A Beginner’s Guide to Buying Bitcoins Online in 2019
Buying bitcoin doesn’t have to be a mystery. In fact, the process of buying bitcoin involves a few simple steps. As you consider how many people have decided to invest in the digital currency, you quickly understand that buying bitcoins is very difficult.
You can buy bitcoin instantly with government-backed currency in the form of cash, credit card, cashier’s check, and more. But, prior to the instant purchase, you should decide where you will store your bitcoins to keep them safe.
This guide will teach you how to buy bitcoins from reputable places and how to store them safely:
- Understand what bitcoin is
Bitcoin is a digital currency that is not backed by any government insurance. Because the digital currency is not connected to any specific nation, it does not have to follow the same rules and this makes is safe and easy to use. In the digital world, bitcoin has grown in value, which has made investors very wealthy.
Just like any investment, buying bitcoin comes with a risk. The cryptocurrency could increase in value, or the value could bottom out at any time. Since there is a risk, it is important that beginners do not put in more money than they can lose.
- Choose from an online or offline wallet.
With traditional investments, you keep your money in a bank or with an investment company. This is not necessarily the case with bitcoin. Before you buy bitcoin, you should have a solid understanding of how bitcoin works and where you should store it until you are ready to use it or sell it to someone else.
Some storage options are free and others can have monthly fees near $100. These are the different types of storage options for bitcoins:
- Blockchain wallets
- Desktop wallets
- Hardware wallets
- Mobile wallets
- Multisignature wallets
- Paper wallets
- Web wallets
There are hot and cold wallets, with the hot wallets being connected online at all times. Cold wallets are not connected to the internet. All of the wallets have pros and cons when it comes to security. Generally, the most secure are blockchain and multisignature because there are so many steps to withdraw. The least secure are mobile and desktop because they are the easiest to hack.
Since bitcoins aren’t really coins at all, it is possible to save them on paper. Bitcoins are just numbers and letters, like a code. Some people simply write down the codes to their coins and keep them on paper. This is the basis of a paper wallet. It’s not the most secure way to store bitcoins, but it is difficult for hackers to get to them.
You want to move your bitcoins to your personal wallet as soon as possible. If the bitcoins are out there in the online world, someone could hack into the exchange or the exchange site could close down before they arrive in your wallet. It’s your money, so you need to get control of it right away.
- Understand which payment method is best.
There are several ways to buy bitcoins and they all have pros and cons. Buying bitcoin with credit cards or PayPal or Skrill can come with high fees, but if pay the fees, the bitcoins are delivered quickly to your account. If you pay with cash or through a bank transfer, you don’t have to pay high fees, but the transfer of bitcoins to your account takes a long time. You can also work for bitcoins, but it takes a long time.
If you are looking for anonymity, cash and Paypal are the best choices. The easiest way to buy bitcoins is through a credit card purchase, but this type of payment method provides zero anonymity.
Some sellers prefer that customers buy bitcoins with wire transfers. Like the other methods, there are pros and cons. For sellers, this method is less expensive because it does not come with excessive credit card fees. But, for both buyers and sellers, the process takes a long time for the money to move between parties.
- Pick a reputable bitcoin website.
Where you buy your bitcoins is important, too. Read reviews before you choose a site and be sure that you fully understand how the site works. Be sure that the site provides security for your purchase so your financial information cannot be hacked.
Sites are set all over the world and have varying degrees of fees, too. Be sure you understand exactly how they get their bitcoins. It is best to get your bitcoins instantly, so this should be a must-have for any site you choose.
There are several fees that can be associated with bitcoin websites: deposit, transaction, and withdrawal. Check them out before you commit to a transaction as these fees can affect how much you get in the exchange. Along with fees, some sites also have limits on how much you can buy in one transaction.
- Know what documents to have on hand.
Before you buy bitcoins, you will have to share documents that verify your identity. These often include a passport, driver’s license, or utility bills. Even though bitcoins are not managed by governments, there are rules about buying and selling them. Some laws require bitcoin sellers to know their customers before they make any exchanges.
These rules are in place to stop criminals from money laundering and from committing cybercrime. Without any governments being in control of bitcoins, criminals can use the currency for unsavory dealings.
As you create your account to buy bitcoins, look for a site that provides top-notch security so your identity is protected. Some sites will allow people to buy bitcoins without an id, but they may not provide much identity protection. If you want to buy bitcoins without providing identification, you might end up paying extra fees. Most people buy bitcoins through sites that take time to verify their customers’ identities. When you are ready to buy your bitcoins, have the necessary documents nearby so you can get through the process quickly.