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Crypto Basics | Bitcoin

A Quick Guide To Buying Your First Bitcoin

Author

Rickie Sanchez

Tags

Tags Editor's Choice

Reading time

3 mins
Last update

Author

Rickie Sanchez

Tags

Editor's Choice

Category

Crypto Basics / Bitcoin

Reading time

3 mins
Last update

Author

Rickie Sanchez

Tags

Editor's Choice

Reading time

3 mins
Last update


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A Quick Guide To Buying Your First Bitcoin

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Key Takeaways

  • You can buy, hold, and store Bitcoin and cryptocurrencies in several ways.
  • Cryptocurrencies can be used as a hedge against any currency due to their deflationary and transparent nature.
  • Ensure you understand why you are investing in Bitcoin before committing any investment.

Why Should I Buy Bitcoin?

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Bitcoin is an internet-native asset underpinned by blockchain technology, which is a global network of nodes that independently verifies and validates blocks of transactions, which are then added to the ledger. To date, Bitcoin represents the first decentralized, global, and internet-native money that anyone with an internet connection can access, use, and transact with for any reason.

Furthermore, Bitcoin can be used as a hedge against any currency due to its deflationary and transparency. There will only ever be 21 million Bitcoin in its total supply, and the code that runs the software is open-sourced and free for anyone to investigate or run independent tests on.

When compared to centrally issued money and currency, no one knows exactly how many coins and notes are in circulation, which hands they are flowing through, and what the next monetary policy will be issued to move the economy in one way or the other.

To answer the question of why you should buy Bitcoin, it removes the obscure middlemen that impede the free flow of money and currency for goods and services globally.

How Much Bitcoin Should I Buy?

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The amount of Bitcoin you should buy depends on three key factors: your budget, your overall investment portfolio, and your reasons for buying.

Bitcoin’s price fluctuates greatly because it depends on what the market thinks it is worth. Additionally, making a quick profit from Bitcoin is risky, especially if you are new to trading. It is more likely you will lose money than multiply your savings.

Before investing in any asset, develop a clear investment thesis. Research and understand the market, then discuss your strategy with a financial advisor experienced in traditional and alternative assets. Once you have a solid foundation and confidence in your approach, gradually increase your holdings.

Where Should I Buy My First Bitcoin?

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There are several ways to acquire Bitcoin, depending on your location and what is available in your market. For example, the easiest method is via a centralized exchange, where a user can use a bank account or card to purchase. In some countries, additional steps must be taken as the banking industry views digital assets negatively. If you are technologically savvy, then using a decentralized exchange (DEX) such as Uniswap or PancakeSwap is much quicker.

In 2017, peer-to-peer trading via the now-defunct LocalBitcoins website was quite popular. Even with the website shut down, people still meet in person and exchange cash for a deposit to the wallet of their choice. In some countries, some ATMs offer digital assets for sale. Depending on the amount being purchased, an ID may be required. Beyond that, a user can easily use cash to top up their crypto wallet.

How To Store, Hold, And Manage Bitcoin?

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If you plan to hold Bitcoin long-term, prioritize security and choose a hardware wallet. If you trade frequently, a small amount on an exchange might be suitable for easy access. Depending on your needs, you can even use a combination of wallets.

Remember, if you choose a self-custody wallet like a hardware wallet, you manage your private keys, so strong passwords and two-factor authentication (2FA) are very important. Understanding these storage options and security best practices can help you keep your Bitcoin safe.

Final Thoughts

Buying your first Bitcoin is an exciting prospect. However, a new user can easily lose access to all purchased assets without proper preparation. Since there is no customer service to reverse transactions, it is important to know the logic behind a purchase, prepare to be fully responsible and hold the assets purchased, and, at the right time, trade or sell the asset based on a solid entry and exit plan. Overall, Bitcoin is now more accessible than ever to users all around the globe!