For the general public, bitcoin is this virtual currency on which investors, a little geeks, try to make a fortune. But for its advocates, bitcoin is much more than a speculative asset. It is a technological revolution supposed to allow citizens to regain control over their currency.
While euros, dollars, or pounds are created by commercial banks when they make loans, under the indirect control of the Central Bank, bitcoin is not administered by a banking authority. Its issue, limited to 21 million bitcoins, is managed by a computer protocol, called blockchain, in which each cryptonaut is supposed to be able to participate. These “miners” have the role of confirming bitcoin transactions, recording them in “blocks” (hence the term blockchain) without being able to manipulate or falsify them. In exchange for this painstaking work or rather this battle of computer power, which concretely consists of being the first to find the correct associated code, they receive bitcoins.
However, you don’t need to “mine” to own bitcoins. Secondary markets, exchanges dedicated to crypto-assets, have sprung up to buy and resell bitcoins.
Bitcoin, An Unregulated Volatile Asset
Bitcoin is an unregulated, speculative, and highly volatile market. The value of bitcoin can fluctuate by 10% in a few hours. This extreme volatility comes from the fact that the price of cryptocurrencies depends only on supply and demand, with no economic underlying, which is not the case with traditional financial products. For example, company shares are shares of capital. There is a structure, there is a corporate purpose, employees, buildings, production… tangible things.
This is why a saver should only invest money that he does not need and that he is prepared to lose entirely. It is, therefore, more prudent to have precautionary savings in advance on a Livret A and other savings books before embarking on crypto. The common point between bitcoin and the stock market: if the value in euros of the portfolio falls, the loss becomes real only when the investor sells his assets. Hence the interest of having precautionary savings from which to draw if necessary and which will allow you to take the time to convert your bitcoins into euros at the right time. Another problem linked to this volatility is that it is difficult to identify the right time to invest. To smooth the entry point, it is best to invest gradually and in small amounts.
Bitcoin, like other cryptocurrencies (ether, XRP, etc.), is not regulated like the purchase of assets listed on the stock exchange. France, on the other hand, has a legal framework to allow individuals to identify trusted service providers. To offer services for the custody or purchase and sale of crypto assets against legal tender currencies (euro, dollar, etc. The AMF lists the digital asset service providers (PSAN) that have obtained its approval. To avoid any risk of scam, if the saver decides to buy bitcoin, he must go through these regulated intermediaries. On this page, we only reference licensed actors.
But, the “magic” of the net obliges, a French investor can completely use the services of actors who do not necessarily fall within the ambit of the regulations of the AMF. Signs that directly target the French public are affected by the PSAN status, but having a website in the language of Molière is not a sufficient criterion to determine whether a service provider is targeting France or not. It is this somewhat challenging subtlety that allows known players in the world of cryptocurrency to free themselves from registration, as explained in March 2021.
How To Securely Buy Bitcoin?
Bitcoin is not only obtained by “mining”. It is possible to buy bitcoin, after its issuance, on exchange platforms, sorts of Euronext (stock market) but for crypto-assets. Just like the euro, bitcoin is divisible into smaller units. He is even more so! These “bitcoin pennies” are called satoshis. 1 bitcoin = 100 million satoshis. Or 1 satoshi = 0.00000001 bitcoin. As 1 single bitcoin can be worth several thousand or even tens of thousands of euros, most people do not buy whole bitcoins (whose acronym is BTC) but satoshis (SATs).
The best-known crypto exchanges are called Kraken, Paymium or the American platform Coinbase. There are also intermediaries between these platforms and investors, sorts of brokers, brokers, even wealth advisers, who simplify the purchase and sale of bitcoins (and other cryptocurrencies). Among them, there is Coinhouse, Bitpanda or even StackinSat, which we quote here because they are registered. Depending on the number of transactions being processed on these platforms and the bank transfer time, the waiting time to actually receive bitcoin on your wallet can be several days.
In return for a subscription and/or a commission indexed to the amount bought and sold, these intermediaries deliver the desired quantity of cryptocurrencies to you as well as additional services: a mobile application and a customer area to monitor your portfolio, a to schedule the purchase of crypto-assets at regular intervals, the possibility of investing in standard allocations according to your risk profile, or even a secure wallet.
Read More About: What is Bitcoin?
How To Keep Your Bitcoins Safe?
Indeed, to secure but also to hold your bitcoins, it is necessary to have a digital wallet, a kind of safe, called a hokk wallet. Bitpanda and Coinhouse include one in their offer. On the other hand, StackinSat does not provide a wallet but advises its customers. StackinSat is thus a partner of Blockstream and its Green Wallet. Depending on the level of sophistication and security of these wallets, their price increases. This is why, for a beginner who wants to test the purchase of bitcoins for a few hundred euros, a free wallet in the form of a mobile application may be sufficient, such as the Green Wallet or Coinomi suggested by Coinhouse for neophytes. If the broker provides an internal vault, the client can also have their own external wallet.
If they present a high level of security, these applications remain software susceptible to being attacked by computer viruses. This is why, for investments of more than 1,000 euros, switching to a “hard wallet” payable , that is to say a physical tool that looks like a USB key, becomes interesting. The same name comes up systematically in the conversations of crypto lovers: Ledger, whose basic wallet costs 50$.