How To Buy Bitcoin?: Important Things To Consider Before Buying Bitcoin
Bitcoin, the world’s first cryptocurrency, is enjoyed by a vast number of users out there due to the fashion of anonymity that it carries. Not only users but financial enterprises and other organizations are also adopting Bitcoin and the idea of decentralization for good. But for those who are engaging with the flagship cryptocurrency for the first time, it can be a little daunting and complicated to address the issue of buying Bitcoin.
The process is not that simple and as easier as buying any other commodity or asset; due to the implementation of the blockchain into the mix, there exists a subtle essence of complicatedness to the process of buying the cryptocurrency.
But you need not worry as the process is being made easier due to the vast adoption of Bitcoin by enterprises and organizations as more and more crypto exchanges are becoming legitimate and the introduction of the crypto wallet system, which makes it extremely easy to buy Bitcoin in real life. That is why more and more people are purchasing Bitcoin, as doing so is not entitled to complex procedures and life extinguishing barriers for the commonwealth.
Important Things to Consider Before Buying Bitcoin
If you are interested in buying Bitcoin and want to make sure that you do this the right way, you need a couple of things. First of all, you need identification documents that prove your identity and are an important factor to step into the crypto world. This is also an important element if you are using a KYC (know your customer) platform to begin with.
Later on, you need a secure connection to the internet, make sure that you don’t use public internet for this, and at the very least, you need a method of payment which can either be a direct wire transfer from your bank or could be via your credit or debit cards. You can also buy Bitcoin with the help of the P2P exchanges and from the Bitcoin specialized ATM stations too.
After encompassing all of the things, at the very least, you need to have a personal wallet that is outside of the exchange account, which will help you to secure your anonymity and such. When you get your hands on your fair share of Bitcoin or what you can afford, it is best to just not be very vocal about it. Even if Bitcoin holds not physical stature, it is still a digital cryptocurrency that is very much so spendable if someone gets their hands on your specified private key.
A private key is a passcode that validates the connection of a certain number of Bitcoins to a particular user. If a hacker gets their hands on such a key, then they can use it for the sake of authorizing transactions for various public addresses on the blockchain. Anyone using the blockchain can see the complete transaction history of the Bitcoin in its entirety, even you, but the information of the user, in this case, is basically redacted, making the platform securer and more fundamental to specific use cases.
Transactions are confidential but not anonymous, which means that anyone can tally a transaction but won’t come around the actual amount involved within the transaction or to whom did it belong and such. So, this is pretty much all you need to know about buying Bitcoin.
How to Buy Bitcoin?
- Choosing an Exchange
To be able to buy Bitcoin, all you have to do is to sign up with a cryptocurrency exchange, as it makes it easier to do so. You can buy, sell and even hold onto cryptocurrency with these exchanges. The pro tip here is to use a crypto exchange that will help the users to withdraw their crypto in their own separate wallets for the sake of safekeeping.
There are different models and tiers of these exchanges and the spirit in which these work. First of all, there are the types of crypto exchanges that allow the users to remain completely anonymous without revealing any of their identity as they don’t require them to put down any personal information of the sort. This way, the very identity of the user remains intact; another thing of grave notice here is that these exchanges are autonomous, which means these operate at the right shores of the decentralization and don’t have a central point of control or operation.
Some of these exchanges might be used for illegal activities, but the matter of significance is that these exchanges provide extreme support to the unbanked population of the world. There are certain categories or classes of people who are neglected and are called from providing bank privileges and owning a credit card and such; where would these masses go?
Tending to decentralized finance remains the only option for these people to do their finance-related chores. Coinbase, Kraken, and Geminin are the most popular crypto exchanges at the moment, and these require KYC (know your customer) authentic documents of the user to begin with.
These crypto exchanges provide you with access to Bitcoin and other various altcoins such as Ether, Dogecoin, and many others. It simply means that you can very well buy, sell or trade various cryptocurrencies after signing up with these exchanges. Abide by safe internet practices when creating an account on one of these crypto exchanges, or otherwise, it will not be a secure interaction to begin with. Secure your passwords, never use public bandwidth and try to use a VPN if you can to mask your online presence.
- Connecting the Exchange to a Payment Option
Even if you have secured an account on a crypto exchange, you still won’t be able to buy, sell or even hold onto any cryptocurrency unless you connect your exchange with a suitable payment option. This entails providing the exchange with all of your personal documents so they can authenticate you as the user of the account.
This might include the pictures of your driving license, your social security number, information about your employer, and the source of funds for you, and this might vary from exchange to exchange. There might be two or three points hit or miss depending on the region that you live in and the legal requirements there. The process, however, is the same, which is just like opening a typical brokerage account.
When all the documentation and the verification are completed, only then you get to connect a payment option with your exchange. Most exchanges that don’t go by KYC (know your customer) protocol might not advise you to attach your documents for the sake of verification, and that is the main reason that these options are all out of trust and why you should only go with the exchanges that come around the KYC protocol pretty strongly.
You can majorly connect your bank with the exchange, but this way, all the transactions that you do will be wire transfers and might take 3-5 days to complete, but you can also choose to connect your debit or credit card and make the process a whole lot faster. Using your credit card to be able to purchase cryptocurrency is something that is frowned upon due to the volatile nature of the cryptocurrency and the bad credit score that it can leave on your credit card. That is why preferably use a debit card or a direct bank transfer.
