How to Buy Bitcoin (BTC)

Fixed Supply of BTC

One of the most significant factors contributing to Bitcoin’s value is its rarity, owing to the fixed supply. At the launch, its creators announced that only 21 million BTC would be minted or generated.

Decentralization Makes Bitcoin Appealing For Users

As the popularity of decentralized cryptocurrency and its trading volume soar, there is increasing demand for Bitcoin among both retail and institutional investors. The price of Bitcoin enjoys support from an uptick in demand.

BTC's Large Market Cap Makes it Most Valuable Cryptocurrency

In addition, BTC's fixed max supply and reputation as the original cryptocurrency with the largest market capitalization makes it an attractive store of value, which further supports the Bitcoin live price.

Uptick in Crypto Adoption Further Boosts BTC Value

The rising interest among large and small investors in BTC and other digital assets has also increased its value in recent months. The increasing number of use cases for cryptocurrencies has made this asset class more attractive to invest in. As Bitcoin remains the leader of the pack, almost all investors vie to hold at least some portion of their portfolio.

Bitcoin a Hedge Against Inflation

Since the start of the COVID-19 pandemic, the level of uncertainty in global financial markets has been extremely high. Several investors consider Bitcoin a hedge against inflation, giving it the moniker ‘digital gold’ in the financial market. Amid monetary easing by central banks, volatility in equity markets, and gold becoming more expensive, many investors turned to Bitcoin for its high returns.

The process of creating new Bitcoins is known as mining. It involves using mining rigs and computers with high processing capabilities to solve complex mathematical puzzles. Bitcoin mining is an essential process that validates all transactions within the blockchain and records them in new blocks.

Bitcoin miners solve the puzzles to verify transactions, mint new BTC and increase its circulating supply. Miners receive a portion of new Bitcoins minted as block rewards for their crypto mining efforts. The new BTC coins increase the supply of the crypto in the market, but with the total supply being fixed and demand remaining strong, the mining of coins has little impact on the BTC price.

KuCoin offers a convenient way to mine Bitcoin via its KuCoin Pool. Use this service to contribute your computing resources to empower the mining hashrate and experience low mining costs for Bitcoin mining.

Even as the demand for Bitcoin rises worldwide, there are growing concerns about the energy consumed in mining Bitcoins and keeping its blockchain running. According to estimates by the Cambridge Center for Alternative Finance (CCAF), the Bitcoin network's energy consumption stands at around 110 Terawatt Hours per year, which is about 0.55% of all the electricity produced worldwide. To put it in perspective, this amount of energy could power a small nation for an entire year.

The Bitcoin network utilizes a proof of work consensus mechanism to validate transactions, requiring mining rigs with high computational power and energy. These Bitcoin mining rigs are essential to maintain a record of all transactions on BTC’s blockchain.

However, Bitcoin has an advantage against other industries as miners can utilize all kinds of power sources to power their rigs, which may not be accessible to the traditional financial sector. Harnessing cleaner energy sources could be a possible solution to Bitcoin's energy consumption problem.

Bitcoin enjoys superior security as it was devised keeping this factor in mind, and its blockchain has never suffered an outage or attack. Theoretically, there are ways to hack the Bitcoin protocol, although mounting such attacks can be costly in terms of time and effort.

Your Bitcoin holdings are vulnerable to hacks and attacks when stored in digital wallets or exchanges. As more investors enter the crypto market, its attractiveness as a target among cyber criminals continues to grow.

Since 2020, there has been an exponential increase in frauds and cybercrimes related to stealing Bitcoins and other cryptocurrencies from users’ wallets and decentralized applications (dApps).

We recommend that you select a reputed crypto exchange or broker to buy Bitcoin and store them securely in an effective crypto wallet. Custodial wallets where you control the private keys to your BTC are recommended if you want an additional layer of security for your Bitcoin.

There are several ways to invest in BTC; the most popular option is buying and holding Bitcoin. You profit as long as the BTC value keeps rising but stand to lose in case the market crashes, in which case you can sell Bitcoin in the market. You can also earn passive income on your holdings by lending BTC to grow your capital conveniently.

KuCoin offers several avenues to invest in Bitcoin, including Spot Trading, Margin Trading, and Futures Trading. You also have the option to lend BTC via KuCoin Earn.

Another attractive option is investing in a Bitcoin ETF. Several financial firms have started offering this investment product to let you invest in futures contracts for Bitcoin. BTC ETFs are available for trading on stock exchanges.

Some firms such as Grayscale offer exposure to Bitcoin via investment trusts, a reliable option for large investors. The Grayscale Bitcoin Trust, for instance, is a publicly traded fund that lets you buy GBTC shares. Remember that they trade at a premium and can be more expensive to invest in than buying BTC directly on an exchange.

Bitcoin’s popularity has made it an acceptable payment method among several businesses. In addition to using it to trade cryptocurrencies on exchanges, BTC's Lightning Network can be used to pay for goods and services online and in some offline businesses.

BTC can be used in place of money to make purchases on online retailers, book holidays on travel websites, buy online services, pay for food at some eateries or order food online, and more. In addition, third-party services allow you to place orders on Amazon using Bitcoin.

While Tesla CEO Elon Musk no longer accepts Bitcoin as a payment method, car dealerships in the US allow customers to buy cars, even luxury cars, using BTC. There are also increasing instances of real estate sales taking place with Bitcoin as a payment option.