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What should you know about Bitcoin before using it?

Bitcoin is quite different from fiat (currency issued by central banks) currency. The way of exchanging bitcoin is different than the money that is exchange in banks or among businesses. One should take his/her time to investigate thoroughly before using bitcoin and specially before transacting a huge amount. Just as you take care of your wallet the same applies to bitcoin (wallet) or maybe even more. Due to the unexpected rise in value of bitcoin more and more people are attracted towards it. You may be trying to acquire more and more information about bitcoin. Here are few important things you should also know.

Wallet security

Everyone keeps his/her wallet secured in real life and the same applies to bitcoin keys (private and public). Bitcoin allows you to transfer money from anywhere to anywhere across the globe easily and you are in control of it and your money. The feature of transferring money from anywhere to anywhere also needs a great security feature. Bitcoin provides a high level of security if it is used appropriately. It is the responsibility of the user to choose good practice with the aim to protect their money (wallet).

Bitcoin price volatility

Due to bitcoin’s young economy, interestingly new nature, and illiquid market the prices are highly volatile. They can increase or decrease abruptly within a short period of time. As a result, it is not recommended to keep your savings with bitcoin until the market matures. It should be considered as a high-risk asset and one should not “store money” in bitcoin wallet that one cannot afford to lose. There are many service providers that convert Bitcoin into the local fiat currency, which you might have received as payments from someone.

Bitcoin transactions are irreversible

If by mistake you have made a wrong transaction with someone then that transaction cannot be reversed. A transaction once made is made forever. The only way is that the wrong transaction can be refunded to you by the person who has received your funds. Hence you should transact with only those businesses or organizations that you know and trust. Utmost care should be taken when entering into any transaction. Bitcoin can detect typing errors and usually will not send the money to an invalid or unknown address by mistake as there are private and public keys. In future, additional services may exist to provide more protection and provide more choices to the customers.

Bitcoin addresses are known

You will have to put in some efforts to protect your confidentially while dealing with bitcoin. All transaction addresses are stored in a public ledger and are permanently on the network. That is, anyone can see the transaction and balance of any Bitcoin address. But the identity of the person behind the address remains unknown till the information is revealed during purchase. Each Bitcoin address is used only once.

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