How Can I Buy Bitcoin?
It wasn’t until 2018 that Bitcoin entered the popular consciousness and was taken seriously by the general public. Before that, it belonged to a closed circle of crypto enthusiasts and original investors who kept a close eye on its wobbly success. Once people started noticing the benefits of blockchain technology and Bitcoin itself, they suddenly became eager to invest as well.
But investing in Bitcoin is not the same as investing in the stock market. It can be tricky for beginners, who must have tons of questions when it comes to purchasing Bitcoin.
By the end of this guide, we’ll try to answer most if not all of them.
Things You Need to Buy Bitcoin
When you have physical currencies, you need a physical wallet to store them in. In the case of digital coins like Bitcoin, you use an online wallet to safeguard your encrypted private and public key. The coins themselves are virtually stored as codes on the blockchain network.
You can think of the public key as your Instagram username. This name is public, i.e. everyone can access the blockchain and see your digital signature. However, unless you share it with other people, it’s nothing but a pseudonym, untraceable to your real identity.
The private key is more like a password that only you should see. It’s how you send coins and make transactions. If someone gained access to your private key, that person could steal all your money by transferring the coins to a third account.
Therefore, the purpose of the digital wallet is to keep both keys safe. That’s why software wallets have multiple security methods such as two-factor authentication or IP address whitelist. Despite these efforts to make digital wallets safe, we recommend purchasing a hardware wallet for maximum protection.
Speaking about security measures, to be able to trade cryptocurrencies on licensed and fully compliant crypto exchanges in the States, you are required to give out some personal information when registering for an account.
This includes stating your full name, place of residence, email address, phone number, etc. Next, to pass the Know Your Customer (KYC) check, which is a prerequisite assigned by the US financial regulators, you need a scanned copy of a government-issued ID card, passport, or driving license, and your Social Security Number.
Most people open their digital wallet accounts using computers connected to a public Wi-Fi network without realizing that they’re creating shortcuts for hackers this way. These computers can get infected with malware, which isn’t the case with air-gapped computers whose IP addresses can’t be tracked as easily.
Choose an Exchange
Even if you didn’t know how to buy Bitcoin, you must have heard something about crypto exchanges. These platforms allow you to buy, sell, trade, transfer, and convert various cryptocurrencies without a problem. All you need to do is create an account and deposit some funds.
There are two main types of crypto exchanges: fiat to crypto and crypto to crypto exchanges. The former is best for beginners who own zero cryptocurrencies but want to purchase some using traditional fiat currencies, either via credit/debit cards or a bank transfer. The latter is primarily used by experienced traders who already have some digital coins in their possession and are looking to trade them for some promising cryptocurrency to maximize the profits.
Currently, the most popular platforms are Binance and Coinbase. When searching for the right exchange you should pay attention to the number of supported cryptocurrencies and payment methods, service fees, customer support, and security methods.
You’ve probably read articles about unfortunate scenarios involving poorly protected platforms whose users have lost thousands of dollars as a result. Proper research and user reviews come in handy if you want to avoid this.
Apart from standard crypto exchanges, you can buy BTC from similar peer to peer platforms that act as Bitcoin brokerages. Although the fees might be higher, it’s easier to find sellers who accept your preferred payment method. Finally, you can check whether your city has a Bitcoin ATM where you can exchange cash for BTC instantaneously.
Choose a Payment Method
If you find an exchange that you like, always double-check that it supports the payment method you want to use to deposit funds into your account and buy Bitcoin. Most of them allow bank transfers, wire transfers, and credit and debit cards. Others support PayPal or even Amazon gift cards.
It’s also worth noting that bank transfers are usually cheaper than cards. However, it might take more than two or three days for the BTC to reflect in your account balance. Credit and debit cards incur higher fees but are more convenient and faster for a lot of people.
Disclaimer: Digital currencies and cryptocurrencies are volatile and can involve a lot of risk. Their prices and performance is very unpredictable and past performance is no guarantee of future performance. Consult a financial advisor or obtain your own advice independent of this site before relying and acting on the information provided.