You may have heard about Bitcoin from a friend, family member or even on the news. It’s one of the most talked-about asset classes of the 21st century. As I’m known as ‘the bitcoin guy‘ in my circles, one of the most frequent questions I’m asked when the topic comes up is; “Can I buy a fraction of a Bitcoin?“.
Yes; you can most definitely buy a fraction of a Bitcoin. This means that you don’t have to shell out thousands to invest in Bitcoin. You can buy as little as 1 satoshi, which is worth fractions of a cent.
To learn more about buying a fraction of a Bitcoin, read on.
Bitcoin’s structure
Every 1 Bitcoin is made up of 100,000,000 smaller fractions called ‘Satoshis‘ – named after the anonymous creator of the digital currency; Satoshi Nakamoto.
Most people don’t transact in Satoshis since they are too small of a fraction.
Most of the time, people refer to fractions of Bitcoins as 0.1, 0.005 etc.
For example; ‘Hey, I just bought 0.1 BTC – when can I retire?‘
How to buy a fraction of a Bitcoin
Most cryptocurrency exchanges let you buy a fraction of a Bitcoin. All you have to do is register for one of the exchanges, enter your payment details and then buy your preferred amount of Bitcoin in fiat currency values (USD, EUR, GBP etc.).
Earn fractions of Bitcoin
If you want to get your hands on some Bitcoin, buying it isn’t the only option. You can also earn free Bitcoin in a few different ways. Here are some examples of ways in which you can earn fractions of Bitcoins;
- Freelance – if you’ve got a skill, you could offer it to the crypto community and get paid in Bitcoin (e.g designing logos or websites)
- Referral – a lot of products and services in the crypto world offer referral bonuses for inviting friends/other people to join – the best one for this, in my opinion, is the crypto.com referral program (you get $50 free crypto for each person you refer)
- Affiliate – for the professionals, using cryptocurrency affiliate programs to earn fractions of Bitcoin can be extremely profitable.
Buying Fractions vs 1 Whole Bitcoin
You’ll probably know by now that 1 Bitcoin is worth thousands of dollars. But should you buy one right now, or buy fractions over time? This is a hot debate in the industry. Many people believe that it is better to just buy a Bitcoin and forget about it for years whereas others think that buying fractions frequently is better since you can get a better average price.
The truth is that there isn’t a right or wrong way – each method suits people differently.
If you don’t have the cash to hand for a whole one, then it is apparent that buying fractions of a Bitcoin every now and then is the best way of investing in Bitcoin.
Buying fractions over time is called ‘dollar cost averaging‘ – it essentially means that you get a broader average price due to buying lots of bits at different prices.
Coinbase makes it easy for you to buy fractions frequently with their automatic purchases. This lets you set it up so that every week or so, it buys a set amount of Bitcoin for you – without you even having to log in. If I were just getting started, this is probably what I would do as it lets you invest without really noticing (depending on how much you decide to invest frequently).
If you have enough money to buy 1 Bitcoin right now, then there is nothing stopping you. Just be prepared and know that you may lose some money due to the volatile nature of Bitcoin.
Basically, just suit the investing strategy that fits you best.
How much Bitcoin will you need to be wealthy?
The age-old question. In all honesty, the answer is that nobody knows. It all depends on how popular Bitcoin becomes over the years. The good thing about Bitcoin is that it is limited, there will only ever be 21 million Bitcoins, so the supply is fixed. Now if the demand for the world’s biggest cryptocurrency increases, then even a fraction of a Bitcoin could be worth a fortune in the future.