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Similar to how we would not say cars are volatile if large price swings for cars happen often, we shouldn't say Bitcoin is volatile because its price is volatile. It's important to distinguish between the underlying technology that is Bitcoin, and the price of the tradable currency unit within this network. The currency units may fluctuate often and greatly in price, but the Bitcoin technology itself is not volatile because of this. Additionally, I've used the lowercase "bitcoin" when talking about the currency *unit* rather than the "Bitcoin" technology/network.
38 lines
4.6 KiB
HTML
38 lines
4.6 KiB
HTML
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layout: base-en
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title: Some things you need to know - Bitcoin
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---
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<h1>Some things you need to know</h1>
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<p>If you are about to explore Bitcoin, there are a few things you should know. Bitcoin does not let you send emails or take pictures; it lets you exchange money and value. As such, Bitcoin must be treated with the same care as your regular wallet, or even more in some cases!</p>
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<h2><img src="/img/ico_key.svg" alt="Security" />Securing your wallet</h2>
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<p>Like in real life, your wallet must be secured. Always remember that it is your responsibility to adopt good practices in order to protect your money. Here are some options you should consider.</p>
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<div class="box">
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<h3>Backup your wallet</h3>
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<p>Bitcoin services and software allow you to backup your wallet, which can be printed on paper or saved to a USB drive. Stored in a safe place, a backup can protect you against computer failure and many human mistakes.</p>
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<h3>Encrypt your wallet</h3>
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<p>Encrypting your wallet allows you to set a password for anyone trying to withdraw any funds. This helps protect against thieves and hackers, though it cannot protect against keylogging hardware or software. However, you should make sure you never forget the password or your funds will be permanently lost. Unlike your bank, there are no password recovery options with Bitcoin!</p>
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<h3>Be careful with online wallets</h3>
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<p>Using an online wallet is pretty much like using an online bank. You are trusting someone else to protect your money while you have to remember and protect your password. You should always choose such services carefully. As of today, no online wallet provides enough insurance and security to be used to store value like a bank.</p>
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<h3>Use an offline backup for savings</h3>
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<p>An offline backup of a wallet provides the highest level of security for savings. It involves storing a wallet only on paper and on usb keys in different secured locations that are not connected to the network. This is a good protection against computer failures, computer vulnerabilities, theft and human mistakes. As of today, this approach still requires some technical knowledge to be done correctly.</p>
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</div>
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<h2><img src="/img/ico_market.svg" alt="Volatile" />Bitcoin price is volatile</h2>
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<p>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 in bitcoin is not recommended. Bitcoin should be considered as 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 allow you to convert them instantly to your local currency.</p>
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<h2><img src="/img/ico_irreversible.svg" alt="Irreversible" />Bitcoin payments are irreversible</h2>
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<p>Any transaction you issue with Bitcoin cannot be reversed. It can only be refunded by the person receiving the funds. That means you should take care to do business with people or organizations you know and trust. But don't worry, Bitcoin can detect typos and usually won't let you send money to an invalid address.</p>
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<h2><img src="/img/ico_anon.svg" alt="Anonymous" />Bitcoin is not anonymous without efforts</h2>
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<p>All Bitcoin transactions are stored publicly and permanently on the network, which means anybody can see the balance and the transactions of any Bitcoin address. However, it is not possible to associate a Bitcoin address with its physical owner unless the owner demonstrated that they own it. This is why it is recommended to use many different Bitcoin addresses; in fact, you should create a new one each time you receive money. This is especially important for public uses such as websites. You might also want to consider hiding your computer's IP address with a tool like <a href="https://www.torproject.org/">Tor</a> so that it cannot be logged by others.</p>
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<h2><img src="/img/ico_lab.svg" alt="Experimental" />Bitcoin is still experimental</h2>
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<p>Bitcoin is an experimental new currency that is in active development. Although it becomes less and less experimental as usage grows, you should keep in mind that Bitcoin is a new invention that is exploring ideas that have never been attempted before. As such, its future cannot be predicted by anyone.</p>
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<h2><img src="/img/ico_invoice.svg" alt="Taxes" />Don't forget to pay your taxes</h2>
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<p>Bitcoin is not an official currency. That said, most jurisdictions still require you to pay income, sales, and payroll taxes on anything that has value, including Bitcoin. It is your responsibility to inform yourself about and comply with any applicable laws.</p>
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