Do you need to buy a whole bitcoin?

SHARE
← Back to articles
SHARE

Do you need to buy a whole Bitcoin?

January 11, 2018 11:00 am Published by

If you didn’t get into Bitcoin in the early stages, it might seem like it’s too late now. Prices are soaring to intimidating levels and few of us have thousands of pounds sitting around to spend on a whole Bitcoin.

But the truth is, it doesn’t matter if you can’t afford a whole Bitcoin or even a tenth of a Bitcoin.

It is possible to buy as little as 0.00000001 (one hundred millionth) Bitcoin at a time – a unit known as a Satoshi after the elusive founder of the currency. At the time of writing, £1 will buy you over 9800 Satoshis and £100 buys nearly a million.

People have been saying it is too late to invest in Bitcoin since the price hit double digits. The best time to get involved was in 2009, the second best time is now.

Why is the price of Bitcoin getting so high?

It’s simple: the supply of Bitcoin is finite.

The founders decided there would only ever be 21 million Bitcoins available. Once those have all been mined, that’s it (unless the protocol gets changed.) As more people buy Bitcoin, the price rises and each person’s money buys a smaller amount. Back in 2010, the first Bitcoin transaction ever made occurred when Laszlo Hanyecz brought two pizzas for 10,000 BTC. While the same transaction would now cost a fraction of a single Bitcoin, you would still get two pizzas.

In this way, Bitcoin is more like gold than fiat currency. Nations can and do print more money. Gold, on the other hand, is finite – there’s only so much of it out there. But while we don’t know precisely how much gold is left, we do know how many Bitcoins are left. This means that, as long as new people are buying and using Bitcoin, the price will continue to rise.

It’s not that different to other investments

Investing is changing. We no longer need large amounts of money to get started. You don’t need to invest in a whole property or piece of artwork – new platforms are making it possible to buy a small percentage. Gold investors likewise don’t need to buy a whole bullion and can opt for an ounce or a coin.

Cryptocurrencies are much the same. It’s possible to only spend what you can afford and still reap the benefits.

What’s the point in buying a fraction of a Bitcoin?

It might not seem as if buying a fraction of a Bitcoin is worth the time and effort. However, there are two main reasons why purchasing even a single Satoshi is worth consideration:

  • It’s an ideal way to start learning about cryptocurrencies. Some crypto evangelists predict Bitcoin will become mainstream or even replace fiat currency. Countless people and companies around the world are investing a great deal of time and money into making that happen. Buying part of a Bitcoin is the perfect way to get used to using the technology, and to learn a bit more about how it works in case that does happen.
  • There is still the potential for financial gain. If you start with a small amount of Bitcoin, your losses are capped but the potential gains are theoretically unlimited. For example, some analysts predict the price of a Bitcoin could rise as high as £100,000. If that does happen, a £100 investment today will be worth over £1000. While no one can predict the future, that’s an enormous relative increase. Investing £100 means that’s the largest amount you could lose, but we have no idea what the gains could be.

What about altcoins?

Bitcoin isn’t the only cryptocurrency. There are well over a thousand competitors, most of them at a fraction of the price. That doesn’t mean they will necessarily experience dramatic price increases in the future though. It might seem more satisfying to buy 1000 altcoins than a fraction of a Bitcoin, even if the value is the same.

However, it’s not guaranteed that any altcoin will continue to rise in price and many are short-lived gimmicks (or outright scams). But with more than 1,300 alt-coins to choose from, it’s no easy task uncovering potential winners.

Before investing in anything, we recommend you do your own research to ensure you understand the vision, the utility and the practicality of what they are trying to achieve. Some quick suggestions:

  1. Study the team behind it
  2. Understand the why
  3. Determine where they are in the process
  4. Assess the valuation

With 9 years under its belt, and being the first of its kind, Bitcoin’s technology and infrastructure are further developed and it has a longer track record.

The verdict

If you’ve gained a little more confidence with your understanding of Bitcoin and you’re ready to get started with today, just remember there’s no need to save up for a whole Bitcoin. It’s perfectly possible to invest as little or as much as suits you.

Why 2FA security is vital for your Wirex account

We use passwords to access everything – social media accounts, emails, online banking. Not only can it be difficult to keep track of them all, it’s also difficult to create something that’s both memorable and complex. That’s why we recommend Two-Factor Authentication (2FA) as an extra layer of security. How will 2FA protect you? 2FA… View Article

Is Bitcoin going to rise again?

There’s no question – Bitcoin’s been on an epic rollercoaster ride of late with the latest market figures valuing it at a mere $7,417 compared to the $19,343 highs of December 2017. But it’s not the only cryptocurrency that’s suffered, with Ethereum and Ripple both experiencing similar drops – so is it the end for the newest… View Article

Dear parents, here’s what you need to know about Bitcoin

If your kids have been through their teens (or are going through them now), you’re probably used to unpredictable behavior. Sudden mood swings, confidence highs and lows, a rebellious nature. Should that sound familiar, you already understand the nature of Bitcoin. Bitcoin acts a bit like a teenager. Volatile and fickle, Bitcoin has been through… View Article

What is the true value of cryptocurrency?

You can’t see me, or touch me but I can be mined. What am I? Answer – a cryptocurrency (of course). Money that you can’t hold, or really see and only truly exists in cyberspace – a case of the emperor’s new clothes perhaps? After all, surely something only exists because it’s tangible, right? So…if… View Article