How to buy bitcoin – A beginners guide
Looking to get in on all that bitcoin action? Here’s how to start.
Are you interested in investing in bitcoin but don’t know where to start? If so, then you have come to the right place. Bitcoin is growing in popularity and is now accepted as a legitimate form of payment all over the world. Today we are going to teach you how to purchase your first bitcoin and how to store it.
Setting Up a Bitcoin Account
The first thing you will need to do is setup a bitcoin account. Bitcoin accounts are more commonly called a bitcoin wallet. By setting up a digital wallet you will have a place to store your coin once you have purchased it. These wallets are very secure and there are many different trusted ones out there. Below you will find a list of some of the most popular bitcoin wallets around. Each of these wallets is great for beginners because of its ease of use. They are also free to download but there may be some fees when you move money into other accounts.
- Coinbase: One of the most widely used digital wallets is Coinbase. This wallet is user-friendly and it will give you direct access to an exchange service, making it super easy to use. You can access your Coinbase wallet from any device and monitor your balance or transfer funds.
- Mycelium: Another popular digital wallet is Mycelium. This wallet is mobile friendly and features advanced technology. It is also one of the most secure wallets out there.
- Electrum: While this wallet is designed to be used on desktop computers only, it allows you to setup your own encryption key for maximum security. This is great for those looking to store large amounts of bitcoin.
Note: These digital wallets are wonderful for those just starting out with bitcoin. But if you plan on storing large amounts of bitcoin you will need to get an offline cloud storage wallet to protect your investment.
Pick A Bitcoin Trader
In order to purchase bitcoin, you will need to choose a trader. If you choose to purchase bitcoin without a broker your best bet is to use an exchange. When it comes to finding an exchange, you won’t have a hard time because there are so many of them out there. But finding one that is secure is highly important. Additionally, you will need to find out what fees they charge and what payment methods they accept. Below we will take a look at a few of the most widely used exchanges.
- Coinbase: Hands down one of the best exchanges out there, Coinbase is very easy to use. With its simple interface, those new to bitcoin will not have a difficult time turning their dollars into bitcoin. Also, Coinbase keeps its fees down to a minimum which is always nice. It is both desktop and mobile friendly.
- CEX: This exchange is one of the easiest to use and it provides you with instant exchange rates. Also, as a beginner, you will be happy to find easy buy and sell options. The only real drawback to the CEX exchange is that their payment options are a bit limited.
If you would like to search for more exchanges you can utilize Bitcoin.com’s exchange search engine. You simply put in your country and a list of available exchanges will pop up. Another really fast way of purchasing bitcoin is by using a peer-to-peer service. Two great examples of these services are BitQuick and LocalBitcoin. Here you will find a wide range of payment options and you will be trading directly with the seller. Recently, Paxful has been making waves in peer to peer market and claim to offer the easiest way to buy bitcoins.
Selecting Your Payment Method
Next, you will want to select your payment method. Most exchanges have a limit on the number of payment methods they offer. This is due to many people in the past using different payment methods to scam the exchanges. The most widely accepted methods of payment for most exchanges are credit card and bank account transfers. Many exchanges will not accept PayPal or wire transfers. But Coinbase will accept PayPal and wire transfers which have helped it become one of the most popular exchanges in the world.
Note: Another great way to exchange bitcoin for cash is by using a bitcoin ATM. These ATM’s are growing in popularity but are not in every city, so this option will be limited.
Buying Bitcoin and Storing It in Your Wallet
Most exchanges will provide you with exchange rates making it easier to understand the buying process. But keep in mind bitcoin rates quickly change from one moment to the next. Because of this, you will probably be buying only a fraction of bitcoin at one given time.
Read More: How to buy Ethereum
Your first bitcoin purchase should be a small one. This will allow you to learn how everything works. After you have made your purchase your bitcoin will be placed in an account on the exchange. Then you can transfer your coin into your own personal digital wallet, using its unique address for a small fee.
Note: When you exchange your dollars for bitcoin the transfer process can take some time. This is because the transaction needs to be recorded in the blockchain. A transfer can take several hours during a busy trading day, so you will need to be patient.
Using Your Bitcoin
Once your bitcoin is safely secure in your wallet, you can begin to use it. Now you can make purchases with your coin at retailers that accept this amazing cryptocurrency. Also, you may want to sell your bitcoin for a profit at a later date. If you are going to sell bitcoin, you will need to set up a seller account ahead of time.
To learn more about the companies that accept bitcoin, here is a comprehensive list of online stores that will gladly take bitcoin off your hands in exchange for goods or services. But before you make a purchase, always do your homework by doing your own research.
Read More: How to sell bitcoin – Bitcoin selling guide