You can do all of the research and reading that you want, but one of the best ways to understand Bitcoin and other cryptocurrencies better is to simply get out there and buy some so that you can spend it to try them out. In the guide below, we have included instructions on how you can buy Bitcoin.
We always recommend that everyone buys a dollar worth in the beginning as an interesting learning experience. Whether you go further than this and decide to invest more of your money into Bitcoin is completely up to you.
The first thing that you will need learn about purchasing Bitcoin is that it requires two things. You will need a place to purchase it, otherwise known as an exchange, and you will need a place to store it, otherwise known as a virtual wallet.
Purchasing Bitcoin is similar to buying other forms of currency, except that everything gets done online. You don’t go down to your local Western Union.
How to Get a Bitcoin Wallet
One of the best wallets to invest in for your Bitcoin currency is Coinbase. however, we do need to let you know that it’s actually the worst wallet choice from a security point of view, but the reason that we recommend it is that it’s a great option for beginners.
This is because it is an exchange platform and a wallet all rolled into one so that it makes the entire process of buying Bitcoin, in the beginning, a lot easier.
The thing about purchasing Bitcoin is that you own the money, and no one can take this from you. However, the only way that you can guarantee this is if you have something called a private key, which is like the password to that money. Unlike other wallet options out there, Coinbase stores your private key for you. For a lot of people, this is really helpful, because if you lose your private key, then you lose your money.
However, the danger of this is that if you get hacked somehow, you will lose your money. Also, if this particular wallet company goes bankrupt, then you will lose your money. If a government out there like the American government decides that they can’t operate anymore, you’ll lose your money.
All of these scenarios are possible, so at the end of the day, we think that Coinbase is a great option for getting started and learning, but if you want to put vast amounts of Bitcoin into it, then we suggest you try something else.
Set up Your Account
Remember back in the day when you got a bank account for the first time? It might have seemed easy at the time, but looking back on it, the process was probably pretty exhaustive. Of course, you had to turn up at a brick-and-mortar bank branch, and you also had to show up when the bank was open, during the middle of the day.
You had to present them with a photo ID, and if the manager that was in charge of creating new bank accounts wasn’t there, you would need to come back another day. You had to fill out a form and sign it so it could be stored away with your information on it.
You had to do all of this to just have somewhere to store your money. Getting set up to purchase cryptocurrency is not that different, it’s just that everything is done online. Just remember this when you get frustrated at certain times.
The first thing that you will need to do is to fill in the boxes and verify your email address like you would with any other app that you download onto your smartphone. Then, select the green button that says, ‘get started’.
Coinbase by law needs to verify your identity, just like the bank. This is why you will need to take a photo of your ID, and then verify that you are human. The process of verifying your identity could take a couple of minutes, a couple of hours, a few days, or even weeks.
You really don’t know how long it’s going to be, so if you are in a hurry to buy, you need to set up your account straight away.
Link to a Money Source
In order to buy cryptocurrency, you will need to come up with a way to pay for it. You will need to add a payment method to your account, just like you would add a credit card to an Uber account, for example. You will enter either your credit card or debit card, but don’t be surprised if your bank blocks the transaction initially.
This is because Bitcoin and other cryptocurrencies are seen very differently around the world, so depending on where you are, your bank might not like the idea of you purchasing it.
Buy Your Bitcoin
Select where it says ‘accounts’ at the bottom of the app. You will see a list of many different types of cryptocurrencies. These are all cryptocurrencies that Coinbase offers on their exchange. If you don’t see the cryptocurrency that you want to buy here, then you will need to sign up for a different app. Bitcoin might have the initials BTC.
Now, one of the most important rules of buying cryptocurrency is to only invest what you’re willing to completely lose. For people that have been trading Bitcoin for a while now, they are used to watching half their investment disappear overnight. The reality is that it’s going to happen to you because this happens to everyone.
This is the downside to investing in such a volatile market. If you can’t handle this aspect, or you need your money to stay at the value it is right now because you might need it in the short term, then we don’t suggest that you invest in Bitcoin right now.
The other thing to consider is that cryptocurrency is still taxable as capital gains or income. This is why you need to start tracking your sales and purchases right from the beginning, or you will find yourself in a mess when it comes to tax season.
The Fun Part
Congratulations – you now have some skin in the cryptocurrency game. You have signed up for a platform that has some of the world’s most brilliant minds, and you have allowed yourself access to technology that is completely transforming the financial industry and disrupting some of the most traditional societal systems that we know. Before you go though, we’ve got one more tip to share with you about cryptocurrency trading.
We’ve talked a lot in this article about how cryptocurrency trading is not for the faint of heart, and you’ve got to be prepared to lose it all. If you are someone who isn’t a mathematics aficionado, then you could very well end up struggling to work out how cryptocurrency works in general.
It might take you a few months or even years to learn exactly how cryptocurrency works, and even then, you might still miss out on great trading opportunities because you’re not as knowledgeable as some other people out there.
This is where we have to recommend that you check out and make the most of a cryptocurrency trading bot. Cryptocurrency trading bots are automated pieces of software that can streamline the exchange process, so that you can spend less time on your smartphone, and more time at your day job.
We know that you haven’t got too much time to invest in learning the ropes with Bitcoin and cryptocurrency trading in general, so we suggest that you take it one step further, and try out a trading bot.
This is going to make those beginning weeks and months a little bit easier as you learn the ropes and figure out how you can make cryptocurrency trading work for you. Good luck!