The total market capitalization of cryptocurrencies is more than two trillion dollars, and of those two trillion about fifty percent corresponds to bitcoin, the first cryptocurrency and the one that first comes to mind of most people if they are talk about these types of digital assets.
In its short history, bitcoin was born on January 3, 2009, this asset has been the object of both investment and theft, it has been praised as the future of decentralized finance and attacked as a bubble that will destroy the money of the unwary -the favorite comparison it’s tulipomania, the favorite example of those who see bubbles in the growth of any asset – and at the moment bitcoin and the crypto market as a whole seem to be entering a consolidation phase, with institutional investors definitely entering.
“Bitcoin, what it is and how it works” This is probably the first question to be resolved before even considering investing a single dollar or euro in bitcoin, after all, how can you risk your hard-earned money on an asset of which nothing is known? Well, bitcoin is a digital asset that is based on the blockchain, a network in which all users can participate and which in turn guarantees the authenticity of all bitcoins and the transactions and contracts in which they are used.
As millions of users participate in the network, it is an asset that is more difficult to counterfeit even than fiat currency, since it would be necessary to check half plus one of the network participants for counterfeiting to be the new reality, a titanic effort . In addition, bitcoin is postulated as a currency available in a future that is closer than far.
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Scam and theft, dangers to avoid by the investor in bitcoin
There is so much information on the internet, and cryptocurrencies already have such a journey, that it is difficult for someone to end up investing their capital in a fraudulent platform as long as the investor is limited to known platforms and verifiable solvency, whether they are exchanges such as Binance -for Whoever wants to buy and sell- or online brokers like Plus500 -for those who prefer trading with leverage- it is easy and necessary to carry out even a minimal investigation to see if the company has references and the approval of its users. This will avoid suffering scams when depositing money on platforms that end up making a smoke bomb and disappearing with the money of the unfortunate investors.
The second risk, that of theft, is going to be a constant danger for anyone who keeps their money in an exchange, since cryptocurrencies are an asset that provides unprecedented anonymity, laundering a bitcoin theft – which can be extremely Profitable – It is easier than laundering a theft of fiat money or stocks, for example. This risk can be avoided to a great extent by keeping cryptocurrencies cold, this is in an electronic or paper wallet, but be careful! If the wallet is second-hand – something that is better to avoid, to save a few tens of dollars you can you may lose everything – the seller may have saved the seed or seed phrase -series of random words that are used to access the content of the associated wallet- and to access the cryptocurrencies of the unsuspecting buyer, they would only have to buy an electronic wallet from the same manufacturer and move the cryptocurrencies to the new device.
This last risk does not exist in online trading brokers, since they use the movement of the price to open leveraged positions, and no asset is bought, sold or custody, yes, that same leverage must be well understood before starting to trade. trading as it has significant inherent risks.
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Be careful if you operate on credit
Finally, you must be very careful if you operate with money that you do not have or have borrowed on credit, since cryptocurrencies are very volatile, it is better to risk what you have and you can lose without major losses and if you If you trade with bitcoin, it is essential that our broker protects us against negative balances, which implies that only the money that is deposited is risked, not a penny more.