How to Buy Bitcoin in 4 Guided Steps
Understanding What Bitcoin is and How to go About It
Before you invest your money in Bitcoin, it’s wise to do some research and know what you are getting into. Bitcoin (BTC), is the first digital currency and was founded in 2009. It is a kind of virtual cash that is kept in digital wallets and operates under the technology referred to as Blockchain. This is a database that is not controlled by a single authority such as a bank or the government but is installed across numerous computer networks.
Benefits of Using Bitcoin:
- Reduced Transaction Costs: Cost per transaction is usually low as banks and governments are not involved as middlemen.
- Anonymity: Unlike credit card companies or banks, users of bitcoins don’t have to disclose any information associated with their transactions; however, such transactions may be retraced.
- Convenience: Anyone who has a phone and the internet can take advantage of this new currency and make money. People who are not prone to banking and live on borrowed money therefore don’t have financial restrictions.
Some individuals use Bitcoin solely for trading purposes, while other people buy them in order to use them for payments.
What Are the Risks of Buying Bitcoin?
Investing in Bitcoin is no different than any other venture because it has its risks, however, there are risks that are common only in case of cryptocurrencies. The most pronounced risk is that associated with the volatility of Bitcoin. For instance, a feb21 bitcoin was worth 57,128.64 usd; after just the end of that week, these figures sunk to 45092.81, to then go over the peak of 60000 just after two weeks. Such dramatic price swings are decidedly not for the faint of heart, and whether the proverbial bubble is about to burst in a more violent way than it already did or not, is still debatable.
Another such risk entails the lack of social support or protections that most other investment options are accompanied with. There is no insurance or any other guarantee regarding loss of funds for any incident suffered by the user. Another thing is safety. If you do not take proper measures, your accounts can be hacked and lose the Naval Token. Apparently, the popularity of Bitcoin came as a consequence of people’s avariciousness as the number of such scams on the market has increased as well, which makes it necessary to limit these aggressive instruments and to mitigate the risk of this potential investment return.
How to Buy Bitcoin: Step-by-Step Guide
Now that you are informed about the risks, this is how to buy Bitcoin safely in 4 simple steps.
- Do Your Research
Your first step is to decide where to buy Bitcoin. There are different places where you can do this:
- Cryptocurrency Exchanges: These are online platforms that let you exchange, for example, conventional cash, to virtual currencies—or the other way around.
- Traditional Brokers: Some investment brokers are known to provide the purchase of cryptocurrency through their trading platforms.
- Bitcoin ATMs: These let people who do not have a bitcoin account to buy bitcoins instantly and with cash.
- Peer-to-Peer Exchanges: If you want to buy bitcoin at competitive rates, then you could engage in PC to person exchanges straight from people which is termed as P2P.
Too many people decide to buy cryptocurrency for the first time off the exchanges as it is the simplest and the fastest way for them. But that is not really the best way. Most exchanges, such as Coinbase, Kraken, Gemini, are safest for the beginners. When choosing the exact exchange, pay attention to:
- Availability of insurance
- Geographical coverage of the services
- Commission and minimum terms
- Possibility to make deposits from the bank account
- Accepted currencies
- Safety measures
Then you select the chosen exchange and get through the signup procedure.
- Set Up and Fund Your Account
Opening an account is a nondescript process. When you reach out to the site’s landing page you will see the tab labeled as “Get Started”. You will be asked to carry out a know-your-customer (KYC) check; this could mean presenting documents like ID, SSN or Address Proof. Once verified, attach a payment method, and deposit your balance with the trading platform with bank wires, credit/debit cards, wires or PayPal. You should note that different options might have different charges.
- Determine the Location of Your Bitcoin
You can always store your Bitcoin on the exchange; however, it is preferable to do so in a digital wallet. There are two kinds of wallets: the hot one and the cold one.
Hot Wallets: These are storage options on mobile phones or computers connected to the internet, therefore they are easily accessible for trading purposes, however, the threat of internet hacking exists.
Cold Wallets: Also referred to as hardware wallets, these are portable devices that keep your keys physically away from your computer, therefore are ideal for long-term storage but not ideal in terms of convenience for day-to-day trading.
For those that would wish to trade very often, a hot wallet can be used for operational funds but for the money that is to remain in the casino, a cold wallet can be utilized. If the intention is to buy and hold, investing in a cold wallet is more than enough.
- Make Your Bitcoin Purchase
At last, you will be able to carry out the purchase. The process may essentially be the same but there are minor changes depending on the exchange you are dealing with, and they will include the following steps:
- Open the app and sign in.
- Select the cryptocurrency you wish to buy (BTC).
- Specify the amount you want to buy.
- Choose your payment method.
- Finally check and submit your order.
Well done! At this stage, we assume that you have purchased Bitcoin.
How to Play Less Nightmares in Bitcoin
It is one thing to understand how to buy Bitcoin and another to know how to do that safely. Here are a number of safety tips:
- Invest only what you can afford to lose: The future of bitcoin is not certain, therefore, one should only lose.
- Know how to buy: Do not buy bitcoins just for the sake of it since it’s the trend. Research properly, crosscheck this with numerous credible resources, and make sure that you comprehend what you are investing in.
- Avoid all forms of oversharing: Use creative and complex passwords, use 2FA, and get a hardware wallet for your bitcoins. Store some of your private keys in secure sites where you can use them in case you need to recover your funds.
- Stay organized: Be aware that the task of making money using cryptocurrency will help avoid paying taxes on it. Always keep track of each transaction done, even those that involve spending bitcoins for the purpose of computing gains or losses made for capital gains and use.
With these steps and precautions, you may now comfortably cross over to the world of making investments in bitcoin.
