Bitcoin (abbreviated BTC) is a digital currency and peer-to-peer (P2P) payment system created by software developer Satoshi Nakamoto. While its origins are unknown to the general public, Bitcoin has attracted a lot of attention from the financial world over the past few years. With this widespread attention, the Bitcoin investment process is easier than ever before. However, it is very important to know that Bitcoin is not an ordinary investment (e.g. stocks) as Bitcoin is a much more volatile commodity, so don't buy until you know the risks.
Step
Part 1 of 3: Buying and Selling BTC
Step 1. Create a Bitcoin wallet
Today, buying and selling BTC is much easier than before. As a first step, create your Bitcoin wallet. As the name implies, this wallet is a digital account that makes it easy for you to buy, store and sell BTC. Think of it like your universal checking account. However, unlike a checking account, creating a Bitcoin wallet is usually less than a minute, can be created via the internet, and is fairly easy to do.
In Indonesia, you can visit the Bitcoin.co.id website to create a leading, reliable and user-friendly Bitcoin wallet
Step 2. Link your bank account to your Bitcoin wallet
Once the wallet has been created, it's time to fill it with BTC. Usually, this is done by providing financial details for the original bank account, such as when creating a PayPal account or signing up for another online payment service. Generally, you'll need to provide at least a bank account number, routing numbers to the account, and the full name of your bank account. Everything can be seen in your passbook or online bank account.
- Note that you will also need to provide contact information, such as a phone number.
- Linking a bank account to a Bitcoin wallet is no more risky than shopping online. Leading Bitcoin services have high security and encryption standards. While Bitcoin services have previously been attacked by hackers, so have major online shops on the internet.
Step 3. Buy BTC with money from your bank account
if you have provided your bank information and have been verified by a Bitcoin service, buying BTC to put in your wallet will be easy. Usually, on the wallet page there is an option that says "Buy Bitcoin" or something. Click this option to enter the BTC purchase transaction process from the money in your bank account.
It should be noted that the price of Bitcoin changes from day to day, sometimes the changes are quite significant. Since Bitcoin is a new type of currency, the market is not yet stable. Bitcoin exchange rates can be found on the Bitcoin service site. As of February 11 2017, 1 BTC is equal to 13,307,500 rupiah
Step 4. Use BTC to shop at retails that accept Bitcoin
In recent times, the number of businesses that have started accepting BTC payments has increased. While all of these businesses are still in the minority, there are big names that are already doing it. Below is a list of online suppliers that accept BTC:
- Amazon
- WordPress
- Overstock.com
- Bitcoin.travel
- Victoria's Secret
- subway
- Zappos
- Whole Foods
- If you are market savvy or are lucky, you can make a profit by buying Bitcoin when the price is low, then buying goods when the BTC value is high so that you save money on acquiring goods. You can sell these items for profit or keep them.
Step 5. Sell BTC to other users
Unfortunately, selling BTC is not as easy as buying it. There is no easy way to “cash out” your Bitcoins and store them in a bank account. Instead, you have to find other users who want to buy your BTC using money or goods/services. In general, one of the easiest ways is to register on the Bitcoin market. If you find a buyer, you can complete the transaction via the website, or meet the buyer in person. To use this method, you usually need to create a seller account and verify your identity in a separate process from creating your Bitcoin wallet.
- In America, CoinBase and LocalBitcoins are two websites that offer this method of selling. In the UK, BitBargain and Bittylicious are the two leading options.
- In addition, some sites, such as Purse.io, allow sellers to give BTC to buyers who then use their own money to buy goods online and send them to sellers. In essence, it's a circular way of using BTC to buy from suppliers that don't accept Bitcoin.
Step 6. Alternatively, sell your BTC on the exchange
Another option for sellers is to use a Bitcoin exchange. These sites work by pairing sellers with potential buyers. If a buyer has been found, this site functions as an intermediary or testamentary service, which holds funds until both parties are verified and the transaction is legal. Usually, this service charges a fee. This method of selling is usually not instant. In some cases, users even complain that selling with exchange services takes longer than other options.
- Bitcoin exchange is also available at Bitcoin.co.id.
- In addition, some exchanges like Bitcoinshop allow you to exchange BTC for other digital currencies for example (Dogecoin and Litecoin).
Part 2 of 3: Using Alternative Options
Step 1. Consider setting up a regular purchase plan
If you're serious about investing in Bitcoin, it's a good idea to set aside some of your salary to buy digital currency. Here's a way to accumulate a lot of BTC over time without one big spend. Many Bitcoin wallet sites (eg Coinbase) offer the option to set up regular withdrawals to buy BTC. The trick, you specify a certain amount of money, and this amount is withdrawn from your account at regular intervals and used to buy BTC automatically.
