Looking for a guide to buying bitcoins? Wondering where to start? People have many misconceptions about Bitcoin, the first widely known and accepted cryptocurrency in the entire world.
Many people think, for example, that only hackers and shady people use it. However, Bitcoin is actually going mainstream, with everyone from TigerDirect to Expedia.com to Dell and even Subway now accepting Bitcoin payments.
Why so popular?
Well, Bitcoin has many advantages over other currencies. For example, you can send bitcoins to someone as payment without having to go through the banking intermediary (and incur additional fees). It’s also much faster than sending money via bank transfer or wire transfer. You can send bitcoins to someone and they will receive the coins in seconds.
With all of this, it’s no surprise that many people are now trying to buy Bitcoin for the first time. However, it’s not as easy as going to your bank and withdrawing bitcoins – or going to a store and picking up some hard-earned bitcoins.
The system works a little differently than that. This Bitcoin Buying Guide will go over a few things you need to know before you buy – so you can buy safely and securely.
First, even though the price can be over $2000 per coin, you don’t have to buy an entire bitcoin. Most places will let you buy bits of bitcoin for as little as $20. So you can start small and go from there when you feel more comfortable with the way things work.
Second, this article is for general purposes only and should not be taken as financial advice. Bitcoin can be risky and before making any purchase you should consult your financial advisor to see if it is right for you.
Here are 3 easy steps to buy bitcoins:
#1 Get a Bitcoin wallet
The first thing you need to do before buying your coins is to get a virtual wallet to store your coins. This wallet is a string of text that people can use to send you bitcoins.
There are a number of different types of wallets, including ones you download to your phone or computer, online wallets, and even offline cold storage wallets.
Most people prefer to get a wallet on their phone or computer. Popular wallets include Blockchain, Armory, Bitgo MyCelium and Xapo.
This is usually as simple as downloading the wallet to your phone as an app or downloading the software to your computer from the main wallet website.
#2 Decide where to buy
There are several types of places to buy, and each one is a little different. There are online sellers who will sell you bitcoins directly for cash (either bank transfer or credit card).
There are exchanges where you can buy and sell bitcoins from others – much like the stock market. There are also local exchanges that connect you with sellers in your area who want to sell.
There are also ATMs where you go to shop in cash and get your coins delivered to your wallet within minutes.
Each Bitcoin seller has its advantages and disadvantages. For example, ATMs are great for privacy, but they will charge you up to 20% on the going rate, which is ridiculous. (At a BTC price of $2000, that $400! So you pay $2400 instead of $2000).
No matter where you decide to buy, be sure to do your research and go to a trusted seller with a good reputation and good customer service. First-time buyers will especially have questions and may need additional support to help them with their first transaction.
Take your time and research the different places to buy before you decide. Factors to consider include coin prices, additional fees, payment method and customer service.
#3 Buy Bitcoin and move it to your wallet
Once you’ve found a place to buy, prepare your funds (ie you can send a wire transfer or use your Visa to fund your account). Then wait for a good price. (Bitcoin prices always fluctuate 24/7). Then place your order when you’re ready.
Once your order is fulfilled and you have your coins, you will want to send them to your wallet. Just enter your bitcoin address and have the seller send you your bitcoins. You should see them appear in your wallet within minutes to an hour (depending on how quickly the seller ships them).
There you go, you are now a Bitcoin owner. You can now send coins to pay for other goods and services, or keep them for a rainy day.
One last thing to remember: Bitcoin is still in its infancy. There are huge price swings and the currency can be risky. Never buy more bitcoins than you can afford to lose.