TMCnet Feature
January 29, 2021

Is Bitcoin Safe To Use In 2021?

Once again, bitcoin is on everyone’s mind in the world of technology and economics alike as the cryptocurrency’s valuation skyrocketed during the coronavirus pandemic. And yet, its volatility is the same as it’s been before, and coupled with an abstract technological conceit; bitcoin is still perceived as a bit of a mystery by many. Is this a good time to get on board the hype train? Read on for our analysis on the matter.

Is bitcoin safe and legal?

No doubt this is the proverbial elephant in the room for bitcoin mining and its safety as an investment. As this is on the bleeding edge of technology, rules and regulations around cryptocurrency are in constant flux. A growing number of governments worldwide now offer a regulatory framework for purchasing bitcoin and other such assets, and there’s no doubt their numbers will keep growing over time. The few notable exceptions with outright hostile legislative moves are China, Russia, Vietnam, alongside a smattering of South American countries.

Since bitcoin is a digital, peer-to-peer payment system, it is not regulated by any central bank of the world; it serves as a very different alternative to legal tenders. The guarantee of anonymity and the complete lack of exchange rate fees made it (not to mention the technology behind it) extremely attractive to people heavily involved with the world of tech. However, its unique foundations as a virtual currency system have also led to more traditional investors’ growing attention.

This means some of the biggest business minds in the world are trying to figure out if bitcoin is a good investment or not. That said, much like other assets, bitcoin investments need to be managed well – you can lose money on crypto just like on anything else, really – and a good understanding of the technology is also required to make sure you don’t end up losing your hard-earned money.

Can you get scammed through bitcoin?

Bitcoin is a form of currency, which means there’s no built-in safety valve against crooks and carelessness. Some of the more famous financial scam types have also been replicated in the world of bitcoin, but a keen-eyed investor can easily spot them all. If the promises are too good to be true, they are probably predicated upon lies.

A hardware wallet theft is merely stealing the physical container of the data containing your digital currency, which usually takes the form of USB drives. Sometimes these devices are sold in a compromised state with a backdoor, allowing hackers to remove funds at a future point. The solution here is to stick with sources you trust.

Indeed, many of the other potential bitcoin scams should be familiar to you from the world of traditional finance. Shoddy exchanges with no regulatory body behind them mean that investors need to be thorough in deciding where to acquire and trade their cryptocurrencies. At the same time, outright fake or simply poorly thought out initial coin offerings can also turn out to be a money sink for the careless.

Multilevel marketing strategies are facing a growing backlash in the “real” world. They can be just as problematic when underwritten by bitcoin – similarly, Ponzi schemes (also known as pyramid schemes) promising nonsensically high returns on investment have also burned many crypto investors. Due diligence and advance research will serve you well, just as they would in the case of other financial decisions.

Is bitcoin a good investment?

If everyone knew the answer to this question, it wouldn’t be – that’s the nature of investments in general. However, there’s a reason why even high-profile hedge fund managers and many technology enthusiasts have jumped on the hype train. Bitcoin’s valuation has been quite volatile to date. It is considered an uncorrelated asset (which means traditional stock markets have no bearing on how its prices change over time), making it a complicated investment choice. No doubt, it serves well as a counterbalancing part of a major stock portfolio. It is generally a good idea not to go all-in on any particular form of investment to begin with.

Despite bitcoin’s global, digital and decentralized nature, specific large-scale financial shifts in the real world will still impact and offer great benefits to savvy investors. For example, the devaluation of China’s currency and Korea’s domestic currency restriction policies allowed for great arbitrage opportunities. Meanwhile, less developed countries and those suffering from economic issues like hyperinflation are rapid adopters of this technology. Keeping up with considerations like this can be a real head-spinner and a source of great opportunities by the same token.

How to make money with bitcoin?

Mining bitcoin is the most straightforward (but nowadays really resource-intensive) way to generate your resources in the crypto scene and trading across the various exchanges – either by attempting to guess the changes in the overall valuation or fishing for arbitrage opportunities like the ones discussed above – is also a self-evident approach.

Better still, the number of fields and industries accepting bitcoin payments grow with every passing day, and the vendors and stakeholders already focused on an online environment are already open to this sort of adaptation and experimentation. This means that you will be able to cash out on crypto investments in a wide variety of ways as bitcoin is a safe way to pay nowadays on many different platforms, and there are many different ways to make money with bitcoin. Another option to get extra bucks with your bitcoin is crypto sports betting sites.

Final thoughts

That’s all you need to know about bitcoin as a newcomer to the crypto world and a modern technology enthusiast. I hope this post helped you figure out the ins and outs of whether bitcoin is a good investment and if you’ve got an excellent avenue to make money with it in your situation! Regardless of your ultimate decision, no doubt the bitcoin phenomenon is here to stay – and it will be one worth watching for the next few years even as the world returns to normal.

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