Step 2. Consider buying BTC locally
If you want to save money in a local community, consider using a service that will allow you to sell Bitcoins to people near you. Instead of being paired with anonymous shoppers from all over the world, some sites provide the option to search for sellers in your area. If you decide to meet this seller in person, take the usual precautions when meeting someone you know via the internet. Meet in public during the day, and if possible, don't come alone.
Localbitcoins.com is one of the leading local Bitcoin marketplaces on the internet. This site lets you search for buyers in more than 6,000 cities and 200 countries
Step 3. Consider using the services of a Bitcoin investment company
One option that is considered more “safe” than buying and selling Bitcoin directly, is to entrust your money to an investment company. Bitcoin Investment Trust, for example, allows users to buy and sell company shares just like any other public company. Since the company only deals with buying and selling BTC, the company's stock price is directly related to the price of Bitcoin. However, some users like this option because professional investors in this agency are (supposedly) experts and the process of finding sellers and managing Bitcoin accounts doesn't have to be done alone.
Step 4. Consider “mining” BTC
Have you ever asked where did Bitcoin come from? In fact, Bitcoin was created through a computational process called “mining”. Simply put, when mining BTC, your computer competes with other computer users to solve complex problems. When your computer solves the problem first, you are rewarded with BTC. The advantages of mining BTC include the fact that in essence, you are “making” BTC without using any money. In practice, however, maintaining status as a Bitcoin miner requires special hardware.
- The entire mining process is very complex and goes beyond the scope of this article. For more information, take a look at this article
- In addition, you should understand that BTC is given in the form of “blocks” of several BTC at once so it is advisable to join an established “group” of miners. That way, you can work together to solve problems (blocks) and share the rewards. Solitary miners are usually not competitive and can spend a year without earning a single Bitcoin.
Part 3 of 3: Profit from Investment
Step 1. Buy cheap, sell high
In essence, the strategy of buying and selling BTC is not much different from stocks or commodities in the real world. Buying BTC when the rupiah exchange rate is low and selling it when the exchange rate is high is a profit proposition. Unfortunately, because the Bitcoin market is volatile, its price increases and decreases are difficult to predict. Therefore, the risk is quite high.
As an example of the volatility of the Bitcoin market, as of October 2013, the price of BTC ranged from Rp1,560,000-Rp1,625,000 per BTC. Within a month and a half, the price has increased tenfold to almost IDR 13,000,000 per BTC. A year later, the price reached around Rp. 4,550,000. No one knows when the price spike will happen again
Step 2. Monitor BTC market trends frequently
As mentioned earlier, it is almost impossible to predict the certainty of the Bitcoin market. However, your best hope of making a return on your Bitcoin investment is to keep a close eye on Bitcoin market trends. Since the Bitcoin market is highly volatile, profit-making opportunities such as exchange rate spikes can appear and disappear in a matter of days. Therefore, always pay attention to the Bitcoin exchange rate to look for opportunities for success.
It's also a good idea to register as a member of a Bitcoin discussion forum (eg the forum on Bitcointalk.org) so you can connect with other investors about market predictions. Keep in mind, no investor, no matter what expert he is, can know the certainty of the Bitcoin market
Step 3. Use BTC to buy more stable investments
One way to get some stability out of your Bitcoin wealth is to buy more stable investments, such as stocks or commodities. Several sites facilitate this. For example, Coinabul.com lets you buy gold with BTC. You can even sell BTC and use the money to invest in the stock or bond market. While conservative stock portfolios usually offer the best potential for steady and moderate growth, most financial experts agree that the riskiest stocks are still less volatile than the Bitcoin market.
Step 4. Never invest more money into BTC than you can afford to burn
Like any type of investment, you should treat investment money as "gambling" money. If you are lucky, you make a profit, but if you lose, your financial condition should not be destroyed. Don't invest in Bitcoin more than you can afford. BTC can disappear in the blink of an eye (and has happened before), so the consequences of investing in Bitcoin are risky.
Don't hold on to the sunk cost fallacy. This means that your investment falls “too deep” so that it cannot rise. Skipping price spikes and losing a little is better than waiting and losing big
Tips
- If you want to keep your privacy, buy Bitcoins by mail using a service like BitBrothers LLC. For a fee, this service will buy BTC for you without ever getting on the internet.
- You may live near a BTM, which is a special machine that functions like an ATM and allows you to buy Bitcoin directly. Check out Bitcoinatmmap.com to find a BTM near you.
- It should be noted that the price of Bitcoin varies widely from country to country. If you are willing to take the risk, you can make a profit by buying cheap BTC in one country and selling it in another. However, there is of course the possibility of losing money if the market changes.
