Looking at the Bitcoin craze around, you might be pondering over few important questions. Is it necessary to buy 1 Bitcoin? Can I buy fractions of the cryptocurrency or digital currency? Let’s dig into the answer to it.
What is Bitcoin?
In easy terms, Bitcoin is a decentralized digital currency that can be used for a bunch of actions such as a medium of exchange, store of value, etc. This currency works on blockchain technology which comprises a tamper-proof network that ensures the security of the asset.
Let’s understand Bitcoin with an example. Assume you have to buy a bar of chocolate. In order to get it, you’ll have to visit a store and purchase it in return for some money. The money could be paid in fiat currency (Rupee, Dollar, etc) or via an online bank transaction. In the present circumstance, you are dependent on a central authority which is the central bank of your country for your exchange. Without it, you won’t be capable of undertaking the transaction.
Similarly, Bitcoin is a digital currency that can be used as a medium of exchange to buy anything, for example, a bar of chocolate. You can purchase goods with Bitcoin or store it as an appreciating asset to get good returns in the future. Bitcoin runs on a Peer to Peer (P2P) network which means it’s completely decentralized and you don’t have to rely on any central authority.
How to buy Bitcoin?
As Bitcoin is a digital currency, it is intangible in nature. Hence, you can’t transact in it physically. Therefore to purchase Bitcoin, you will have to visit an online Cryptocurrency exchange and buy it there. You will also have to create an online cryptocurrency wallet to store your Bitcoins.
After this, you can merely add money to the wallet and purchase your desired number of Bitcoins.
Is it necessary to buy 1 Bitcoin?
Now that you know how and where to buy Bitcoins, the question remains is it necessary to buy 1 whole Bitcoin?
In short No! The price of 1 Bitcoin on 27th November 2021 is around 55,000 USD. At this price, not many investors would be able to afford 1 whole Bitcoin. But there’s no need to worry because unlike Indian equity shares Bitcoin can be bought in fractions. This means you don’t have to purchase a minimum of 1 Bitcoin. You can own as little as 0.00000001 BTC also referred to as Satoshi.
Let’s make it more clear!
In order to facilitate smaller transactions, Bitcoin can be divided into as small as one-millionth of a Bitcoin.
The smallest denomination of Bitcoin is “Satoshi”, which is named after its creator, Satoshi Nakamoto. To provide a perspective of the divisibility of Bitcoin, ‘1 Bitcoin contains 100,000,000 Satoshis. As a result, you can transact in Bitcoin with as low as 1 Satoshi.
Hence, from now, you don’t have to look at the price of Bitcoin and feel bad that you cannot afford 1 whole coin. You can simply place an order of a fraction of it and still be a Bitcoin/Cryptocurrency investor.