Bitcoin is more than ever in the news today. Thanks to skyrocketing prices and roller coasters, everyone and their dogs are interested in learning to buy and sell Bitcoin. As the most popular form of cryptocurrency ( and the blockchain technology that drives it), Bitcoin is now globally accepted and has a growing number of applications. But before you can comment on that, you must first know where to buy and store it.
There are a few steps you need to take to make your first purchase, but if you are ready to follow, we will teach you how to buy Bitcoin in no time.
Although every step deserves some attention, these are the most important points to keep in mind when making your first Bitcoin purchase:
- Install an offline Bitcoin wallet and set a strong password to protect it.
- Create an account on Coinbase (and its trading platform, Coinbase Pro, if you want additional checking).
- Choose your preferred payment method.
- Buy some Bitcoin!
: Find a good Bitcoin wallet
Digital "wallets" are used to store Bitcoin until you are ready to spend or exchange them for another currencies. Portfolios vary in terms of functions, platforms on which they can be used and security, so it is important to choose one that works for you – probably not the one developed by John McAfee.
To help you on your way, your best bet is to use the wallet that is automatically provided to you at our recommended purse, Coinbase. However, it is also a good idea to set up a wallet that is not linked to an exchange, because that way, if the exchange ever goes down or is rammed by traffic, you still have access to your Bitcoin.
Here are our recommended options:
Exodus An all-in-one offline application with support for a number of cryptocurrencies, including Bitcoin, Exodus is free to use, has built-in form-shift trading and some simple graphical tools to help you visualize your cryptocurrency portfolio.
Mycelium is a popular mobile wallet that is known to be compatible with more advanced technology, such as Trezor hardware wallets (for maximum security) and Tor.
For a look at a few other of our favorite wallets, here is a more in-depth guide to the best Bitcoin wallets.
Note: Although an online wallet is great for your first Bitcoin purchase, if you find you have a lot of valuable cryptocurrency because of the trade or a revival in value, make sure you save it in an offline "cold storage" "wallet for maximum protection.
Step 2: Choose the right Bitcoin dealer
The best place to make your first Bitcoin purchase is at a trade show. There are a lot of exchanges out there with different achievements. Some are less reliable than others and some can be quite limited, so it's important to choose the right exchange to start with. We recommend the use of Coinbase, but it is no harm to monitor the competition using a Bitcoin exchange comparison site.
Signing up for a Coinbase account is easy, although you must provide some form of identification. This may include sending a copy of your photo ID and possibly also a live image of your face using a webcam. These rules are important to follow because they ensure that the site (s) meet the & # 39; know-your-customer & # 39; requirements.
Although Coinbase only allows you to buy and sell Bitcoin, it is also worth registering at the linked exchange platform, Coinbase Pro, which gives you more control over your purchases.
If you prefer to take a more direct route when buying Bitcoin, you can choose to use a peer-to-peer service, such as LocalBitcoin or BitQuick. They offer a wider range of payment options and allow you to buy Bitcoin directly from a seller without the intermediary. If you choose to use it and plan to act personally, make sure you meet in a safe place.
Step 3: Select your payment method
Exchanges accept different payment options based on what they want to use. This is a kind of embarrassing point for many stock exchanges, because some payment methods have been used in the past to scam sellers. Coinbase allows both bank and credit or debit card transfers for payments and one payment solution must be linked to your account before you can trade. Paypal is not supported by Coinbase and with good reason.
Note: With Bitcoin ATM & # 39; s you can exchange Bitcoin in compatible wallets for cash. These ATMs are available in a limited number of cities, but do offer an alternative to withdrawing money through an exchange. Again, most stock exchanges and online wallets will not handle cash immediately.
Step 4: Buy some Bitcoin and keep it in your wallet
Exchanges give you information about how much (or how much of a) Bitcoin you can buy for specific amounts. However, due to the volatile nature, the Bitcoin prices can vary considerably per exchange and from moment to moment. That means that even if you have a lot of money to burn, you probably buy a fraction of a Bitcoin. There is nothing wrong with that and for most people the route they will follow is so little, but the rich can afford more.
To make your first exchange, enter the amount of Bitcoin that you want to buy in the appropriate field and click the buy button. On Coinbase or Coinbase Pro this will be a standard "market" purchase order, which Bitcoin will buy at the best market rate. Alternatively, you can place a "limit" order that allows you to set a price that you are willing to pay for a certain amount and a transaction will only take place if that amount appears at that price.
Once you have made your purchase, your new Bitcoin is stored in your Coinbase wallet. You should then look for the option to transfer these funds to the address of the Bitcoin wallet that you have created that is not listed on the stock exchange. You will have to pay a small fee for this, but that is part of Bitcoin transfers. Fortunately, the costs for such transactions are far from their peak.
Important Note: Bitcoin transfers can be a little sporadic. Unlike other currency transactions, when you buy Bitcoin funds. the transaction must be recorded in the blockchain and confirmed. This can take time, especially during busy trading hours. It's not uncommon for a transaction to take an hour or two to complete, so you may not want to jump into your account right away and start moving money.
Step 5: Get ready to use it