How to Buy Bitcoin – Getting Started in Cryptocurrency
Bitcoin as well as Ethereum and many other cryptocurrencies all require a beginning. Perhaps the most fundamental step in the process of getting your hands on some coins is how to buy them.
While buying bitcoin is simple, it’s also very easy to mess up, especially for beginners. There are more factors going into it than most people think, and some of which you cannot ignore.
It comes down to preparations and research and awareness of your own investing power. For each of these, there are different approaches that may also vary depending on your financial situation.
It’s a daunting task getting started in something as vast and unpredictable as a cryptocurrency but we’re here to take some of that burden off your shoulders. Remember that it’s totally okay to move at your own pace – this isn’t something you can rush into especially if you don’t have a sizable budget.
This article will guide you through how to buy bitcoin as well as any other crypto on a step-by-step basis.
Step One – Get a Bitcoin Wallet
Before you buy bitcoin you need to make sure to have a place to put it. Modern bitcoin wallets can also hold other types of cryptocurrencies. They only have it in the name as bitcoin has become incredibly mainstream.
While most places that sell crypto will often have an attached wallet for you to store, it’s still a part of that platform. You want something that is entirely your own and separate from whoever holding your coins. This way, you can transfer your bitcoin or whatever currency you have into your wallet when the time comes.
It’s fairly easy to get a wallet. Some of the best ones include Metamask, Exodus and Electrum. You can choose one based on your liking but those that come with their mobile apps are a lot more convenient.
Simply download the app to your devices and you’re ready to store some bitcoin. Every wallet comes with a private key. This is a series of RNG-based phrases that you need to access your funds in the wallet. Share them with absolutely no one as it’s equivalent to giving them access to your bank account.
Another thing to consider is getting a cold wallet. It is the physical alternative of a bitcoin wallet, usually in the form of a USB drive. As it’s not connected to the internet, your coins are safe from hacking and stolen passwords. The downside is if something happens to your hard drive, you could lose all your coins forever.
Step Two – Choose a Crypto Trading Platform
Once you’ve got your wallet set up, it’s time to buy some bitcoin.
This is where you’re often faced with a plethora of choices and making the right one can have a lasting impact on your cryptocurrency career.
At this point, you should consider the reason behind buying crypto. A lot of people just want to buy bitcoin to pay someone or to purchase a particular product. In this case, you can just head to a peer-to-peer (P2P) exchange where buyers and sellers directly interact.
These places let you buy crypto from other holders and be on your way. While convenient, these exchanges often come with high costs, most of the time significantly higher than a standard trading service.
If you plan to trade with the coins you’re purchasing, then it’s better to use a crypto trading service. These places offer instant buying options, which also comes with lower fees. They provide a platform with many trading features and tools, such as performance charts and historical data that allow you to make the most of your investment.
Not all crypto trading services are good just because they have a user interface and cool-looking charts. You want to look past the surface to see if they are a trustworthy platform.
First, check if they require a KYC application to sign up. This is a lengthy but comprehensive verification process that makes your account much more secure. The level of effort they put into knowing who you are, indicates how serious they are in what they do.
Second, try to find out how compliant they are with local regulations. Even though bitcoin was built on anonymity, a certain degree of centralization is needed for users’ safety.
Step Three – Select Method of Payment
When you’ve decided which platform to use, you’re now ready to make the first purchase.
There are several options when it comes to payment. Most people would use either their debit or credit card, but you can also buy bitcoin using wire transfer.
Note that each option usually comes with a different fee and this also depends on the exchange you’re using. Some will offer cheaper credit card fees but more expensive bank transfers and vice versa.
In general, credit card is the most costly option as it’s considered as a cash advancement. To learn more, you can check with your bank or credit card company.
Another thing to keep in mind is some banks allow transferring to a crypto exchange but not the other way around. Some don’t even allow it at all. It’s always a good idea to call them and ask before signing up.
You also don’t want to confuse buying with swapping and you often find both of these features in the same place. Buying is simply using fiat currency to exchange for crypto. Swapping refers to exchanging one type of coin for another.
Final Thoughts
You can follow the steps above to obtain your very own cryptocurrency. Put it to good use, spend it, or simply watch it jump up and down on the volatility wave, it’s entirely up to you.