The subject of Bitcoin adoption has always been controversial as some dislike the decentralized nature of the Blockchain network and the lack of the traditional financial system and regulations. On the other hand, a large community of Bitcoin lovers loves everything about it, especially the potential for profitable returns.
No matter what side of the divide you are on, you can agree that the profitability and popularity of Bitcoin are undeniable. When this currency was first listed in the market in 2008, its price was pegged at $0.0008, but today, it has a value of almost $30,000.
If you are a Bitcoin enthusiast and would love to learn how to purchase it, you’ve come to the right place, as you will find easy-to-follow information in this article.
Investing In Bitcoin
Whether putting your money into Bitcoin is a plausible decision has no accurate answer. Bitcoin has become infamous for being unstable due to several factors, so although there is a massive chance for you to cash out big time from it, you still risk losing your money. Therefore you are advised only to invest an amount of money you’re prepared to lose should things go the other way. This should be the most influential factor in choosing how much you’re willing to invest.
Be informed that Bitcoin has no centralized authority or a financial institution that regulates its stability and flow. Recently, its adoption rate is just being built – this is a paramount standard for any currency. Unlike other fiat currencies, Bitcoin has just begun to gain acceptance globally.
As already mentioned, there are frequently sharp declines and jumps in Bitcoin’s value, making it highly unstable. This is caused by the limited supply of the currency and the fact that few people (Whales) have a massive chunk of it. So they can easily manipulate the market to make a profit.
For example, if a significant amount of Bitcoin is sold, its value can quickly drop. Additionally, Bitcoin currently has a liquidity problem. According to some experts, one major problem Bitcoin faces is that it has become an opportunity for investments rather than a means of exchange. Bitcoin trading has become more for profits than transactions. Yet, investing in Bitcoin is becoming common because of the rapid increase in its adoption and value.
Years ago, investing in Bitcoin was highly risky, but much of that has changed.
Bitcoin also presents an incredible opportunity for gamblers for online payments. Due to its encryption, Bitcoin transactions are recorded with confidentiality and safety. Transactions take no more than ten minutes and are fast. Also, you don’t need to pay charges to the bank, but you will need to pay the miners a token. It is also possible for the exchange platform to charge a certain percentage during transactions.
How Safe Is Bitcoin?
One of Bitcoin’s most significant advantages is that transactions are private and safe, and Bitcoin can be safely purchased without revealing one’s identity.
While transactions are made confidential, anonymity is not absolute. The Bitcoin Blockchain can be likened to a publicly distributed ledger showcasing all transactions. The public keys of those in the transaction are displayed next to the transaction. However, no information revealing the identity of the sender or receiver is required or indicated.
It may puzzle you to know that if a skilled cyber-criminal steals your digital assets, it will be challenging to get the person, although you can track the transaction. This is impossible due to the tamper-proof design of Bitcoin’s system. All nodes execute the authentication of each transaction on the Blockchain, and this makes external change impossible. Bitcoin is the best option for a quick, safe, and anonymous way to execute transactions.
Steps To Buying Bitcoin – A Guide
Below are the steps required for you to purchase Bitcoin.
- Create a personal wallet.
- Get in touch with an authentic crypto exchange.
- Select a preferred method of payment.
- Purchase your Bitcoin.
Step 1: Have a personal wallet created
The Bitcoin Wallet is an encrypted application to store your Bitcoin and track transactions on the blockchain network. Owning a personal crypto wallet should be your first step to acquiring this digital asset. It is essential to emphasize the word “Personal” as several centralized exchanges create wallets for users. Still, the problem with using them is that you may lose your Bitcoin whenever the business ceases to exist.
Centralized exchanges should only be used as intermediaries because the security of your funds depends on the exchange’s general safety. So, as much as you would love to trade on exchanges, you should frequently try to move your Bitcoin to a personal wallet so that if the exchange platform becomes compromised, you won’t lose your funds.
Before discussing how to purchase Bitcoins and deeply analyzing how to select crypto wallets, you should familiarize yourself with the differences between Hot and Cold Bitcoin wallets.
