So, you want a Bitcoin eh?
You heard about it in the news, learning how it can be the future of money. Now you want to take part in this digital gold rush.
Worry not, because I’ll teach you how you can grab Bitcoins in the easiest and safest way possible.
Instead of creating a long list, I decided to simplify it in just 4 simple steps. This will make it easier to remember, especially for non-techies.
Without further ado, let’s learn how to buy Bitcoins.
STEP 1: Grab Your Favorite Bitcoin Wallet
A Bitcoin wallet is where you store your “private key”, which is like an ATM pin that protects your Bitcoin balance. Once you lose or leak this key out, your Bitcoins will be lost FOREVER.
In general, there are two types of storage: Hot and Cold.
Hot wallet is designed to contain a small amount of coins and is usually the one you carry and spend with. Think of it like your leather wallet containing pocket cash that you only need for more urgent stuff.
Cold wallet, on the other hand, is a storage that carries bigger amount of coins. The analogy is like that of your bank account (w/ an ATM PIN) because it is most likely used for very important situations only.
The best practice in handling Bitcoins is to have BOTH of these storages. Like with paper money, you should only take a small portion of your BTC (enough to buy what you need) and place everything else in your cold storage (which is offline).
Now that you know the basics, let’s start choosing your nice and secure wallet. It won’t be easy researching these companies at first. But once you understand the key features, you can then pick the ideal one for you.
For HOT storage providers, I suggest you look at these websites:
- Coinbase (a great option)
- Blockchain.info (most popular)
- Jaxx (multi-currency wallet)
For COLD storage providers, here are some great products to research:
- Ledger Nano
Do take note that cold (hardware) wallets are NOT free, and you need to invest some dollars to secure large amounts of Bitcoins.
Another cold storage option that’s cheaper is a “paper wallet”, which contains both your public and private addresses. Store the paper in a secure place (like a container), and ensure that no one sees the private key except you.
Here’s what a paper wallet looks like:
STEP 2: Find a Legit Bitcoin Provider
Once your storage is set, it’s time to find places that provide Bitcoin. Just create an account in your chosen site, then familiarize yourself with the interface.
Here are some websites you can look at and study:
- Coinbase – most popular option to buy and store BTC
- CoinMama – another great website to go to
- LocalBitcoins – buy BTC by meeting up in real person
- Shapeshift – this is a place for converting Bitcoins to other currencies (Altcoins)
If you reside outside the US, then doing a Google search will display the best Bitcoin providers in your country.
How do you know if a provider is legit? Well, it’s important to read reviews first (in Google search) to learn what to expect with the platform. Get to know the founders and see if they have a great track record in business.
If possible, you should find platforms that are “user-friendly” and that allow many options. Your choice of exchange might also depend on which payment method you decide to use.
STEP 3: Decide on a Payment Method
There are many options to pay, which depend on the Bitcoin exchange you’re using. But in general, the most common methods are the following:
- Credit Card
- Debit Card
- Bank Wire Transfer
- Gift Cards
- Online Services (like BitPay and OKPay)
To make this process easy, just pick the method that resonates with your everyday life. Like for instance, if you love using credit cards to buy stuff, then use it to buy Bitcoin as well.
Make sure to follow the instructions in your exchange such as purchase fees and how they’re implemented in the process.
By the way, Bitcoin is “divisible”, meaning you can buy even in decimal amounts (like 0.015329 BTC). Depending on the exchange you’re using, there are minimum purchases that you should consider and follow.
Just so you know, the maximum supply of BTC is 21,000,000, which will be reached by year 2140. This nice property is why you can trust Bitcoin to maintain or improve its value over time (unlike banks that often devalue your money by printing new ones).
STEP 4: Grab the Coins and Spend It!
Once your purchase is complete, grab the Bitcoins and put them into your wallet. I advise you keep track of your coins and ensure that it gets delivered properly.
If successful, you can now spend your newly-bought money!
In case you’re wondering what to do with Bitcoins, here are some ideas of how you can consume it:
1. Buy physical products in online stores – Sites like Purse.io and All4BTC offer Amazon/ Ebay products in exchange for Bitcoins. Well, can you benefit from this payment mode instead of using just PayPal or credit card?
2. Arbitrage between stores and exchanges – Every online platform sells Bitcoins in different prices, so one might imagine taking advantage of these price differences and making a profit from it.
3. Invest or trade cryptocurrencies – Want to make big money? Then you should probably start investing or trading by using platforms like Bittrex, Bithumb, or Poloniex, which provide you 100’s of altcoins to play with in the market.
4. Use BTC in gambling sites – If you’re feeling lucky, you might as well play your coins in sites like Satoshi Dice and Crypto Games to win a fortune. Just remember, the odds are equal that you’ll lose everything.
5. Donate for a worthy cause – A nice way to use your digital money is by giving it to someone in need. There are many websites that accept Bitcoin donations, just make sure the site is legit.
Stay Safe When Buying Bitcoins
There it is, the 4 steps to buying Bitcoin. If it’s still not clear, my suggestion is to dig deeper into the steps I’ve given you. Do research in all the platforms I suggested and decide on the ones you can trust.
Let me warn you though, there are lots of shady sites that lure you with shiny objects. I fear that you might fall for them.
Or worse, get scammed.
As newbie buyers and users of BTC, I recommend you stay away from tempting offers that sound too good to be true.
To ensure safety, pick ONLY the leading companies in the industry or the brands that leading experts trust. Avoid hyped up services that do nothing but take away your money. That is, if you want to protect yourself from scams.
Another newbie tip: Stick to just ONE strategy in order to get things done.
If you like Coinbase for grabbing Bitcoins, then stick with Coinbase. If you choose Poloniex to trade cryptos, then get very familiar with the interface. Don’t overcomplicate the process because you can always learn more stuff later.
At the end of the day, the important thing is to get started.
So grab your Bitcoins now and start exploring the cryptocurrency world!
That’s it for my tutorial on buying Bitcoins. Feel free to ask or share some insights about the topic in the comments, and I’ll be glad to reply back.