10 Useful Information Before Investing In “Bitcoin”

Hussam Abdulnabi (Dubai)

The global interest in investing in digital currencies is growing day by day, so it has become common for any gathering of individuals to see intense discussions about the “Bitcoin” currency between a strongly supported group and an investor or willing to invest , and another group completely rejects the idea of ​​digital currencies and considers it an illusion. It is huge and a trap for investors’ money, in addition to a bubble and a threat to the global financial system due to its use for suspicious purposes and in violation of laws.
Although “Bitcoin” specifically, as the first digital currency to be issued and the most famous in the world of digital currencies, sees steps towards its recognition in some countries, those who reject it still object to its existence due to their lack of knowledge. of some details such as what “Bitcoin” and how it originated ?, How is it traded and invested in? What are the benefits and objections to it? What is meant by “Bitcoin” mining? Where does this “virtual” currency get its power from? What is the basis on which its price is determined? What is the encryption and blockchain system? And what do experts who want to trade and novice investors in general advise? These are legitimate questions that we answer through the following report:
“Bitcoin”, the first digital currency to be issued in the world of digital currencies, was introduced in 2009 by a man nicknamed Satoshi Nakamoto and his goal was to avoid the problems of the old financial system and no one knows the identity of this person. until now.
Bitcoin has the same characteristics as cryptocurrencies or virtual currencies, the most prominent of which is that its presence is virtual and only via the Internet, where trading takes place only through computer screens without a physical presence such as cash, and the preservation of the “Bitcoin “currency is done through an electronic wallet that has a personal key and a password that is known only to the owner of the wallet.
Bitcoin is characterized as a decentralized currency, which means that there is no government, government agency or central bank that issues it, controls its value and determines its own policies. Digital transactions via “Bitcoin” or other digital currencies are easier than other financial transactions, which are alternated with intermediaries that increase the price of the money transfer service. Money transfer and digital transactions are also done in a way that suits the characteristics of our current era in terms of time, effort and speed to execute the transaction. The encryption technology also offers the advantage of not being able to detect complete transactions between two people, which retains their confidentiality and privacy.
Bitcoin offers cheaper transactions than traditional financial transactions, which is why it is very popular among followers, whether developers, investors or miners around the world.
It should be noted that each transaction is held by “Bitcoin” in a blockchain block, where the type and date of the transaction is recorded, and no one can manipulate information about completed transactions or mislead this system. There are some countries that allow anyone who does not have a bank account to trade in the currency “Bitcoin” as a fast and secure alternative to transfer money anywhere in the world.

Mining
The term “Bitcoin mining” has become a general term and simply means the process responsible for issuing currencies from “Bitcoin” where the miner solves and processes complex calculations mediated by advanced computers that have certain specifications, and as a result of this process, the miner acquires Bitcoin, but this does not mean to acquire On “Bitcoin” indefinitely, as the mining reward is halved every 4 years to the value of the currency, its strength and its ability to various goods and services to maintain, to maintain.

investment
Bitcoin is bought from reliable digital platforms and a digital wallet is created to keep the balance of the currencies in it. In general, the investor not only buys but chooses the right time to buy the currency at the lowest possible price at the moment for sale. in which it is traded, and then waits until its price rises and reaches the level of He sells it at the high price, and takes advantage of the price difference between buying and selling.
Individuals can invest through contracts for difference, which is a method of trading and investing that takes place outside the framework of stock exchanges, where trading and buying and selling transactions are carried out at any time and anywhere on electronic platforms according to the price movements that take place . in the financial asset, without actually owning the asset.
The investment is made through contracts for difference by signing up with a trading company that provides trading services to investors, and then transactions are made based on the change in the price of “Bitcoin” against the US dollar and other currencies.

sources of power
Bitcoin draws its power from supply and demand. The more buyers, the higher the price, and vice versa. It can also be said that relative scarcity is the main source of power as “Bitcoin” is not easily available, and there are a limited number of currencies in the market and available for exchange, which regulates their number and their availability control. or scarcity. Experts believe that “Bitcoin” and cryptocurrencies are generally considered easy ways to transfer money, and this contributes to increasing the demand for it, which increases its value.

encryption
“Bitcoin” depends on transactions in which it is a party to encryption technology, which is why some digital currencies call the term “cryptocurrencies” where digital currencies are exchanged from one user to another and there is no third party that acts as an intermediary in these transactions. All information related to financial transactions is recorded in the so-called blockchain or blockchain, which is a large and complex database whose data cannot be tampered with or the information stored in it can be hacked.

Objections
Despite taking “Bitcoin” a global position and a wide distribution among those interested in the economic and financial sector, there are many objections to the use of “Bitcoin” and other digital currencies, including the lack of authority or control that regulates its conduct in general, which has led to concerns about their use in the transfer of illegal funds or financing of transactions involving illegal activities, and therefore many countries have criminalized the trading or exploitation of digital currencies.
Another objection is that digital currencies could pose a threat to the old financial system, and could pull the rug by converting all transactions to digital transactions, but in reality, cryptocurrencies could be the natural alternative to fiat in the future. be currencies.
As digital currencies see sharp and sudden price movements, there are objections to “Bitcoin” in terms of its stability and being a store of value, and this is something to consider when making multiple transactions, and that ” Bitcoin ”mining requires devices with good specifications, processing units and more advanced electronic chips, which consume a lot of electricity and are not suitable for those who want to enter this field.

Tips
Yasmine Al-Ali, a financial advisor and investment expert, gives a number of tips before trading on Bitcoin CFDs, the first of which is choosing a trading company that is licensed and monitored by well-known regulators and provides great services.
She said it is necessary not to trade during volatile times, and for new traders it is advised not to trade on “Bitcoin” before training on a demo account for a period of at least 6 months does not become. She added that it is also important to choose an easy-to-use trading platform with training on all its orders to make the most of them while making trades, and note the need to follow the market well while news-related reading and follow-up. to the crypto-currency market, and to adhere to a certain strategy whereby the market is better managed Completion of transactions according to this strategy.
Al-Ali recommended that those who want to trade, carry out the technical analysis process accurately and not use many distracting tools, as the simpler the analysis, the better, explaining that in general it can be said that contracts for differences depend on different prices The moves may differ from time to time.
Al-Ali concluded by noting that regulators always warn against entering this investment field without understanding and careful and conscious study, especially as there are some fears about investors’ interest in digital currencies for any reason. or to lose the existence of another technological currency. alternative, which generally lose digital currencies and their value and fall Their prices are large.

recordings
Digital currencies are taking steps towards their recognition and use in daily transactions, and there are some countries that have reconciled with digital currencies like “Bitcoin” and treated it as the money of the future. ATMs that can provide “Bitcoin” have spread in many countries, where anyone can buy “Bitcoin” with ordinary cash or credit cards, in addition to the fact that many stores and companies in the world recognize the value of digital currencies and accept it as a kind of Payment methods available.

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