Looking for a guide to buying bitcoins? Wondering where to start? People have many misconceptions about bitcoin – the first widely known and accepted cryptocurrency around the 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 a bank intermediary (and incur additional fees). It’s also much faster than sending money via bank wire or wire transfer. You can send bitcoins to someone and have them receive coins in seconds.
With all 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 a bank and withdrawing bitcoins – or going to a store and dropping in your 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 buying – so you can buy safely and securely.
First of all, even though the price might be over $2000 per coin, you don’t have to buy all the bitcoins. Most places will let you buy bitcoin chunks for as little as $20. So you can start small and go from there as you are more comfortable with how things work.
Second, this article is for general purposes only and should not be considered 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.
So here are 3 easy steps to buy Bitcoin:
#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 storage wallets.
Most people prefer to have their 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 wallet’s main website.
#2 Decide where to buy
There are several types of places to shop and each one is a little different. There are online sellers who will sell you bitcoins directly for cash (or bank or credit card).
There are exchanges where you can buy and sell bitcoins from others – much like a 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 can buy with cash and get your coins in your wallet in minutes.
Each bitcoin seller has its pros and cons. 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’s $400! So you’re paying $2400 instead of $2000).
Regardless of where you decide to shop, remember to do your research and go to a trusted dealer with a good reputation and strong customer service. First-time buyers in particular will have questions and may need additional support to help with their first transaction.
Take your time and research different places to shop before making a decision. Factors to consider include coin prices, additional fees, payment method, and customer support.
#3 Buy Bitcoin and move it to your wallet
Once you find a place to buy, prepare your funds (ie you can send a bank transfer or use your Visa to fund your account). Then wait for a good price. (Bitcoin prices are always fluctuating 24/7). Then order when you’re ready.
Once your order is filled and you have your coins, you’ll want to send them to your wallet. Simply enter your bitcoin address and ask the seller to send you your bitcoins. You should see them in your wallet within a few minutes to an hour (depending on how fast the seller ships them).
Voila, you are now a bitcoin owner. Now you can send coins to pay for other goods and services or keep them for a rainy day.
Another thing to remember: bitcoin is still in its infancy. There are big price swings and currency can be risky. Never buy more bitcoins than you can afford to lose.