7 Questions to get you started with Bitcoin

Region: Europe
Jan 3, 2024, 12:04:29 PM Published By Wirex Team

Happy birthday, Bitcoin! If you're curious about what this digital currency is all about but feeling a bit overwhelmed, fear not. We've got seven questions to ease you into it. 

1. What is Bitcoin? 

Bitcoin is a decentralised cryptocurrency. It was created in 2009 by an unknown person or group of people using the pseudonym Satoshi Nakamoto. Bitcoin operates on a technology called blockchain, which is a distributed ledger that records all transactions across a network of computers. 

2. What is a Bitcoin wallet, and how do I choose one?  

A Bitcoin wallet is essential for storing, sending, and receiving your digital currency. There are different types of wallets, each with its own set of advantages and considerations. Wallets can be hardware-based, software-based, or even exist as online services. Research thoroughly and choose a wallet that aligns with your security preferences and usage patterns. 

3. How is Bitcoin taxed, and what are the regulatory considerations?  

Taxation and regulatory frameworks for Bitcoin vary by jurisdiction. It's crucial to be aware of the tax implications of buying, selling, or using Bitcoin in your country. Research the regulatory landscape, reporting requirements, and potential capital gains taxes associated with cryptocurrency transactions to ensure compliance with local laws. 

4. What can I do with it?

You can buy it, sell it and spend it. More and more places are accepting Bitcoin as payment. If you get yourself a Wirex card, you can transfer your Bitcoin into whatever currency (pounds, dollars, euros) you need when making a payment. The Wirex card can then be used anywhere Visa and Mastercard are accepted (both online and offline). 

5. What factors influence the price of Bitcoin?  

Bitcoin's price is influenced by various factors, including market demand, regulatory developments, macroeconomic trends, and technological advancements. Stay informed about these factors to make informed decisions when buying or selling Bitcoin. Keep in mind that the cryptocurrency market can be volatile, and prices can experience significant fluctuations. 

6. What are the risks associated with Bitcoin?  

While Bitcoin presents exciting opportunities, it's essential to be aware of potential risks. Regulatory changes, security breaches, and market volatility are inherent risks in the cryptocurrency space. Stay updated on industry news, and only invest what you can afford to lose to mitigate potential risks. 

7. So how do I get started? 

To hold any Bitcoin that you buy, you're going to need a Bitcoin wallet. You want to make sure it is easy to use and most importantly secure. There are plenty of options out there, but we've made it simple to get started. With a Wirex account, you'll be able to buy, store, exchange, and spend Bitcoin safely, instantly, and securely. All you need is to download the Wirex app and register. 

Have any other questions you need answering? Feel free to reach out to our customer support