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Bitcoin has experienced incredible growth since its initial launch in 2009. If you've never purchased Bitcoin before or are new to the world of cryptocurrency, you might be curious how you can start your Bitcoin purchasing journey.
If you are looking to purchase Bitcoin, you must have a reliable and safe source and understand the risks, benefits, and information you'll need to complete your transaction. This blog post will teach you how to buy Bitcoin, what pitfalls to avoid when buying Bitcoin, as well as the best places to get your first Bitcoins!
Bitcoin is a cryptocurrency and digital payment system created in 2009 by the pseudonymous developer Satoshi Nakamoto. This peer-to-peer electronic cash system can be used to send payments of any amount between two parties without requiring a third party like a bank or financial organization to move funds. Instead, Bitcoin transactions are made when people involved in the transaction have agreed to accept Bitcoins as an alternate form of currency for trade.
Bitcoin exists only digitally, so no physical coins are being minted from gold reserves below ground or printed on pieces of paper. Instead, this currency has been encrypted using open-source cryptography, also known as "cryptocurrency."
There are a lot of risks when it comes to purchasing Bitcoins. The first and most obvious risk with this currency is that you might never receive them at all. After paying for your purchase in cryptocurrency, you might find yourself stuck waiting endlessly without any word from the seller on whether or not they received your payment. This is why it's always essential to use a reputable selling and buying crypto source to ensure your investment is protected.
Another major downside to using Bitcoin is that its value frequently fluctuates (more than many other currencies because there's more trading). What may have been worth USD 100 could be worth only USD 90 just hours later if another user decides to sell their Bitcoins off the market? Lastly, once you've purchased some Bitcoins, there's the worry that somebody might get ahold of your public key and be able to steal them from you.
While there are always risks to purchasing Bitcoin, there are also a ton of benefits. One of the significant advantages of using this currency is that it's decentralized. This means no single entity controls how Bitcoin operates, and there's also a limit on just how many Bitcoins are in circulation at one time.
Another advantage to using Bitcoin is anonymity. Every transaction between two people will need an address each person has control over. Still, these addresses aren't linked with any personal information about either party unless you choose for them to be (unlike credit card transactions where your name could go up as part of a public record if you don't do anything). Lastly, because the value fluctuates so much, those who invest their money in Bitcoins have more opportunities for profit than by investing in other currencies.
Suppose you are looking to invest in Bitcoin. In that case, it's best to only purchase an amount that will make sense for your budget and financial situation. Bitcoin cryptocurrency has the potential for tremendous growth and an equally high risk of enormous losses if purchased at too high a price point.
You can purchase as little as $100 of Bitcoin or spend hundreds of thousands of dollars on your cryptocurrency purchase. However, before purchasing, you should check the market value, if it's growing or declining in value, and the economic situations surrounding Bitcoin before purchasing your cryptocurrency to ensure you're making the right decision with your money.
The price of cryptocurrency is constantly changing. It can fluctuate within minutes, hours, and days since it is influenced by the number of buyers and sellers participating in the market. Currently, it costs USD 46,129 for 1 Bitcoin.
If you've decided that cryptocurrency is the right investment for you, it's time to learn how to buy Bitcoin. It doesn't have to be overly complicated to get started in your Bitcoin journey. We've broken up the Bitcoin and other cryptocurrency purchasing process down to four easy steps.
1. Decide Where to Buy Bitcoin
The first step is to decide the best place to buy Bitcoin. This is one of the most important decisions you can make because it determines how safe a transaction you will have and how fast you'll receive your funds. In this section, we'll break down the most common places to buy Bitcoin, including cryptocurrency exchanges, traditional stockbrokers, and other ways to purchase or invest in Bitcoin.
Cryptocurrency Exchanges - Pros and Cons of Using Them
One of the easiest ways to buy Bitcoin is through a cryptocurrency exchange where sellers and buyers meet to trade. Exchanges have transaction fees in place that are usually lower than traditional stockbrokers and offer speedy transactions with their "instant" purchase program, which can be completed within five minutes. Some examples of popular cryptocurrency exchanges include Coinbase, Binance, eToro, and Kraken.
The downside to using this type of service is that it's not as reliable or safe as some other sources on the market. In addition, as many exchanges use third-party services for security purposes, they're susceptible to hackers who may be able to access your account information if you store them there too long. You'll also typically pay higher fees to use the online platform, which can add up if you actively buy or sell cryptocurrency.
Another way to buy Bitcoin is through a traditional stockbroker, which can be much more expensive. If you are looking for the fastest transaction times with this option, it's best not to use their "instant" purchase program as they're usually slower than what cryptocurrency exchanges offer. Furthermore, there will likely be higher fees because brokers have overheads that need to be covered.
One major downside of using these types of services is that you'll need your bank account or credit/debit card attached to them before being able to add funds, so if you don't already have one set up, then this type of service may not work well for you.
The positives of using this type of service are that they're convenient and well-known, so you don't have to worry about buying off a relatively new platform or a site with no history of successful transactions. Platforms like Webull and Robinhood are famous for this type of service.
