Bitcoins are a crypto currency and all the rage these days. At present a single bitcoin is trading at approximately $11000 per BTC. Bitcoins have had a very turbulent journey in the last 12 years. For the first 4-5 years the value of bitcoins remained below $300 – $400 mark and then in 2016 all of a sudden the value o bitcoins started to rise as market developed more interest due to various factors. In 2017 finally, bitcoin shot to its highest value of close to $20,000 per BTC and then it crashed in 2018.
Many thought that this was going to be the end of bitcoin but the crypto currency persisted and after maintaining a steady level around $9000 bitcoin has once again shot up and it is currently trading close to $11000 per BTC.
After going through these ups and downs over the last 12 years bitcoins have strengthened their place in the market in the eyes of investors. Bitcoins are now used both as a medium of exchange and as a store of value. People use bitcoins as a currency and as an option for investment for both short term and long term trading.
After reading this you must be wondering about how can one buy bitcoins? Well it is actually quite easy to buy bitcoins but it is a shame that generally the people do not know how to buy bitcoins. Purchasing bitcoins is just as easy as ordering food online.
You will need a few things in place before you can make your first purchase of bitcoins, after that you will be able to sell and purchase bitcoins seamlessly whenever you wish.
So first things first, what do you need to be able to purchase bitcoins for the first time?
What You Need To Know Before Purchasing Bitcoin
Bitcoins are a crypto currency and just like you keep your cash in your wallet you will need a digital wallet to store your crypto currency be it bitcoin or any other crypto currency. There are many different types of crypto wallets that depend on the type of usage you have.
For amateurs, online wallets are the best as they are basically free and require no hassle. You will simply have to sign up on a site like Coinbase and then you will be able to get your online bitcoin wallet. Every bitcoin wallet comes with two keys.
- Public key: Is your public address, it is like your email address that everyone knows and uses to contact you. Other bitcoin users will need to know your public key to be able to send or receive money from you.
- Private Key: Is your authentication key, you will use this key to authenticate all of your crypto transactions.
If you want to buy bitcoins to use on the go for transactions etc then you will be better suited with a bitcoin wallet app on your smart phone, it will make matters very convenient for you. If you are looking to buy quite a high value of bitcoins then perhaps you will be better suited with a hard wallet. A hard wallet looks like a flash drive and can be carried out, therefore it is the safest way of storing your bitcoins unless you lose your hard wallet or if it gets stolen.
The next thing that you will need is a bank account with sufficient funds and credit/debit cards if you intend to purchase through cards. Needless to say that you will also require a secure personal internet connection to connect to the internet when you are buying bitcoins.
Once you have got all of these things in place, there is one more thing to do which is you will need to decide how you want to buy bitcoins. Now there are two main ways of purchasing bitcoins currently.
- Crypto exchanges
- P2P platforms
Finding A Trusted Crypto Exchange To Buy Bitcoin
The most convenient way to purchase bitcoins is through crypto exchanges. These are online platforms that serve in a manner similar to a foreign exchange, except for bitcoins and crypto currencies. Crypto exchanges are regulated exchanges so this means that whenever you sign up for you, you willingly share your data with the relevant jurisdiction the exchange is operating in. This should not be any issue if your intent is good and you have nothing to hide.
Governments cannot regulate blockchain or bitcoin but they can regulate exchanges and this is one way of making sure that illicit activities are not carried out through bitcoins. So each exchange will have its own criteria of assessing your identity. Coinbase for instance is very tough on checking the ID since it is based off USA. Binance on the other hand is not so tough, so you will have to choose which exchange you want to go for.
Once you have signed up for a crypto exchange, you are one step closer to seamless trade of bitcoins. You will now just have to add your bank details. If you are going to purchase bitcoins through a bank transfer then add your bank details and if you want to purchase through your cards then just add your card details. Generally, credit card transfers are faster but a bit expensive and bank transfers are slower but also cheaper. So this is a trade of that you will have to decide for yourself.
Once you have selected the payment method, you will simply have to head to the buy bitcoins page on your exchange and select the amount of bitcoins that you want to buy. As simple as that, after the first time you will only need to log into your exchange and go to the buy page, that`s it. That is how easy it is to buy bitcoins.
P2P Platforms For Buying And Selling BTC
P2P platforms are for people who do not want to share their personal information with governments. A P2P platform is where buyers and sellers of bitcoins come together to trade and this means that there is a risk factor involved. There is a real counter party risk that the seller may not make good on his payment after receiving yours. P2P platforms therefore have rating mechanisms to rate the past history of the seller. P2P platforms may also have higher rates because the bitcoins there are offered by private sellers, so they can basically charge whatever they want. Interestingly, P2P platforms have historically seen more traded volume of bitcoins as compared to exchanges.
So these are the two of the most common ways to purchase bitcoins. It may take a while to get through your first purchase but once you are done, your next transactions are going to be so quick and convenient that you will wonder why you didn’t do this before.