How to buy bitcoin:
Investing in Bitcoin may seem complicated, but it is much easier when you break down the process into simple small steps.
Buying bitcoin is becoming easier day by day, and the legitimacy and reliability of trading platforms and wallets is also increasing.
Before you buy bitcoin:
There are several things that every aspiring bitcoin investor needs, including:
A cryptocurrency exchange account and personally identifiable documents, if using a Know Your Customer (KYC) system.
In addition to the need for a secure Internet connection and a method of payment.
It is also recommended to have your personal portfolio outside the trading platform account.
Valid payment methods using this route include bank accounts, debit cards, and credit cards.
It is also possible to get bitcoins from specialized ATMs and via P2P platforms.
Notably, Bitcoin ATMs increasingly require government-issued ID cards as of early 2020.
Privacy and security are important issues for bitcoin investors as well.
Although there are no physical bitcoins, it is usually a bad idea to flaunt large possessions, as the owner becomes vulnerable to threats and hacks.
Know that anyone can see the balance of the public address you are using.
This makes it a good idea to keep large investments in public addresses that are not directly related to the investments used in transactions.
Anyone can view the history of transactions made on the blockchain, but while transactions are publicly recorded on the blockchain, private user information is not.
On the Bitcoin blockchain, only the user's public key appears next to the transaction, making transactions confidential but not anonymous.
Meaning Bitcoin transactions are more transparent and traceable, but the cryptocurrency can also be used anonymously.
Now many regulatory and security agencies can trace transactions made on the blockchain to other online user accounts, including their digital wallets.
For example, if someone creates a Coinbase account, they must provide their identity.
Now, when that person buys bitcoin, transactions are associated with their name on the platform.
If someone sends Bitcoin to another wallet, it can still be traced back to who the account holder was.
Steps to buy and get bitcoin:
Step 1: Choose a reliable trading platform
Registering with a cryptocurrency trading platform will allow you to buy, sell and hold cryptocurrencies.
It is generally a best practice to use a trading platform that also allows its users to withdraw their cryptocurrency to their personal online wallet for safer storage.
For those looking to trade bitcoin or other cryptocurrencies, this feature may not be important.
There are many types of cryptocurrency exchange platforms.
Since the ethos of Bitcoin is about decentralization and individual sovereignty, some exchanges allow users to remain anonymous and do not require users to enter personal information.
Such platforms operate independently, and are usually decentralized which means they do not have a central point of control.
While these systems can be used for nefarious activities, they are also used to provide services to the unbanked population of the world.
For certain groups of people, refugees or those who live in countries with little or no government or bank credit infrastructure, anonymous trading platforms can help bring them into the mainstream economy.
Currently, the most common trading platforms are not decentralized and already require KYC documentation.
In the US, these platforms include Coinbase, Kraken, Gemini, and Binance USA, to name a few.
Each of these platforms has grown significantly in the number of features it offers.
Coinbase, Kraken and Gemini offer bitcoin and a growing number of altcoins.
These three are probably the easiest on the cryptocurrency platform in the entire industry.
The Binance platform caters to the more advanced trader, offering more serious trading functionality and a better variety of altcoins to choose from.
An important thing to note when creating an account with a cryptocurrency trading platform is to use safe internet practices.
This includes using two-factor authentication and using a unique, long password, including a variety of lowercase, uppercase, special characters, and numbers.
Second Step: Connect the trading platform to your payment option
Once you have chosen a trading platform, you now need to collect your personal documents.
Depending on the exchange platform, some may include pictures of your driver's license and Social Security number, as well as information about your employer and the source of funds.
The information you may need can depend on the area you live in and the laws within it.
Therefore, first verify your identity and legitimacy, then you can link the payment option.
On most trading platforms, you can link your bank account directly or you can link a debit or credit card.
Although you can use a credit card to purchase cryptocurrency, it is generally something to avoid due to the volatility that cryptocurrencies can experience.
While Bitcoin is legal in the US, some banks are not very kind to the idea and may question or even stop deposits to crypto-related sites or exchanges.
It is a good idea to check to make sure that your bank allows deposits into your chosen trading platform.
There are varying fees for deposits via a bank account, debit or credit card.
Coinbase which is a powerful trading platform for money It starts with a 1.49% fee for bank accounts, with a 3.99% fee for debit and credit cards.
It is important to research the fees associated with each payment option to help choose a trading platform or to choose the payment option that is best for you.
Trading platforms charge a fee for each transaction.
This fee can be either a flat fee (if the trading amount is low) or a percentage of the trading amount.
Credit cards are subject to processing fees in addition to transaction fees.
Third Step: Submit an application
Once you choose the trading platform and connect the payment option, you can now buy Bitcoin and other cryptocurrencies.
In recent years, cryptocurrency trading platforms have become more and more prevalent.
It has grown significantly in terms of liquidity and breadth of features.
Operational changes in cryptocurrency trading platforms parallel the change in the perception of cryptocurrencies.
An industry that was previously seen as a scam or an industry with questionable practices is slowly turning into a legitimate industry that has caught the attention of all the major players in the financial services industry.
Now, cryptocurrency exchanges have reached a point where they have almost the same level of features as their brokerage counterparts.
Once you find a trading platform and connect a suitable payment method, you are ready to go about getting bitcoins.
Cryptocurrency trading platforms today offer a number of order types and investment methods.
Almost all cryptocurrency trading platforms offer both market orders and limit orders and some of them also offer stop loss orders.
Among the platforms mentioned above, Kraken offers most types of orders.
Where Kraken allows market orders, limit, stop loss, stop limit, and take profit.
Aside from the variety of order types, the platforms also offer ways to set up recurring investments that allow clients to transfer their average dollar cost into their investment of choice.
Coinbase, for example, allows users to set recurring purchases for each day, week, or month
Step Four: Safe Storage
Bitcoin and cryptocurrency wallets are a place to store digital assets more securely.
Having your cryptocurrencies outside the trading platform and in your personal wallet ensures that you are in sole control of the private key to your funds.
It also gives you the ability to store funds away from the platform and avoid the risk of the platform getting hacked and losing your money.