How To Buy Bitcoin For Beginners.
Investing in Bitcoin may sound daunting and intimidating to people who have never bought Bitcoin before.
When I made my first Bitcoin purchase, I didn't really know what I was doing and I was nervous but after I placed my order, I wondered why I hadn't bought Bitcoin earlier!
In this post, I am going to guide you through the basic steps of how you can buy, hold and store your Bitcoin.
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Key Takeaway's
1) Bitcoin is the worlds most valuable cryptocurrency
2) Bitcoin's value comes from it's store of value, it's payment system and it's limited supply
3) Online exchanges such as Coinbase, Kraken and Kucoin sell Bitcoin
4) It's important to store your Bitcoin safely either on an exchange or on an online or cold Bitcoin wallet
Before I cover how you can buy Bitcoin, it's important to establish what Bitcoin is and why it is a good investment.
What Is Bitcoin & Why Is It A Good Investment?
Bitcoin is a virtual digital currency, a payment system and a transfer and store of value that's designed to be decentralized meaning that no one controls, or issues Bitcoin like a bank.
When you own Bitcoin, you are like your own bank where you can send Bitcoin to anyone completely independently who has a Bitcoin wallet.
Bitcoin is considered to be a good investment among many investors because it is seen to be a great store of value where many investors consider it to be liquid gold.
Also, Bitcoin has a limited total supply of 21 Million Bitcoin which means there is a finite supply which increases the value of Bitcoin as demand will eventually outstrip supply especially when Bitcoin becomes mainstream amongst the worlds populations.
The Steps Needed To Buy Bitcoin & Store Bitcoin
Buying Bitcoin involves a few steps, and it's important to do so from reputable sources. Here's a basic guide:
- Get a Bitcoin Wallet: Before you buy Bitcoin, you'll need a place to store it. This is what a wallet is for. There are various types of wallets including hardware wallets, software wallets, and online wallets. Each has its pros and cons in terms of security and convenience.
- Choose a Reputable Exchange: An exchange is a platform where you can buy, sell, and trade cryptocurrencies. Some popular exchanges include Coinbase, Binance, Kraken, and Bitstamp. Make sure to choose a reputable one with a good track record in security. My preferred exchange to buy bitcoin and crypto is Coinbase which is what I personally recommend.
- Sign Up for an Account: Visit the exchange's website and sign up for an account. This typically involves providing some personal information, verifying your identity, and setting up security features like two-factor authentication.
- Link a Payment Method: Most exchanges allow you to buy Bitcoin with a credit/debit card, bank transfer, or other payment methods. Link your preferred method of payment to your account.
- Place an Order: Once your account is set up and your payment method is linked, you can place an order to buy Bitcoin. You can either specify the amount of Bitcoin you want to buy or the amount of your local currency you want to spend.
- Verify Your Purchase: Depending on the exchange and your location, there might be additional verification steps required to comply with local regulations.
- Transfer Bitcoin to Your Wallet (Optional): While you can leave your Bitcoin on the exchange, it's generally recommended to transfer it to your own wallet for added security.
- Secure Your Wallet: Make sure to follow best practices for securing your wallet. This includes keeping your private keys (or seed phrase) safe, and enabling any additional security features offered by your wallet provider.
Remember:
- Stay Informed: The cryptocurrency space can be volatile and subject to rapid changes. Stay updated on news and trends.
- Security is Paramount: Be cautious of scams, phishing attempts, and always use strong, unique passwords. Consider using a hardware wallet for extra security.
- Start Small: Especially if you're new to Bitcoin, consider starting with a small investment until you're more comfortable with the process and never invest more than you can afford to lose.
- Taxes and Regulations: Be aware of tax implications in your country and ensure you comply with local regulations regarding cryptocurrency.
Always do your own research first and my advice is to only invest a small amount of money into Bitcoin if it is your first purchase so you can become comfortable with buying Bitcoin.
Once you own Bitcoin, figure out your investment strategy i.e. will you be more of an opportunistic short term investor capitalizing on the volatile price swings of Bitcoin or will you be more a of mid to long-term investor where your goal is to maximize your capital and returns over the longer term.
Whatever investment strategy you decide do your research, plan your investment strategy, start small at first and never invest more than you can afford to lose.
But most of all, have fun learning and making your first purchase of this exciting asset class!
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