Do you know the safest way to Purchase Bitcoin? Let’s dive right into it.
If you are reading this guide it means you have made up your mind to invest in Bitcoin, and that’s a great decision, but do you know how to buy Bitcoin?
A study conducted by the Global Blockchain Council revealed that most people agree that purchasing Bitcoin is not easy. And maybe you share the same opinion.
But the truth is, it is effortless!
By reading this article, you’ll understand how to buy Bitcoin safely, so that you can start earning some good profit.
First, Open A Bitcoin Wallet
As a new crypto investor, it’s essential that you understand how cryptocurrency wallets work. These wallets are where digital currencies are spent, received, and banked. Apart from the coin flash and blockchain, wallets are among the basic structures in the world of New Finance.
A wallet is a database, stored online or offline that stores private keys for your cryptocurrencies. When you make a transaction, you sign for the same with your private key, which shows you have agreed to the transaction.
The recipient’s private key is encoded on the transmitted key to transfer ownership to the buyer.
Cryptocurrency wallets can exist in physical devices, as a software, or a managed web account. There are plenty of wallet options available, and these will be listed below.
However, a common mistake that many people make is assuming that Bitcoin is stored in a wallet. This is not true, rather, Bitcoin is maintained using public or private keys.
The public keys serve as a universal address, through which anyone from any part of the world can send Bitcoin.
The private key should be kept like that, ‘private.’ It’s kept in a Bitcoin wallet.
As a user, you can use your private key and Bitcoins to purchase products, pay for services, or even send and receive money from other sources.
Setting Up A New Wallet
Before purchasing any Bitcoin, you need a wallet to store the Bitcoin. Download a Bitcoin wallet from sites such as Coinbase or Blockchain.info, then fill out the online form provided. This process will take you less than two minutes.
Go to Coinbase.com to create a new wallet. You’ll see a screen where you’ll enter your name, email address, and password. Select the checkbox then click Sign Up.
Once you create your wallet, you’ll need to follow a few steps to secure it, link it to your bank account, PayPal, and Credit/debit card so you can start trading Bitcoin.
This is a vital step as it serves as a secondary authentication source to further protect your wallet.
In this step, you’ll be required to enter your mobile phone number, after which you’ll receive a verification code to enter on the site. Complete this action by entering the code and verifying your account.
Adding Payment Methods
After verifying your phone number, the next vital step is linking a bank account, PayPal, or Credit/debit card to transfer money to and from while trading Bitcoin.
Choose the Right Exchange For Your Needs
There are plenty of exchange options to buy Bitcoin, and all have different characteristics.
Before deciding the exchange that will best serve your needs, you need to consider the following factors:
All exchanges must comply with KYC (Know Your Customer) and AML (Anti-Money Laundering) requirements. These measures prevent money laundering, which is mostly used to fund terrorist activities.
All exchanges charge different fees for cryptocurrency transactions. Most traders look for the cheapest or the fastest way to trade Bitcoin, and the main factor they consider is the transaction fees.
3. User Friendliness
As a newbie in this industry, it is best you choose an exchange that is easy to use, and one that has good customer service, otherwise you may lose a lot of money.
4. Payment Methods
You can purchase Bitcoin with credit and debit card, bank account transfer, and cash. Some companies also pay using Bitcoin.
5. Regulatory Compliance
Ensure that your choice of exchange complies with all the regulatory requirements of cryptocurrency wallets. This is the best option to prevent loss of your Bitcoin through theft.
Identity theft can mess you up. A thief can steal all your passwords and impersonate you. Ensure you implement the 2-factor authentication feature and other security features on the wallet to secure your Bitcoin.
Exchanges are like banks. They have withdrawal limits; some have high withdrawal limits, while others have low withdrawal limits. Choose the one that best suits you.
This factor is determined by trading volume. Larger exchanges such as Coinbase and Binance have more liquidity, meaning that you can buy and sell Bitcoin at better, and fairer prices.
Choose an exchange with the best reputation. Google ‘X exchange reviews’ and see what people think about the exchange.
Check the comments individually and note all the reasons why customers think the exchange is good or bad. The most common reasons include customer service, security, and being locked out of their accounts.
10. Customer Service
This is a factor that most people overlook until something goes wrong. The customer service response time and language used are important to consider when selecting a Bitcoin exchange.
Some exchanges are not available in your geographical location or country.
Use these factors to choose the best Bitcoin exchange. Choose a Bitcoin exchange that best suits your needs. Some of the best cryptocurrency exchanges include Coinbase, Binance, and Kraken.
After creating a Bitcoin wallet and choosing the best exchange, the next step is purchasing some Bitcoin. We will use Coinbase account for this guide.
To purchase Bitcoin, scroll up to the main Coinbase page and click on Buy/Sell. A screen looking like this will pop up.
Specify the dollar amount of Bitcoin you want to purchase, and the amount of Bitcoin equivalent to that amount will be displayed on the screen. For instance, if the price of one Bitcoin is $13,627, you can purchase 0.01369407BTC at $200. Coinbase will charge you $7.67 fee, which is 3.8% of the purchase fee.
Click Confirm Buy; then you’ll see a green check indicating the purchase was successful.
Go back to the account, where you’ll see a summary of all activities, including the just-completed purchase of Bitcoin.
Although Bitcoin is homogenous, that is, its price is the same everywhere, it may vary a little in some countries, which brings about arbitrage opportunities. For instance, the price of one Bitcoin was once a 35% premium in South Korea, and 25% in India. The main factor determining this is supply and demand.
Before purchasing Bitcoins, the first step is creating an account on a secure wallet, where your Bitcoin will be held, then choosing a good cryptocurrency exchange. You should read thoroughly to make the best choice.
By following this guide, you’ll be ensured of the safest way to purchase Bitcoin.