The trade and exchange of bitcoin and other cryptocurrencies has been an increasingly growing trend for over a decade and isn’t slowing down any time soon.
Bitcoin is the dominant and favored digital currency. It appears virtually everywhere, with scads of investors and average individuals vying for methods on how to buy the bitcoin and where.
Fortunately, you’ll find a bitcoin guide in many platforms online to help you with what could be a complex process and somewhat confusing, albeit once you learn the ins and outs, it’s genuinely not so tricky. Plus, as time goes on, things become more straightforward.
The critical step is engaging in your own research and not relying on other people’s perspectives or opinions because these can become distorted, leading to misinformation. Let’s look at some of the basic information and move on to buying cryptocurrency.
The Basics Of Bitcoin Purchasing
Before attempting to purchase cryptos, it’s essential to learn a few things about the product, including what it is. Bitcoin or BTC serves the purpose of a digital asset to be used in the format of a currency.
That means you can buy the crypto, sell it, use it in the context of making purchases, payments, or transfers. Compared to fiat money or currency issued by a governing body, crypto is an entirely digital version of cash with no governmental or central banking control.
Bitcoin is the first digital currency of its kind. Its storage is secured in a blockchain network online with no sort of printing in the standard sense of traditional money. Instead, computers are linked to the blockchain creating these cryptos.
Each computer in the network validates the other transactions with bitcoin rewards for making the efforts to do so. That process references mining and is responsible for generating new bitcoin.
Each crypto created is registered and stored in these virtual ledgers within the blockchain network, where there is also a record and storage of the transactions.
Factors To Consider Before Purchasing Bitcoin As A Beginner
Many individuals are anxious to buy into bitcoin initially, but some vital factors need to be considered before diving into the process. All assets offer substantial risk and volatility, but bitcoin poses substantially more volatility with its value/price, which can rise or drop unpredictably and in significant amounts.
As with other assets, the price point depends on supply and demand. When there is a vast audience searching the market to purchase the currency, the price will increase, but when there’s a greater desire to sell off the crypto, the price point drops.
As a seasoned investor, it makes sense to purchase when the price is at a meager price and sell it when the price reaches a significant high to improve your profitability.
Remember, when you profit from any asset transaction, there will likely be taxes to contend with since the profits are considered “capital gains.” That will be based on the country you’re in.
It’s wise to speak with a financial advisor and perhaps a tax attorney in your specific location to learn your particular responsibilities when you see profits. See here for guidance on buying digital currency.
Steps To Prepare For A Purchase
Before you can purchase a bitcoin, it’s essential to prepare in order to be safe and secure from the beginning of your journey moving forward. Let’s look at the steps to follow to do so.
● Creating a wallet
The first step vital in the process is creating a virtual wallet to secure your bitcoins safely once you buy the crypto. These are also necessary components when receiving and sending the currency. When selecting a wallet, you choose either a noncustodial or custodial option.
The custodial are essentially exchanges or third parties that hold the digital tokens for you to ensure you have adequate protection and security while they hold the bitcoin. You can also feel safe knowing you can manage the currency with no fear of losing your private keys allowing another person to access your coins.
Non Custodial clients have total control over their wallets with direct access to their bitcoins with no sort of intermediary. These individuals are set up with private keys that need to be maintained in a safe and secure location with no chance of losing them.
Most of these wallets have additional security measures to ensure optimum protection.
● Where to buy the bitcoin
After setting up a wallet for adequate storage and security of the bitcoin, it’s nearly time for a purchase. There are a few methods for buying, including choosing an online exchange, purchasing from another private bitcoin individual via peer-to-peer process, or with a crypto ATM.
There are advantages and disadvantages to any method that you choose. It’s crucial to select the one that best suits your specific circumstances.
● Exchange purchase
An online exchange is a “trading platform” allowing the purchase or sale of varied cryptocurrencies. These are comparable to “forex brokers” in the fiat trading industry.
These exchanges allow the purchase of bitcoin using fiat money or using varied payment methods. Still, it’s typical to pay in a local currency using a bank wire or even a modern payment system or, depending on the exchange; you might be able to implement a credit or debit card.
The first thing to do is set up an account with registered details and photo identification for validation. After the purchase, bitcoins will arrive in the dedicated secure wallet for storing safely.
There are a number of exchanges to choose from online but look for an SSL-certified provider to ensure all transactions are encrypted, leaving them safe and private. These are a good choice for beginning buyers of bitcoin.
● ATM purchases
You can buy bitcoin via an ATM comparable to those many use to withdraw fiat cash. Bitcoin ATMs are specific to selling crypto and are not permitted in all countries. That makes it essential to check where these are allowed and where they’re not to avoid any issues when purchasing.
No ID is required when using this machine, but some might validate for security. These allow purchases by putting paper currency in the ATM or utilizing a credit or debit card. It’s also necessary to have a mobile since a password will be sent to the phone to authorize the purchase.
Once completing the purchase, the machine will inquire for the wallet address to send the currency there safely. This information can be scanned on the ATM.
Many people worldwide use these virtual tokens meaning there will always be a way to buy bitcoins from someone else. If, though, you have no peers with the crypto or none for sale, you can use online services.
These peer-to-peer services will connect people in order to make purchases from those who hope to sell some of their products.
The transaction is complete when money is deposited into the seller’s account using a method the two of you agree on, typically a bank transfer or in-person cash exchange. This method is exceptionally private and discreet over the online options, with no need for proving ID or providing personal data.
That also means the transaction is much faster since there is no confirmation necessary and no intermediaries in the mix as long as the seller is someone in your specific area.
These are the primary methods for purchasing bitcoin. There are a few other smaller options, and there are some intricacies in the processes we didn’t get into.
But again, as mentioned in the beginning, make sure that you engage in your own research to precisely learn what you want to know without influence from other perspectives and skewed opinions that might provide misinformation.
Whichever method you do choose, it needs to be straightforward, make sense for you, and meet your specific circumstances with security and safety as a priority.