Hot wallets use internet access devices like computers, tablets, or smartphones. Exploring online transactions easily is the primary purpose of storing Bitcoin in a hot wallet. Thus, it is essential to make a trade. Like any device that requires an internet connection, using hot wallets comes with a degree of risk.
To access your Bitcoin, Hot wallets provide private keys. Thus, if the device becomes endangered, a person may obtain unlawful access to your digital assets. However, storing only a portion of your Bitcoin in a Hot wallet is reasonable. Majorly being any funds, you plan to transfer or use shortly. On the other hand, cold wallets are where most of your crypto should be kept.
Following all the required safety protocols for using hot wallets is essential. These are steps you must take to protect other crucial personal accounts. Establishing the most substantial attainable level of security during a Bitcoin purchase is necessary. Here are the guidelines:
- Unsafe and open networks such as public Wi-Fi and shared systems should never be used to access your hot wallet.
- Your wallet details should not be shared with anyone.
- The details you use for your other accounts should differ from your hot wallet.
- Apply a two-factor authentication.
In contrast, cold wallets operate in an offline mode. Your private keys do not require an internet connection for storage. Because of their offline setup, they cannot be compromised by cyber attacks and thus remain the most secure method of Bitcoin storage.
One of the best things to do when buying Bitcoin is to get cold storage, of which there are two major types – Hardware and Paper wallets. Hardware wallets apply high-security procedures to protect your private key. They are primarily specialized USB drives and include apps that permit you to purchase and sell Bitcoin.
The information on your hardware wallet can be printed out by online services allowing you to reproduce online and private keys, creating a paper wallet. Using a piece of paper as your cold wallet key requires “sweeping” before it can be used. The credentials on your cold wallet can be “swept” by exchanges that claim to be some of the best without placing the private wallet key at the risk of compromise.
Although, for security concerns, cold wallets are the best choice. Notwithstanding, they must still be used alongside hot wallets. This is because for you to carry out online transactions, hot wallets are a necessity.
As a newbie in the Bitcoin world, you may not need cold wallets for a considerable period, especially when trading in average amounts. Nonetheless, you should ensure maximum security when using a digital wallet, as this makes you prone to cyber theft.
Our best recommendation for you is to start with a hot wallet. Some of the best are; Exodus, SoFi, and Mycelium. Many of these wallets come freely, but they have premium features that need to be paid for. Also, if you intend to purchase other types of cryptocurrencies, ensure that the wallet you’re getting can keep it.
What Are Public And Private Keys
You might have noticed the frequent use of the terms “public” and “private” keys in this article. Your Bitcoin private key is like your username and password; in reality, it is your Blockchain address. Which, upon the purchase of Bitcoin, is where the Bitcoin will be sent to.
First, let’s discuss the importance of Bitcoin private keys. Private keys are unchangeable, and there’s no solution to the problem of a forgotten private key. Private keys are made up of 64 characters, while public ones have 34 and must be kept safe. The details must only be known to you because the information can be used to withdraw the funds in your wallet by anyone with it.
Upon loss, it is impossible to retrieve your private, which is why it is essential to ensure that safety and access to your wallet are always maintained.
Step 2: Getting a Trusted Cryptocurrency Exchange
Some online platforms provide services for buying, selling, and storing Bitcoin and other cryptocurrencies. These platforms are called crypto exchanges, and Crypto exchanges offer a fast and secure way for transactions between parties. In your journey to amass wealth as a digital asset holder, crypto exchanges are necessary.
Thus, crypto exchanges are your answer if you’ve been pondering where to buy Bitcoin. As well we have two types – anonymous exchanges and identification-operated types.
Identification Exchanges
An identification exchange demands a government-approved means of identification from customers before allowing them to register. This is due to the KYC (Know Your Customer) policy which was made compulsory, especially for US-based exchanges.
Security breaches in the past have been a huge privacy concern for individuals and have discouraged many from using these exchanges. Nonetheless, some exchanges provide impenetrable safety to their customers. Examples include; Gemini, Kraken, and Coinbase.
