How to buy Bitcoins - A Beginner's Guide By AltcoinPlace

 

Before investing in bitcoin, it is important to know what bitcoin is and how it works

Bitcoin is a decentralized digital currency that works on peer-to-peer networks, which provides safe and efficient transactions. Bitcoin transactions occur between two people without any involvement of banks and financial organizations and authorities. Bitcoin doesn't have a physical existence, which can only be bought and owned online. The technology underlying bitcoin is called Blockchain Technology. Bitcoin gained popularity in the previous decade in 2018, and the price of bitcoin rose to $65000. In 2009, when bitcoin has first introduced the price of bitcoin was just a few cents.

Today investors show a great interest in buying bitcoins. If you are one of them, then this article is for you. At first glance, Buying Bitcoin may seem complicated for beginners, but, it is broken down into steps to make it simple and easy. This article provides a beginner's guide to buying bitcoins and storing them securely in a software or hardware wallet.

There are mainly four steps to buying bitcoins which are discussed in this article

1. Creating a wallet
2. Choosing a platform
3. Payment method
4. Transferring bitcoin to your wallet

Step 1. Creating a Wallet:

To buy and sell bitcoins you need to create a Bitcoin Wallet. There are many types of cryptocurrency wallets. For instance, software wallets, hardware wallets, and wallets on mobile phones. The wallet has a private key that is used to do the transactions. The private key is confidential and not to be shared with anyone. Otherwise, you will lose your bitcoins. Well, you might be wondering which wallet should I choose.

It depends upon the amount of the bitcoins that how many bitcoins you want to store in your wallet. However, the software wallet which is sometimes called a desktop wallet is an online wallet which means it keeps your bitcoins online. In this case, It is risky. Because there is a high risk of hacking and cyber theft. Similarly, it is the same case with smartphone wallets. Hardware wallets, on the other hand, are offline wallets. It is a USB drive device that stores your private key offline to protect it from the risk of getting hacked and cyber theft.

Now you might be wondering which wallet should I choose. It depends upon How much bitcoin you want to buy if you want to buy a small number of bitcoins then software or a mobile wallet is recommended. And if you want to buy a large amount of bitcoin then you should choose the hardware wallet, which provides more security.

Step 2. Choosing a platform or venue:

After creating your wallet, you need to find a platform where you can buy bitcoins. There are several kinds of platforms. To illustrate, Cryptocurrency exchanges, peer-to-peer marketplaces, Bitcoin ATMs, brokerage services, and Payment Apps. These platforms charge you some amount, but different platforms charge different amounts some may charge higher some may charge lower.

Cryptocurrency Exchanges

Cryptocurrency exchanges are platforms where you can buy cryptocurrency against another cryptocurrency. These platforms are mostly called trading platforms. First, you need to create your account. After making your account, you have to provide two images of your national identity card or you can use a passport as well, and a photo of yourself to match the image on the id card to verify it is you. and other personal information. Some of these platforms include Binance, Kucoin, Coinbase, Kraken, Gemini, and more.

Peer-to-Peer Marketplaces:

These platforms work as an intermediary between seller and buyer. On these platforms, KYC, short for (Know Your Customer) needs to be done, in which you need to provide your personal information and the images of your national identity card or passport. After that, you can sign a trade with another trader. after signing the trade it needs your wallet address, payment method, and the number of bitcoins you want to buy. When you provide this information. it will take some days to place your order. After some days the bitcoins will be transferred to your wallet address.

Bitcoin ATMs:

It is the fastest way to buy bitcoin at a Bitcoin ATM. Bitcoin ATMs are physical machines similar to Bank ATMs but they are not actually the same. Bitcoin ATMs have software built into them for Bitcoin transactions. Bitcoin ATMs are of two types, unidirectional only support either selling or buying transactions. And bidirectional, on the other hand, supports both buying and selling transactions. You can buy bitcoin through an ATM machine with your digital wallet or cash. At first, you will need to verify your identity, some machines may need a photo of you, and some may need a photo of your national identity. And it also takes your phone number to send you a verification code to verify your identity. Once your identity is verified then you can buy or sell bitcoins. To buy bitcoins you need to feed some cash to the ATM machine and then hit the buy button on the screen it will take time to do the transaction after some time you will see a transaction report in your bitcoin wallet. You can also buy bitcoins by scanning a QR code. The machines have a QR code scanner, and users create a QR code that contains the essential information of the transactions, such as wallet address, the amount in cash, etc. And then this QR code is scanned through the machine's scanner to place the order.

Payments Apps:

Some Payment Apps like Paypal allow you to buy bitcoins. There are two ways to buy bitcoins on the Paypal app. First, you need to link your bank account or credit and debit card to the Paypal payment app to buy bitcoins. Second, you can directly use money in your PayPal account to buy bitcoins. Paypal will charge you a 0.49% fee on the purchase of bitcoin of $100. And 1.8% on $200-$1000. In Pyapal you only buy bitcoins (BTC), bitcoin cash (CBTC), Litecoin (LTC), and Ethereum (ETH). PayPal made it easy to buy these coins through the app. However, it has a drawback, that is, when you buy bitcoins from Paypal you cannot easily transfer your bitcoins to your wallet. you can buy bitcoins and only store your bitcoin in the Paypal app. You are not able to transfer these assets to other cryptocurrency platforms.

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Step 3. Payment Methods:

There are several payment methods used to buy bitcoins. Each method charges you some percentage of the amount you pay for buying bitcoins, which may vary depending on the platform or exchange you use to buy bitcoins. So choose a payment method that is best suitable for you and available in your country. Here are some payment methods that are commonly used for buying bitcoins.

bank transfers. bank transfers:

Bank transfer is the most commonly used payment method for buying bitcoin. You transfer the amount that you want to buy bitcoins to the exchange from where you can further proceed with the payments. And if you are on a peer-to-peer platform that links you with someone like you who want to sell his/her bitcoin to you, then you directly transfer the payment to his/her bank account, then he/she will send the bitcoins to your wallet. the charges of using a bank transfer are less as compared to other payment methods like credit and debit cards.

Debit and Credit Cards:

Many exchanges allow using of credit and debit cards to do payments. Although this payment method is easy to use, this is expensive compared to bank transfers. 2% to 5% percent of the transaction amount may be charged by using this method.

PayPal:

you can also use PayPal as a payment option. PayPal is an online payment app that is used for online transactions. Some exchanges allow transactions by PayPal. But fees associated with PayPal are very high, PayPal charges 3.75% to 5% on the transaction amount.

There are other online payment methods like PayPal you can also use, some of them are, Cash app, Skrill, Venmo, and more.

Step 4: Transfer bitcoins to your wallet:

After buying bitcoins you need to store them in your wallet. When you place an order it will give you a form to fill out and add the details like payment options and your wallet address to transfer the bitcoin to your wallet.

Before you invest in Bitcoin:

The rapid highs and lows in bitcoin's price make it risky. Before investing in bitcoin, do your own research on how bitcoin works, and what technology is used behind bitcoin. If you are a beginner, invest as much money as you can afford to lose. Don't invest everything in the crypto market. Otherwise, you will lose your money, which might result in severe psychological problems that might affect your lifestyle.