Looking for a guide to buying Bitcoin? Wondering where to start? People have many misconceptions about Bitcoin, the first widely known and accepted cryptocurrency worldwide.
Many people think, for example, that only hackers and shady people use it. However, Bitcoin is actually making the rounds with everyone from TigerDirect to Expedia.com to Dell and even Subway now accepting Bitcoin payments.
Why so popular?
Well, Bitcoin has many advantages over other currencies. For example, you can send bitcoins to someone as payment without going through a bank intermediary (and incurring additional fees). It’s also much faster than sending money via bank wire or wire transfer. You can send bitcoins to someone and have them receive the coins within seconds.
With all of this, it’s no wonder that many people are now trying to buy Bitcoin for the first time. However, it’s not as easy as going to your bank and withdrawing bitcoins, or going to a store and taking out your hard-earned cash in exchange for bitcoin.
The system works a little differently than that. This guide to buying Bitcoin will cover a few things you need to know before you buy so you can buy safely and securely.
First, even though the price of one coin can exceed $2000, you don’t have to buy all the bitcoins. Most places will let you buy parts of bitcoin for $20. So you can start small and go from there as you feel more comfortable with how things work.
Second, this article is for general purposes only and should not be construed as financial advice. Bitcoin can be risky and you should consult your financial advisor before making any purchase to determine if it is right for you.
So here are 3 easy steps to buy bitcoins:
#1 Get a Bitcoin Wallet
The first thing to do before buying your coins is to get a virtual wallet to store your coins. This wallet is a string of text that people can use to send you bitcoins.
There are a number of different types of wallets, including ones you download to your phone or computer, online wallets, and even offline, cold storage wallets.
Most people prefer to receive a wallet by phone or computer. Popular wallets include Blockchain, Armory, Bitgo MyCelium, and Xapo.
It’s usually as simple as downloading the wallet as an app to your phone or downloading the software to your computer from the wallet’s main website.
#2 Decide where to buy
There are several types to buy, and each one is a little different. There are online sellers that will sell you bitcoins directly for cash (or bank wire or credit card).
There are exchanges where you can buy and sell bitcoins from others, similar to the stock market. There are also local exchanges that connect you with sellers in your area who want to sell.
There are also ATMs where you go to make cash purchases and have your coins delivered to your wallet within minutes.
Each bitcoin vendor has its own advantages and disadvantages. For example, ATMs are great for privacy, but they will charge you up to 20% of the going rate, which is ridiculous. (At a BTC price of $2000 that $400. So you pay $2400 instead of $2000).
No matter where you decide to buy, remember to do your research and go with a trusted seller with a good reputation and strong customer service. First-time buyers in particular will have questions and may need additional support to help them with their first transaction.
Take your time and research different places to buy before making a decision. Factors considered include coin prices, additional fees, payment method, and customer service.
#3 Buy Bitcoin and transfer it to your wallet
Once you’ve found a place to buy, have your funds ready (ie, you can wire money or use your Visa to fund your account). Then wait for a good price. (Bitcoin prices always fluctuate 24 hours a day, 7 days a week). Then order when you’re ready.
Once your order is complete and you have your coins, you will want to send them to your wallet. Just enter your bitcoin address and ask the seller to send you your bitcoins. You should see them appear in your wallet within minutes to an hour (depending on how fast the seller sends them).
Voila, you now own a bitcoin. Now you can send coins to pay for other goods and services, or hang onto them for a rainy day.
One last thing to remember is that Bitcoin is still in its infancy. There are huge price swings and the currency can be risky. Never buy more bitcoins than you can afford to lose.