware crypto wallet.

The first is also called "hot wallet", the second is referred to as "cold wallet". There is also a paper wallet which is rarely used these days. If you are planning to invest a lot of money in Bitcoin, you should consider buying a hardware wallet.

A hardware wallet is a tool, you plug it into your computer. It stores your private key in an offline mode, hence why it's called "cold" in comparison to a "hot" wallet which is connected to the Internet at all times. The hardware wallet is much safer since no one can hack it.

Always use safe exchanges, store bigger investments on hardware wallets, and consider software wallets for everyday purchases. That's how you can keep your investments safe.

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