How To Buy Bitcoin: Step By Step Guide For Beginners

Highlights

• Getting proper information and knowledge about how to buy and keep Bitcoin is necessary to make the right investments.
• Bitcoin prices fluctuate to a large extent and are getting more volatile over time. Hence, it is necessary to purchase Bitcoins at the right time and for the right price.

Bitcoin owns wide acceptance throughout the world and has a greater number of applications. Its value is increasingly growing in terms of worth. Bitcoin has created itself a leading place in the digital world and operates on decentralized technology, Blockchain. The blockchain prevents manipulation or edition of the records. It maintains a record for every transaction. It is the first cryptocurrency created in 2009. 

Getting proper information and knowledge about how to buy and keep Bitcoin is necessary to make the right investments. Bitcoin has a limitation of 21 million, therefore this particular cryptocurrency has a high demand. Bitcoin prices fluctuate to a large extent and are getting more volatile over time. Hence, it is necessary to purchase Bitcoins at the right time and for the right price.

Steps to follow for purchasing Bitcoins

• Find The Right Bitcoin Wallet

Digital Wallets keep Bitcoins safe. Bitcoins can be stored in it unless one decides to spend or exchange them. There are numerous Wallets to choose from based on features and platforms. If one opts to set up a Wallet that is not connected to a Bitcoin exchange, there are numerous options too.

Bitcoin wallets exist in various forms amongst which online wallets are more recommended for beginners. Easy set-up, time-efficient and simplifications are few of the benefits online wallets offer. Several sites claim and recommend the best digital wallets. However, it is necessary to do a thorough study before finalizing the digital wallet. To list important factors based on which one should Bitcoin Wallet are:

• User-friendly Interface: One must choose user interfaces that offer easy access, easy sending and buying of the Bitcoin. Few of the user interfaces involve complex methods that don’t attract new users.
• The extent of anonymity: The choice of wallets also depends on how comfortable the user is with anonymity. If one has concerns over this, then to avoid wallets that focus on complete privacy is a recommendation.
• Prevalence of use: Wallet choice must also focus on how often one is planning to send bitcoins. If planning for prevalent use, then one must decide a wallet that has easy access to mobile phones.

• Set up an account on the chosen exchange

Different Bitcoin exchanges have different features, rules, and payment methods. The three categories of the exchange are brokers, trading platforms and P2P platforms. One can set up an account in any of the three categories.

• Brokers refer to the sites that let the buying of coins on their platform. The platform decided a set price and the coins are purchased based on this. These exchanges are simple to operate and are therefore, popular. Coinmama and Coinbase are two examples for brokers. If one opts to sign up for a Coinbase account, few credentials need to be filled up. 
• Trading platforms are well-known for connecting buyers with sellers directly. A fee is charged for the provision of service by the platform. Each trading platform has its benefits and flaws.
• Peer-to-Peer (P2P) platforms allow direct communication between buyers and sellers. This gives a chance for negotiation over the price. However, it also comes with risk, as this is a process of sending money to an unknown seller. Nonetheless, it offers more options for payment methods. LocalBitcoin and BitQuick are two examples of P2P exchange. 

Choose a payment method

As mentioned above, different exchanges feature different payment methods. For instance, Coinbase provides both bank account and credit/debit card payment methods.

Few of the payment methods are listed below:

• Buy Bitcoin with Credit Card: Credit Cards and Debit Cards are prominent payment methods. Coinmama, Cex.io, and eToro are examples of exchanges that provide credit card payment.
• Buy Bitcoin with PayPal: Purchasing Bitcoin through PayPal doesn’t have a direct method. However, there are many indirect ways to buy Bitcoins through this payment option. The transactions involved through PayPal are irreversible. 
• Buy Bitcoin with Cash: Making payments through Cash is comparatively cheaper and faster. However, a drawback is that it involves face-to-face transactions. Hence, one has to be extra careful when making this a choice of payment method.

Store Bitcoin in Wallets After Purchase

One can decide for themselves the number of Bitcoins one is willing to purchase. After this, one can set a price for the required amount of Bitcoin. However, few exchanges determine their own set of prices, as mentioned earlier. The completion of the purchase is marked as the first trade. Following this, the Bitcoins are stored in the chosen Bitcoin Wallet. A small fee is associated while transferring the funds to the address of the Bitcoin Wallet. Each successful transaction is recorded on the blockchain.

Make use of the Bitcoin

There exist wide options as to how to make use of Bitcoin. It can be either sold or used to buy something else. It is necessary to be wise and have everything planned out since there always exists fluctuations in the value of bitcoin. If one chooses to sell Bitcoins, a seller account has to be set-up. Well, ultimately it is the wise planning in this step that decides how well one makes use of the Bitcoin.

Umme Haani