Facts You Need To Know Before You Trade Bitcoin

Bitcoins took the world by storm when they first showed up their face in the financial markets and they are continuing to mesmerize many individuals. The fact that it is an intangible currency that is not controlled by any bank make many individuals to brush it aside like a bubble which will soon burst. But things are about to change on how the world views this digital currency.

Currently, a number of chain stores have started accepting bitcoins as forms of payment and its immense increase in value is also something not to be taken lightly. But before you take your money and start to trade bitcoins, here are some facts you need to know about it.

They are not regulated by central banks

No central bank in the world regulates the supply and demand of bitcoins as is the case with other currencies. The lack of control and anonymity surrounding the coins make it to be somehow risky to consider as a serious investment because there are no guarantees whatsoever that your investments will be safe. Actually, someone could steal it right under your watch and there is nothing you can do about it.

Bitcoins are stored in digital wallets

Bitcoins exist in what are known as digital wallets that are encrypted in the computers of individuals. Though the digital encryption is fairly secure, you risk losing your coins should you lose your computer. This is unlike the credit cards which if you lose one then you just walk into the bank and get a replacement without losing a coin.

Perceived value

A majority of people seem not to understand what controls the value of the bitcoins. It has a perception in value which can fluctuate without any due consideration and this makes it a very risky venture. For instance, you might make a purchase of the coin today at a higher price only for the price to fall by over a half within the next few days and the converse is also true.

Few bitcoins exchanges

Before you trade bitcoins, you need to be aware that there are very few exchanges that deal with bitcoins in the world. Don’t expect to purchase them and hold them in your hands because they are digital currency and they only exist in the digital form. Presently, bitcoins have been gaining in value and some analysts believe that it will be accepted by a majority of businesses as a mode of payment and become just like the other currencies currency. Just be cautious before investing in it.