Anonymous Exchanges
If you prefer to keep your identity a secret while trading Bitcoin, many crypto exchanges with excellent track records cater to this need. Some of the most popular non-KYC exchanges include; Binance, Bybit, and Nominex.
These sites allow operators to carry trade without providing identification and act as a solution for customers who don’t want their privacy tampered with. However, because of the nature of these sites, they are often used for illicit transactions by unlawful individuals. In the exception that you’re among such individuals, your trading experience will be in no way affected. Thanks to Blockchain technology, your safety is ensured.
In buying digital assets, you may be excited to purchase Bitcoin or the most successful digital currency in the market. Simply choosing the most popular Bitcoin exchange may be a fatal error. When selecting a Bitcoin exchange, many factors should be considered. Here are three important ones;
- Check if the exchange approves your method of payment.
- The Bitcoin fees charged by cryptocurrency exchange platforms differ when purchasing cryptocurrency. Find out which is favorable for you.
- Lastly, be informed if the crypto exchange permits the trade of other coins or currencies you may be interested in.
Step 3: Select a Method of Payment
The third step is to choose a method of payment that meets your needs. If you’ve found the best Bitcoin exchange for your needs, Make sure that the business you choose provides your method of payment should in case you have only one means. Among the widely accepted payment methods are credit cards, debit cards, and wired transfers.
In contrast, it is rare to find transaction methods that depend on e-wallets and are solely used for fund withdrawal. Fortunately, PayPal now allows customers to buy Bitcoin directly, and the company has obtained a conditional “Bitlicense” which allows the legal trading of Bitcoin on its platform among customers.
No payment method is best, as the individual user choice is subjective. This is because there are factors such as the fee, the state or country you’re living in, miner fees, etc. which can influence the choice of users.
It is also plausible to check if your bank’s transaction policies are crypto-friendly. If you make Bitcoin transactions with a debit card and your bank creates complications or downright rejects the transaction it would be unpleasant. Thankfully, more banks are becoming open to crypto transactions.
After selecting a payment method, add all required details for verification, and you’re set to trade. You may need to upload some documents on sites that do not permit anonymous trade with a credit card. A driver’s license, a government-issued ID card, and a valid passport may be required, but this can vary based on the exchange used and your state or country.
Step 4 – Purchasing Bitcoin
So far, we have discussed three steps in this guide which are very crucial. This last step is the primary step for making a Bitcoin purchase. First, note that most exchanges permit customers to connect more than one wallet to their account.
Before making an order to buy Bitcoin, it is essential to check for the current value in other exchanges to be sure that you aren’t purchasing at an inflated rate. Once you make the purchase, add the fiat cost you’re willing to expend on the platform, and the amount of Bitcoin it will translate to will be displayed to you. If you are satisfied with the outcome, then you can go ahead to place an order. Your order will typically be filled in seconds or a few minutes.
Exchanges like Coinbase provide experts and new traders with efficient trading automation that makes trading easier.
Alternative Methods Of Bitcoin Purchase
Peer-to-Peer Networks
Peer-to-peer networks are like Non-KYC exchanges that allow users to trade directly with each other and choose offers. The users can place a purchase or sell requests without any intermediary.
Bitcoin ATM
A Bitcoin ATM is a machine that allows you to buy Bitcoin in exchange for cash and move it to your private wallet. Some BTC kiosks also will enable you to sell your Bitcoin for cash.
FAQ
- How Can I Purchase Bitcoin?
Get a crypto wallet and a suitable exchange platform, select a payment method, and place an order to buy Bitcoin.
- How Do Beginners Buy Bitcoin?
Even if you are a novice, you can buy your first Bitcoin on sites like Coinbase with fiat currency.
- Can I Buy Bitcoins For A Dollar?
It is possible to purchase a dollar worth of Bitcoin by visiting a crypto exchange and placing a purchase order.
- Is it Worth It To Buy Bitcoin Now?
It is too late to start mining Bitcoin but investing in Bitcoin is still a good decision.
- Is it Safe And Legal to Buy Bitcoin?
This depends mainly on the jurisdiction of your country, but many developed countries have recognized Bitcoin as a legal asset.
