Earn interest on bitcoin
What happens if I lose my bitcoins?
As the bank does not interact in any way with such transactions, you are solely responsible for the safety of your savings. Some people prefer to store their cryptocurrency on exchanges, while others tend to use various wallets. If you prefer to use a wallet, you should make sure you write down your Sidphrase, so that you always have access to your wallet in case of an emergency.
Is it possible to undo a bitcoin transaction?
Once data has been added to the blockchain, it will not be easy to remove and delete it (in practice, this is almost impossible to implement). This means that once you make a transaction, it cannot be undone. You must always double or better still triple check that you are sending your funds to the correct address.
For an example of how a purely theoretical transaction can be reversed, see What is a 51% attack?
Can I make money on bitcoin?
You can make money from bitcoin as well as lose it. Most long-term investors buy and hold bitcoin, assuming it will appreciate in the future. Others prefer to actively trade it in pairs with other cryptocurrencies in order to profit in the short to medium term. Both of these strategies are quite risky, but they often happen to be more effective than low-risk approaches.
Some investors prefer to use a hybrid strategy. They hold bitcoins as a long-term investment while trading some trading pairs (in a separate portfolio) in the short term. There is no right or wrong way to allocate assets in your portfolio, as every investor has a different risk appetite and financial goals.
Lending is becoming an increasingly popular form of passive income. On the basis of lending your coins to someone else, you can earn a certain percentage that will go into your account. Platforms such as Binance Lending allow you to take advantage of this opportunity to earn bitcoin and other cryptocurrencies.
How do I store my bitcoins properly?
There are many options for storing coins, each with its own strengths and weaknesses.
Bitcoin storage on Binance
A custodial solution refers to this type of storage, where the user does not personally own the coins but entrusts it to a third party. In order to make transactions, one must first log in to the third-party platform. Exchanges such as Binance often use this model as it is much more efficient and convenient to trade.
Storing your coins on Binance allows for easy access to trades or lending.
Storing your coins on a bitcoin wallet
Non-restricted free movement solutions are the exact opposite of the previous type of storage, for the reason that they give the user control over their funds. For this type, you use what is called a wallet. A wallet is not where your coins are stored, these options only contain cryptographic keys that unlock access to the assets on the blockchain. There are two main types of wallets in total:
Hot wallets.
A hot wallet is software on your device, in the form of a mobile or desktop app, whose prerequisite is the constant need for an internet connection in order to easily send and receive coins. An easy-to-use mobile wallet that supports multiple coins is Trust Wallet. Since hot wallets function based on a constant internet connection, they are more convenient to use for sending various payments, but in turn such solutions are more vulnerable to hacker attacks.
Cold wallets
Cryptocurrency wallets that are not affected by the Internet are called cold wallets. They are much more resistant to hacking attacks, due to the lack of online attack vectors, but consequently tend to provide a less convenient user experience. An example would be hardware wallets or paper wallets.
What is bitcoin halving?
Bitcoin halving (sometimes referred to as bitcoin halving) is simply an event that reduces the reward per block. Once halving occurs, the reward that miners receive for validating new blocks is split in half (after halving, miners receive only half of what they used to receive). However, this does not affect the transaction fees.
How does it work?
When bitcoin was first launched, miners got 50 BTC for each block validation.
The first halving occurred on 28 November 2012. At that point, the protocol reduced the block subsidy from 50 BTC to 25 BTC. The second halving took place on 9 July 2016 (from 25 BTC to 12.5 BTC). The next one, due in May 2020, will reduce the award to 6.25 BTC.