So you’ve understood the fundamentals of bitcoin, and you’re thrilled about its possibilities. But how exactly?
Compared to when Bitcoin was originally introduced in 2009, purchasing cryptocurrency has become increasingly simple. Bitcoin can now be purchased directly on cryptocurrency exchanges, peer-to-peer marketplaces, Bitcoin ATMs, and even certain traditional brokerage platforms. The list is pretty lengthy.
Depending on who and where you are buying from, you can also use real cash, credit or debit cards, or wire transfers.
Before you purchase your first bitcoin, you must first select how you intend to store it. Consider this to be the equivalent of having a bank account or a physical wallet in which to keep your money.
As for bitcoin, you can use an online wallet, such as an exchange platform or a third-party provider, a mobile wallet, a desktop wallet, or an offline wallet, such as a hardware device or a paper wallet.
That being said, here’s a simple rundown of how to purchase the most popular cryptocurrency.
Exchanges of cryptocurrencies
Cryptocurrency exchanges are one of the simplest ways to get bitcoin. A crypto exchange, as the name implies, is a site that allows you to purchase and sell cryptocurrencies using several traditional fiat money alternatives or other digital currencies.
To purchase bitcoin on a cryptocurrency exchange, you must first create an account on the exchange site. You may also be asked to go through certain know-your-customer (KYC) and anti-money-laundering (AML) procedures — these are simply simple background checks to ensure that the crypto exchange knows who you claim you are. This usually includes producing your official ID and, in some cases, proof of address. On the other hand, several exchanges restrict your access and perks if you sign up with simply your email address without validating your identity. This is an excellent alternative if you want to remain anonymous and do not intend to purchase a huge number of bitcoin.
While there are hundreds of crypto exchanges to select from, as a newbie, it is recommended that you stick with prominent high-volume exchanges such as Binance, Coinbase, Houbi, FTX, and Kraken. However, it’s always a good idea to do your own research before deciding on a specific exchange to use. Some are only open to residents of specific countries, while others are oriented for more experienced traders.
After you’ve decided on an exchange, the following step is to fund your account so you may buy bitcoin. Most exchanges will let you fund your account with bank transfers, credit cards, or PayPal.
Keep in mind that certain funding options, such as credit card deposits, will be charged fees by most platforms. In addition to deposit fees, you will be charged a fee for each transaction in order to motivate a bitcoin miner to complete your transaction.
After you’ve financed your account, you’ll be able to buy bitcoin on your preferred exchange.
It is important to note that the exchange will immediately build a wallet for you. The disadvantage is that you have no control over your private key – the key that determines who the genuine owner of the cryptocurrency stored in the wallet is – and may lose some or all of your bitcoin if the exchange is hacked. This, on the other hand, is a terrific alternative if you intend to exchange your bitcoin for other cryptocurrencies and profit from price fluctuations.
If you want to buy a considerable amount of bitcoin with no intention of selling it soon, you should transfer your funds to an offline or hardware wallet.
Peer-to-peer bitcoin exchanges
While crypto exchanges have become the de facto way to buy bitcoin, you may also buy it directly from other bitcoin owners using peer-to-peer services such as LocalBitcoins, Paxful, Binance P2P, and Bitquick. Over-the-counter (OTC) trading is another term for this.
OTC trading is significantly faster and provides a wider range of payment choices. Buying bitcoin from individuals, on the other hand, might be exceedingly dangerous. Meeting a total stranger face to face to privately swap money for cryptocurrencies isn’t always a good idea. Platforms such as LocalBitcoins provide a far safer alternative, employing an in-house escrow service to ensure the transaction process proceeds properly.
ATMs for Bitcoin
Bitcoin ATMs work in the same way as traditional cash ATMs do. The only difference is that you can purchase and sell bitcoin instead of only withdrawing money. In exchange for cash, these devices will transmit bitcoin to your wallet. Simply insert the money, hold your wallet’s QR code up to a screen, and the equivalent amount of bitcoin is beamed to your account. Coinatmradar can assist you in locating a bitcoin ATM near you.
Typical stock brokers
Because of bitcoin’s increasing popularity, numerous traditional brokers now allow users to purchase and sell the digital asset on their platforms. In this aspect, Robinhood is a pioneer. It is the first mainstream financial broker to allow users to acquire bitcoin, as well as a variety of other cryptocurrencies, on its platform. Its crypto arm, Robinhood Crypto, is likewise available in the majority of US states. Similarly, broker services such as eToro and TradeStation allow you to purchase bitcoin.