Looking for a guide to buying bitcoins? Wondering where to start? People have a lot of misconceptions about bitcoin – the first widely known and accepted cryptocurrency worldwide.
Many people think, for example, that only hackers and shady people use it. However, bitcoin is actually going mainstream as everyone from TigerDirect to Expedia.com to Dell and even Subway now accepts bitcoin payments.
Why so popular?
Well, bitcoin has many advantages over other currencies. For example, you can send someone bitcoins as payment without having to go through a bank 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 have them receive the 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 simple as going to your bank and withdrawing bitcoins – or going to a grocery store and dropping in some hard-earned bitcoin cash.
The system works a little differently than that. This guide to buying bitcoins will outline a few things you need to know before buying – so you can buy safely and confidently.
First of all, even though the price can be more than $2,000 per coin, you don’t have to buy a whole bitcoin. You can buy bitcoin chunks for as little as $20 in most places. So you can start small and work your way up as you like the way things work better.
Second, this article is for general purposes only and should not be construed as financial advice. Bitcoin can be risky and you should consult your financial advisor before making any purchases to see if it is right for you.
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 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 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 transfer or credit card).
There are exchanges where you can buy and sell bitcoins from others – similar to 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 buy with cash and get coins in your wallet in a few 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 top of the current price, which is ridiculous. (At a BTC price of $2000, that’s $400! So you’re paying $2400 instead of $2000).
No matter where you decide to buy, remember to do your research and find a seller you trust with a good reputation and good 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 buy before you make your decision. Factors to consider include coin prices, additional fees, payment method, and customer service.
#3 Buy Bitcoin and transfer 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 card 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 fulfilled and you have your coins, you will want to send them to your wallet. Simply enter your bitcoin address and have the seller send you your bitcoins. You should see them appear in your wallet within a few minutes to an hour (depending on how quickly 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 rainy days.
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.