Mey Irtz - Bitcoin Guide for Beginners and Dummies

If you are going to adopt a buy and hold Bitcoin investment strategy then we suggest that you do the following:

Do not invest more than you can comfortably afford to lose. As we said earlier, Bitcoin is a high risk investment and this should be in your thoughts at all times.

When you have purchased Bitcoins don’t leave them in an exchange wallet. Get your own wallet and move them there. We will discuss the different types if cryptocurrency wallet and their advantages and disadvantages in a later chapter.

Use a reputable exchange to make your Bitcoin purchases. This may cost you a bit more but it is better to be safe than sorry.

Don’t purchase all of your Bitcoins in just one trade. Use the principle of Dollar cost averaging (DCA) and commit to purchasing a certain amount every month (or more frequently) throughout the course of the year. When you do this you pay average prices during the year.

As we said before this is where you buy Bitcoins at a low price and then sell them at a higher price to realize a profit. The time frame for these investments is short. We do not recommend that you start out with short term Bitcoin trading.

As you learn more about Bitcoin you can move to a shorter term trading strategy. It is certainly possible and there are some very large players in the Bitcoin market making profits regularly on short term Bitcoin trades. You need to learn how to trade properly to make this work which takes time and practice.

In order to make any kind of profit with Bitcoin mining you need to invest in a lot of high end computer equipment and get the cheapest electricity that you can find. And then there are no guarantees!

Mining has become a lot harder over the years. There are less and less Bitcoins to find and more and more people mining. It is just not a cost effective way to invest in Bitcoin in our opinion. Use the money you would spend on equipment and electricity to buy and hold Bitcoin instead.

You may have heard of cloud mining for Bitcoin. The idea here is that you pay for a service that will mine on your behalf using the web. In our experience these are either scams or so expensive an investment that you might as well just use the money to purchase your Bitcoins.

Have you seen websites that claim that they can double your Bitcoin holdings? Or maybe you have come across sites that claim they will pay you high levels of interest every day on your Bitcoins? We have one word for these kinds of websites:

SCAM!

There are lots of websites that offer high yield investment programs (HYIP) and almost all of these are scams too. What happens here is that these sites take money from people all round the Internet in exchange for high returns. They use the money that they get from new people signing up to pay high returns to the initial investors which creates a buzz.

Then guess what? A few months later the website simply disappears! Most people lose their money and they have no way to get it back. Don’t fall for these Ponzi scheme type scams. You cannot double the amount of Bitcoins that you have using these sites. It is more likely that you will lose all of your Bitcoins.

To be profitable with Bitcoin you have to know how it really works. So in this chapter we will explain everything that is involved including the underlying technology which is blockchain. We are not going to go into a lot of technical detail about blockchain so don’t worry. But you do need to understand the principles of it.

You connect to the Blockchain community using a computer network. This network has Bitcoin ledgers using blockchain. All Bitcoin transactions are compiled into blocks and then these blocks connect in a chain like formation. This is where the name blockchain comes from.

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