How to Buy Bitcoin: The Ultimate Guide

How to Buy Bitcoin: The Ultimate Guide

Now there is no sign that the Bitcoin industry is going to slow down or decline. Given the trend towards increasing in bitcoin value, the average person still doesn't understand how to buy and sell this currency. Even if you don’t want to rely on this crypto trend, investing in Bitcoin can be a good strategy to diversify your savings and potentially to raise more capital.

Where to Buy Bitcoin

If you don’t know where to start buying bitcoin - you are at the right place. The vast number of bitcoin exchanges makes it challenging to pick the best options. In 2014 there were only six largest trading services, today we have more than two hundred. That’s why there is no surprise that people are becoming confused when it comes to buying bitcoins.

Our top trading bots

Below is a table that summarizes all the largest exchanges to buy and sell bitcoin. The sites are ranked according to such parameters as a fee, ease-of-use, available payment methods, and reputation. The last column, ‘reputation,' is based on user reviews found on different forums. The sites also differ by ways to deposit money. Some of them have several methods while others have only one.

Choose the Wallet Type

We believe that this step is one of the most important when it comes to acquiring Bitcoin. Finding a safe storage can be a difficult task considering the number of parameters to deal with. In fact, the most convenient web wallets are commonly the most insecure. Luckily there are a lot of other safe options to store your bitcoins.

In the table below you can choose the best alternative regarding safety, convenience, and cost. As a rule, the safest wallets are usually those where the private keys are kept hidden from the outside world.

Sign Up for a Bitcoin Wallet

Before acquiring Bitcoin, you have to download a Bitcoin wallet or install it on your smartphone. Then you have to fill out an online form with your details.

Before buying Bitcoin you have to submit a series of identification documents to the trading website. Depending on the requirements, such documents may include copies of your passport, utility bills, or selfies. Several years ago, when the industry just started rising, none of the sites asked for documents. Today, in 2017 almost every bitcoin exchange is required to do full KYC procedure to get protected from cyber attacks and money laundering.

Having said that, users should be careful when looking for trading sites without obligatory identification process.

Use Money to Buy Bitcoin

As soon as you sign up and have a wallet, you can use a traditional credit card or a bank transfer to buy your first bitcoin. Some trading companies like Coinbase have an option to connect your bank account to your Coinbase wallet which significantly facilitates the future transfers. The site also offers to buy bitcoins automatically at regular intervals. For example, if you want to buy $100 in bitcoin every month you can set up an automatic buy for that amount.

However, take into account that if you set up an auto-buy, you will not have control over the price of a bitcoin due to the market fluctuations. Another issue is that when you buy from trading firms rather than from Bitcoin exchanges, you can face delays when executing orders. Thus, for traders, it is more reasonable to buy directly on bitcoin exchange such as BitStamp. There you can trade with other users and avoid mediators. There is a higher liquidity and absolutely no problems when it comes to finding another person for a trade. The fee starts at 0,5% and goes down to 0.2% depending on the sum you have traded in the previous month.

Where is Bitcoin Stored?

Technically bitcoins are not stored in a wallet. They are not kept anywhere. Bitcoin balances are maintained using private and public keys which are the numbers linked through an encryption algorithm. The public key is like a bank account and can be compared with ATM PIN. It is aimed to be kept in secret and is used to verify bitcoin transactions.

Hot vs. Cold Wallets

You may have heard of hot and cold wallets. The easiest way to describe the difference between a cold and hot wallet is the following: unlike the cold wallets, hot ones are connected to the Internet. Most people who use cryptocurrency possess both cold and hot wallets as they are designed for different purposes.

Today almost every bitcoin exchange is required to do full KYC procedure to get protected from cyber attacks and money laundering.

Hot wallets resemble checking accounts while cold wallets are more like savings accounts. When users want to have some assets to spend in the nearest future, they usually keep a certain sum of money in their hot wallets for buying things. At the same time, they can keep most of their digital assets in their cold wallets.

Hot wallets are designed to do transactions on the go. For example, smartphone, web and desktop wallets can be called “hot” wallets. On the other hand, cold wallets are not connected to the Internet, and all private keys are kept offline. That’s why people use the terms “offline” and “cold” interchangeably. Without an Internet connection, cold wallets are more secured from cyber attacks and are less vulnerable to data leakages.

Conclusion

Having that said, you can learn by yourself after testing several different places. Thus you can decide the most suitable service. As soon as you have tried all the options, you can make the right decision and choose your favorite site to purchase Bitcoin.

Questions, Issues, And Procedures Of Crypto Wallets Explained
The world of crypto finance is growing rapidly with every single day and new wallets keep appearing. If you want to buy crypto, you need to know how to...
An Ultimate Guide About Crypto Trading Risks
Why Is It Important To Analyze The Market And Its Trends? Since the concept of cryptocurrency and trading is quite new, it has become crucial to analyze...
How Does Ethereum Work?
The significant growth of the revolutionary invention and the second biggest digital currency, Ethereum (ETH) wasn't unnoticed, making a lot of people...
How Does Blockchain Technology Work?
The blockchain is certainly one of the best new technologies since the invention of the Internet. It allows us seamlessly exchange currency without any...
Studying Time: Top 10 Books About Bitcoins and its Ilks
You live, and you learn, – teaches the old saying. It remains relevant especially in the era of emerging technologies, and it is not an exception when...
The Reasons to Use a Blockchain
Blockchain is not just a technology; it is a revolution in itself. Just the way email sabotaged the postal service system, blockchain is going to supersede...
7 Things You Can Do with Blockchain
According to Gartner’s Hype Cycle 2017, blockchain technology is among those that promises us a bright future. By this stage, everyone has heard about...
What is Bitcoin and How Does it Work?
The main difference between such payment networks as Visa or Mastercard and Bitcoin is that there is no self-ownership. Instead of being guided by a single...
What is Blockchain Technology and How Does it Work?
That’s why imagine blockchain as a technology that keeps track of every digital transaction that happens online, whether it is an exchange of goods and...
Bitcoin Mining Pools – the Way of Earning Money in the 21 Century
The twenty-first century dictates the new lifestyle rules for people all around the world. Nobody wants to leave the house and work for getting money....
Major Services that Accept Bitcoin Payments
As the most powerful cryptocurrency is slowly taking over the online market, there are many merchants, small shops, big online stores, and retailers who...
Ethereum Proof of Work vs. Proof of Stake
All the miners, BTC holders, and cryptocurrency traders have to encounter the terms " proof of work " and " proof of stake " at some point. These two...
What is the Difference Between Blockchain and Database
For many of those wish to know the difference between Blockchain and a database, it is best to start by simply explaining that they are different in design,...
Creating a Bitcoin Paper Wallet
Cryptocurrency wallets usually consist of two keys. A public key represents user's wallet address on which other users send Bitcoins. A private key is...
How Can I Sell Bitcoin?
As Bitcoin is volatile, and its value changes all the time, once you hit the right price and sell it, your Bitcoin wallet may contain less funds than before,...