Bitcoin is not only the first cryptocurrency but the most popular and first by market capitalization. Which makes it a safe and soft spot to start for anyone first getting their foot into cryptocurrency. Since its launch in 2009, Bitcoin has experienced tremendous growth and wide acceptability.
From 2013 to 2021 for instance, the coin experienced up to 30,000% growth. And with various predictions from experts and crypto enthusiasts, it is clear that the coin is going nowhere but up in the coming years. So, if you are thinking of investing in Bitcoin, now might just be the right time to get things started.
However, investing in Bitcoin can sometimes look complicated. But when it’s broken down into simple steps, it becomes very easy even for beginners. In this post, we have broken down the whole process of how to buy Bitcoin to make the journey super easy for you.
Things You Should Know Before You Buy
Before you go ahead to buy your bitcoin, it is important you understand some things about the coin and about the crypto space as a whole. This will keep you guided in your trading journey. First, you need to understand that Bitcoin is very volatile, and so you cannot be 100% certain about what happens to it in the next minute.
The price might shoot up at any time, and then go all down again in the next minute. So, it is not recommended that you invest your life savings into it. Only invest the money you can afford to lose. However, you can also make a fortune out of Bitcoin in a matter of minutes. It is a double-edged sword.
Another thing is that losing your private key would mean losing all your coins no matter how little or much they may be. Your wallet comes with a private key which serves as the password to the wallet. Once you lose it or it gets into the wrong hands, that could mean losing all your investment.
And transaction on the Bitcoin blockchain comes with a high level of anonymity, which means even if your coins are stolen, you can’t know where they go or who stole them.
You Will Need a Secure Storage for Your Bitcoin
Just like your bank account helps you store your traditional currency, you will also need a crypto wallet to store your Bitcoin. You can store your BTC in two types of wallets; hot wallets and cold wallets, and each of them comes with its unique pros and cons.
With a hot wallet, transactions are generally faster and they are cheaper than a cold wallet. These types of wallets require an internet connection to work, and so they are more vulnerable to theft and hacking. A few examples of hot wallets are Coinbase, Electrum, Mycelium, etc.
A cold wallet on the other hand tends to be more secure because they don’t need to be connected to the internet before it can be used. They are small encrypted portable devices you can use for storing your Bitcoin. Though they are more secure, they can also be very expensive compared with hot wallets. A cold wallet can cost anywhere from $60 to $500. Some examples include Travor, Ledger Nano, CoolWallet Pro, KeepKey, etc.
Steps for Buying Your Bitcoin
Step 1: Decide where to buy Bitcoin
There is a couple of option available to you when it comes to buying Bitcoin. Popular ones include buying from a traditional broker or through a cryptocurrency exchange. Choose the one that is best for you and begin your purchase journey right away.
- Crypto exchanges: These are platforms that allow you to buy various types of cryptocurrencies, including Bitcoin. They allow you to buy while charging you certain fees for the action. Different exchanges offer different features, security, and fees, so do your diligence before opting for one. Some exchanges that offer Bitcoin include Binance, eToro, Coinbase, Gemini, Robinhood, etc.
- Traditional brokers: You can also buy your Bitcoin through brokers. They, however, charge more fees than exchanges but they also make the process of buying and selling Bitcoin easier than every other option. If don’t see anything wrong with sparing extra cash for the best experience, then choosing a broker when looking to buy Bitcoin is a good choice. Some of these brokers are Anycoin Direct and Robinhood.
What other methods can you use for buying?
- Bitcoin ATMs: These work like the traditional ATMs – just that they only deal with Bitcoin. Bitcoin ATMs allow you to buy and sell Bitcoin from the ATM spot. Visit Coin ATM Radar to see the nearest bitcoin ATMs to you.
- Peer-to-peer: This is a very easy method. It doesn’t require any fees. However, it is also the riskiest. It involves meeting anyone that has Bitcoin to sell and buy from them. There are also platforms that make this easier such as Bitquick, Bisq, and LocalBitcoins.com.
#2: Create an account
Whether you choose a crypto exchange or broker as your preferred way of buying Bitcoin, the next step is to create an account with them. You will need to provide some documents during registration, such as a personal identification document like your KYC, and some other documents depending on the platform you are using.
#3: Connect your wallet
Once you have created and verified your account with your preferred crypto exchange, the next thing is to connect your wallet to securely buy your Bitcoin. We already discussed the different types of crypto wallets that are. So choose one that best suits your needs and connect it with your newly created account. Connecting it simply means providing the public address of the wallet in the space provided on your account.
#4: Place an order to buy your Bitcoin
Once you have connected your wallet to your account on your chosen crypto exchange, then you are ready to make your purchase. On the exchange platform, specify how much bitcoin you would like to buy or the amount you want to spend, then the calculator can help you decide how much bitcoin you will get. You don’t have to buy a complete 1BTC; you can buy a fraction of it. So as low as $25, you can buy bitcoin.
#5: Choose a payment method and receive your bitcoin
After confirming how much BTC you need, you will need to specify how you want to pay for it. Depending on the platform you use, you can choose to pay via debit or credit cards, PayPal, bank transfer, or other means. Once your order is made, wait for your Bitcoin to arrive in your wallet.
That’s it. You have just successfully bought your first Bitcoin. It is that simple. Once you bought the bitcoin, you can now decide on how to use it – whether to hold it and sell when the price is high, use it for making a purchase, or use it to trade other cryptos and make quick cash.