Although Bitcoin has a legal status in the USA still there are some banks that don’t take too kindly to the request of using their service for the sake of buying or selling the idea of cryptocurrency. That is why the best course of action would be to check in with your bank if they allow the purchase of cryptocurrency or not; this is a precaution that you should heed instead of going mindlessly by integrating your bank account with a crypto exchange that doesn’t even recognize or support.
Fees that the crypto exchanges heed is another factor that you need to be extremely careful about is Coinbase is going to charge you a flat rate of 1.49% for bank accounts and about 3.99% for both the debit and credit cards. It is extremely important that you get to do a complete and thorough research of this factor before engaging with it. It is possible that you might come around with an exchange that charges affordable rates down the line compared to the one you are working with right now. It is better to take action than to regret it in the end.
- Placing an Order
When you have made an account with a crypto exchange, successfully completed the document verification, and have enabled a payment option with the exchange, you can easily buy/sell Bitcoin or any other cryptocurrency for that matter. In recent years or so, the idea of cryptocurrency and exchanges have become more mainstream.
People are using it to trade on cryptocurrencies and even send and receive these crypto tokens from one place to another. This likely attention that these exchanges are getting from the people is due to the vast reference of the features that these exchanges provide you with.
This was a market that was considered a scam or a place to rob people of their real money for a bunch of digital coins, but that attitude is now slowly shifting and changing remarkably. The crypto market in itself is worth more than the forex or the stock market, and this is simply the dawn for the cryptocurrency; who knows what likable feats it will be able to complete in the future.
These exchanges are not only legit in their operation but have also managed to bring the attention of many key financial figures in doing so, such as the likes of Elon Musk and Mark Cuban, to mention a few. The amount of features and their intensity progressively varies and might even be the same as the stock counterparts of these exchanges, which is definitely a feat worth accomplished.
Once you have attached a payment option with the crypto exchange that you have earlier signed up for, you are all good to go. Today you can come around a variety of order types and different ways to invest in a crypto market plus the value that you will get for your investment is remarkable with these crypto-based exchanges, but there is one thing to consider, which is the volatility of the crypto market and seeking shelter with these exchanges as they definitely know how to minimize its intensity.
- Store your Bitcoin in a Safe Place
Even if you want to store the newly bought Bitcoin for the sake of a single minute, you need to have a safe repository to be able to do that, and that comes along in the form of wallets. These digital wallets are a safe place to dump your Bitcoin or other types of cryptocurrencies and access them whenever you want through safety protocols, which means no one else can steal them from you or anything of the sort. Against all odds, you can rest be assured that your investment in the form of digital tokens is, in fact, safe.
If you don’t trust an exchange or find it difficult to entrust them to safeguard your precious property, then going with the wallets seems like a safe thing to do. There are different types of wallets that you need to know about. There are some that can only store Bitcoin and so are known as the Bitcoin-only wallets, some are known as hot wallets that are online, and the other cold wallets stay off the grid in the form of hardware wallets like a USB stick or some other storage carrying media serving as a cold wallet having your finance in the form of the crypto tokens safe and sound inside.
The main benefit that you can have with the cold wallets is that they will always remain in your access, but so they can also be stolen or ripped from your hold like any other materialistic property there is. That is why it is best that you have a hot wallet that is only going to give you access to your precious crypto tokens once connecting with a proper web address through a computer or something else. It might not get stolen or ripped from your hold, but there still exists the chance that it might get hacked.
How to Buy Bitcoin with PayPal?
It might be possible that you don’t have any other means to invest in your crypto acquiring idea other than the use of PayPal. Many scenarios could lead to this effect, such as your bank not supporting the idea of the cryptocurrency or you only have access to PayPal as a source of the payment option.
Yes, you read it right twice the word PayPal, as due to the massive adoption of the cryptocurrency and blockchain technology, the phenomenon has found its way right towards PayPal, and the payment service has adopted it and, in fact, oriented it to a different section of the same wallet where users stuff their fiat.
If you make a PayPal account right now and proceed to your digital wallet carrying your finances, then you might not only come around your fiat money but also around how much balance that you have in terms of crypto. Any cryptocurrency that you purchase will be reflected here. But to be able to have such an account, you would have to sign up for one with PayPal. The first thing that you need to do is to get around the following sums with you;
- Current balance within the PayPal account
- A debit card that is linked to your PayPal account
- A bank account that is linked to your PayPal account
As already mentioned, you can’t use a credit card for the sake of buying Bitcoin with it because of the volatility of the crypto market; it won’t stick. The volatility of the crypto market makes the prices change in a matter of seconds and minutes, and that is why you can’t use a credit card, and debit is the only workaround that actually works.
Although you can buy Bitcoin with PayPal, you can’t trade it or sell it for profit; you can only make transactions from one account to another. So, if you are trying to use PayPal to trade crypto as you would do in any normal exchange, you must use your time wisely and succumb to some other exchange.
Buying Bitcoin is not as complicated as it once was, and a lot of the credit goes to the refinement of the technology and the handsome adoption that Bitcoin enjoys at the moment. However, it is important that you are extra careful when it comes to the subject of cryptocurrency and only trust the judgment of the exchanges that are properly registered and accredited with the regulating bodies.
Buy, sell and hold onto Bitcoin and many other cryptocurrencies in your own struggles of making it a successful endeavor and see the difference along with the false predicaments of the past around cryptocurrency fade.