Other Ways to Buy or Invest in Bitcoin
You don't need only to choose these two options to buy Bitcoin. One of the most popular ways to purchase or invest in Bitcoin is to use a Bitcoin ATM. This is a physical machine that you can go to and exchange cash for cryptocurrency. You'll need your Bitcoin wallet address as well as the phone number attached, which is used to verify transactions on this platform.
Another option if you're looking for something beyond just buying Bitcoin with traditional currency is mining software. This type of service typically involves purchasing shares from a company that provides hardware or cloud-based services; those companies provide processing power, so their customers can mine Cryptocurrency like Ethereum, Monero, Ripple XRP, and other systems all day long.
The final way to buy Bitcoin (or another form of cryptocurrency) would be through an Initial Coin Offering (ICO). Some professionals see ICOs as the future of investing because they're not linked to any country or currency. As such, there are no regulations on this type of investment, so you'll need to consider when deciding which one may be best for you.
The upside to using these types of platforms is that it's easy. You have to buy tokens to invest in an ICO and then wait until the company releases their product before selling them off at a higher price point. The downside is that they may become a dud or have short-term gains without any long-term success.
What to Know Before You Buy
Before you buy Bitcoin, it's essential to understand what your short-term and long-term goals are. For example, suppose the value of cryptocurrency is going down in price. In that case, this option may not be best for you, but if you're looking for a safe investment that can go up substantially over time, it might work well as part of an overall portfolio.
If you want to purchase Bitcoin with US dollars but don't have enough to buy an entire Bitcoin, some platforms offer fractional shares, so there will still be enough capital on hand to make the transaction happen successfully without incurring any additional fees. However, many people find this type of service frustrating because they don't know how much money they'll end up with by making a trade before they do it, so it's best to do your research before committing.
2. ++Decide How to Store Bitcoin
For you to keep your investment safe, you'll need to find a way to store your cryptocurrency through a wallet. A wallet is essentially an account where people can store their Bitcoins to protect them from thieves or hackers. If someone gets access to your private key or password, they'll have complete control over any Bitcoins associated with this address.
What to Know Before You Buy
This is why all reputable cryptocurrency trading sources require users to set up a "wallet" on their website, so they know how much money you're going into and out of at all times! There are two main types of wallets to choose from when purchasing Bitcoin, including hot wallets and cold wallets.
A hot wallet is a mobile, desktop, or web-based wallet that is connected to the internet. Hot wallets are popular because they're easy to use and accessible from multiple devices. However, this can also be a downside because your information is on the internet. As such, it's considered less secure than cold wallets because you have to worry about hackers getting control of your personal information.
A cold wallet is one where individuals store their Bitcoins offline and aren't associated with any other devices, so they're more protected from hacking attempts. They're often sold with software that protects your information and allows you to view your investments without exposing data like your private key. The downside? You'll need to take care not to lose this device! If you happen to misplace it, then there will be no way for you to recover those funds if that happens (unless otherwise noted by the company).
3. Make Your Purchase
Once you've got your wallet sorted out, the next step is to buy Bitcoin. The easiest way to do this would be through an online exchange where buyers and sellers come together to make a trade directly with one another.
However, if you don't want any hassle, then some platforms will let their customers purchase cryptocurrency from them, so they can store it for their safety until they're ready to spend it or trade it away again. If you decide on this option, keep in mind that these services may charge fees depending on how much money transfers between accounts (and what type).
If you want the easiest option, you might want to consider purchasing or selling Bitcoin through a Bitcoin ATM. A Bitcoin ATM is similar to any other ATM that you might find in your neighborhood, but this one accepts Bitcoin and has been programmed to withdraw the money for you.
There are only a few of these machines out there, so it won't be an option if they're not located near where you live or work. Also, some people prefer to buy Bitcoin with cash because they want more anonymity. Buying with different cards can make them suspicious about what someone is doing (though many platforms allow their users to purchase cryptocurrency anonymously).
4. Manage Your Investment
Once you've purchased Bitcoin, the next step may be to find a way for it to grow.
Some people like investing in cryptocurrency because they believe that its value will continue to go up, so rather than seeing these investments as purchases of currency with specific values, they're more like long-term bets on what will happen over time. If this is your goal, then there are ways you can make money from owning Bitcoins without actually spending them (by trading or lending).
Once you have cryptocurrency, you can also choose to sell at any time you see fit. However, before selling it, remember that there's no guarantee of what the price will be when you try to buy back in, so it may not always work out as you hope.
Should you buy Bitcoin?
It's normal to wonder if Bitcoin is a suitable investment for you. While it's certainly not guaranteed, the growth potential is high. If you're willing to take on some risk, there are a lot of opportunities! Before you consider purchasing Bitcoin, make sure you have a wallet and at least some idea of managing your investment. Once you're ready, go ahead and buy your Bitcoin today through Paydepot's online platform.
Disclaimer: The information provided contains opinions of the author or editorial staff regarding investment, tax, or financial information. Such articles are provided for general informational purposes only and do not purport to provide specific legal or other professional advice. This information provided is in no way a solicitation to sell or purchase cryptocurrencies in any way. The recipient agrees that the authors, owners, and publishing agents of this article have no liability whatsoever for the material presented here, as we do not offer any brokerage or advisory information.
PAYDEPOT doesn’t give any advice or recommendations. For financial advice, contact a professional consultant.