Purchasing Bitcoins Safely
Bitcoin is a digital currency that can be spent on products and services in the same way that actual money can. In reality, it possesses all of the qualities of traditional money, such as mobility, divisibility, scarcity, durability, and ease of identification.
The price of bitcoin is regulated by the flow of supply and demand; the price rises when demand rises and falls when demand lowers. At any one time, the amount of bitcoins is restricted, and new bitcoins are generated at a predictable rate.
1 Bitcoin is now worth USD 40,796.90 at the time of writing. Many individuals acquire bitcoins as an investment, while others utilize the digital money to purchase products from any business that takes it.
You may get them from a variety of online businesses or individuals, but you must exercise caution when selecting dealers to avoid fraud; as always, it is best to buy only from trustworthy organizations and people you trust.
If you live in the United States and have a bank account in the United States, Coinbase is one of the most respected and extensively used platforms for acquiring bitcoins. You will need an account number and a routing number to make the purchase (both of which can be found on a check).
Coinbase also offers the option of tying your bitcoin wallet to a credit card for speedier processing, although this is not required. Another advantage of the service is that you do not need to manually set up a bitcoin wallet because Coinbase serves as one. The procedure is straightforward enough that even first-time customers may simply follow it.
Many countries have their own reliable services. Coin Loft, in addition to Coinbase in the United States, is available to Australians. You may buy bitcoins with Coin Loft using cash or a coupon. In Australia, the coupons are widely accessible and may be purchased in values ranging from $20 to $500. Coin Loft is an ADCCA industry member (Australian Digital Currency Commerce Association).
For the rest of us, there’s always LocalBitcoins. Instead than selling and purchasing bitcoins through a centralized mechanism, LocalBitcoins just facilitates transactions with other individuals. Consider it an eBay for bitcoins, where you can check out vendors’ reputations and set up appointments for in-person transactions. To avoid fraud, there is also an escrow service. If something goes wrong with your transaction, LocalBitcoins will assist you in resolving any issues.
Bitcoin payments are accepted by a large number of trustworthy online e-commerce businesses. Microsoft, for example, has permitted the use of bitcoins for purchasing digital material from its online platforms since December 2014; Dell, another internationally famous corporation that takes bitcoins, allows people to purchase machines using the digital currency.
Buying bitcoins is not a new concept, and many online providers are savvy enough to add security measures and avoid fraud or scams. However, it is always advisable to utilize only reliable internet services and to conduct your due diligence by reading reviews and conversations. Bitcoin transactions are secure provided you utilize a secure provider.
Step by step guide for buying BTC
- Select a Crypto Exchange
To purchase Bitcoin or any other cryptocurrency, you will need to use a crypto exchange, which is a meeting place for buyers and sellers to trade cash for coins.
There are hundreds of exchanges available, but as a newbie, you should choose one that combines simplicity of use with minimal costs and great security. If you don’t already have an exchange in mind, make sure to check out our top selections for best crypto exchanges, such as Coinbase, Gemini, and Binance.US.
Check to see if your exchange’s platform has a Bitcoin wallet; if not, you’ll need to create your own. You may also acquire cryptocurrency using a site like as Robinhood, Paypal, or Venmo.
However, buying cryptocurrency in this manner frequently implies that you will be unable to withdraw your coins and transfer them to another platform. If you wish to move your crypto assets to a new wallet, you must first sell them and then repurchase them on a separate exchange.
- Select a Payment Method
You must fund your account after selecting an exchange before you can begin investing in Bitcoin. You may fill your account with bank transfers from a checking or savings account, PayPal, wire transfers, a cryptocurrency wallet, or even a credit or debit card, depending on the exchange.
However, be in mind that platforms may charge additional transaction costs for specific funding alternatives. Coinbase, for example, does not charge a fee if you make an electronic transfer from a bank account. It does, however, levy a fee of $10 for wire transfers and 2.5 percent of the transaction value if you use PayPal.
Things grow much more expensive if you use PayPal or a debit card to make a straight bitcoin purchase rather than loading your account and then utilizing transferred funds to complete your transaction: The Coinbase charge has increased to 3.99 percent of the transaction value. Other platforms’ credit card transaction costs are frequently at least as high.
Because fees lower the amount of money you can invest (and hence the amount of money you have to grow and multiply), electronic transfers from a bank account make more sense than alternative options. Furthermore, if you use a credit card to purchase cryptocurrencies, it will typically be considered a cash advance and will be subject to a higher interest rate than you pay on ordinary purchases.
- Make a Purchase
After your account has been financed, you may make your first order to purchase Bitcoin. Depending on the platform, you may be able to buy it by just hitting a button, or you may need to input Bitcoin’s ticker symbol (BTC). You will next be asked to enter the amount you wish to invest.
You will possess a fraction of a Bitcoin after the transaction is completed. This is due to the high initial cost required to purchase a single Bitcoin today. If the current price of Bitcoin was $40,000, for example, you’d need to invest that much to get one. If you invested less, say $1,000, you would receive a proportion of a Bitcoin, in this example 0.026 percent.
- Choose a Secure Storage Option
The cryptocurrency exchange you use most likely provides an integrated Bitcoin wallet or a favored partner where you may safely store your Bitcoin. Some users, however, are hesitant to leave their cryptocurrency connected to the internet, where it may be more easily stolen by hackers.
Most large exchanges have private insurance to compensate customers if this occurs, and they are progressively holding the majority of user assets offline, in what is known as cold storage. If you desire the highest level of protection, you may keep your Bitcoin in an online or offline Bitcoin wallet of your choice. However, bear in mind that if you withdraw cryptocurrency from an exchange, you may be charged a modest withdrawal fee.
Furthermore, if you utilize a third-party crypto wallet custodian, you may be unable to access your coins indefinitely if you lose the private key that serves as your wallet password. This has prevented several Bitcoin billionaires from accessing their money.