Some things you need to know
If you are about to explore Bitcoin, there are a
few things you should know. Bitcoin lets you exchange money in a
different way than with usual banks. As such, you should take time to
inform yourself before using Bitcoin for any serious transaction.
Bitcoin should be treated with the same care as your regular wallet, or
even more in some cases!
Securing your wallet
Like in real life, your wallet must be secured. Bitcoin makes it
possible to transfer value anywhere in a very easy way and it allows you
to be in control of your money. Such great features also come with
great security concerns. At the same time, Bitcoin can provide very high
levels of security if used correctly. Always remember that it is your
responsibility to adopt good practices in order to protect your money. Read more about securing your wallet.
Bitcoin price is volatile
The price of a bitcoin can unpredictably increase or decrease over a
short period of time due to its young economy, novel nature, and
sometimes illiquid markets. Consequently, keeping your savings with
Bitcoin is not recommended at this point. Bitcoin should be seen like a
high risk asset, and you should never store money that you cannot afford
to lose with Bitcoin. If you receive payments with Bitcoin, many
service providers can convert them to your local currency.
Bitcoin payments are irreversible
Any transaction issued with Bitcoin cannot be reversed, they can only
be refunded by the person receiving the funds. That means you should
take care to do business with people and organizations you know and
trust, or who have an established reputation. For their part, businesses
need to keep control of the payment requests they are displaying to
their customers. Bitcoin can detect typos and usually won't let you send
money to an invalid address by mistake. Additional services might exist
in the future to provide more choice and protection for the consumer.
Bitcoin is not anonymous
Some effort is required to protect your privacy with Bitcoin. All
Bitcoin transactions are stored publicly and permanently on the network,
which means anyone can see the balance and transactions of any Bitcoin
address. However, the identity of the user behind an address remains
unknown until information is revealed during a purchase or in other
circumstances. This is one reason why Bitcoin addresses should only be
used once. Always remember that it is your responsibility to adopt good
practices in order to protect your privacy. Read more about protecting your privacy.
Unconfirmed transactions aren't secure
Transactions don't start out as irreversible. Instead, they get a confirmation
score that indicates how hard it is to reverse them (see table). Each
confirmation takes between a few seconds and 90 minutes, with 10 minutes
being the average. If the transaction pays too low a fee or is
otherwise atypical, getting the first confirmation can take much longer.
Confirmations
Lightweight wallets
Bitcoin Core
0
Only safe if you trust the person paying you
1
Somewhat reliable
Mostly reliable
3
Mostly reliable
Highly reliable
6
Minimum recommendation for high-value bitcoin transfers
30
Recommendation during emergencies to allow human intervention
Bitcoin is still experimental
Bitcoin is an experimental new currency that is in active
development. Each improvement makes Bitcoin more appealing but also
reveals new challenges as Bitcoin adoption grows. During these growing
pains you might encounter increased fees, slower confirmations, or even
more severe issues. Be prepared for problems and consult a technical
expert before making any major investments, but keep in mind that nobody
can predict Bitcoin's future.
Government taxes and regulations
Bitcoin is not an official currency. That said, most jurisdictions
still require you to pay income, sales, payroll, and capital gains taxes
on anything that has value, including bitcoins. It is your
responsibility to ensure that you adhere to tax and other legal or regulatory mandates issued by your government and/or local municipalities.
Thank you!