Ok, you are here! Before we begin with Bitcoin buying methods, Let us learn first about What is Bitcoin?
Bitcoin is well known ‘term’ in the world right now, thanks to it’s skyrocketing market price which made it popular across the world.
You also look curious to invest in bitcoin, but buying bitcoin, will be a little difficult task, if you are a beginner. Follow our step-by-step guide to have clear information on buying bitcoin.
What is Bitcoin?
Bitcoin is a cryptocurrency, a form of electronic cash. It is a decentralized electronic currency, not owned or controlled by anyone. The currency can be sent from user to user on a peer-to-peer network without any mediator. In 2009, Bitcoin was introduced by a person or group under the pseudonym Satoshi Nakamoto.
Things To Consider Before Buying Bitcoin
Before you go in with a crypto wallet, remember: always go for a small amount and never stop exploring. There’s a lot to learn about the cryptocurrencies, and you don’t want to make any mistake in your first investment. Buying Bitcoins isn’t difficult, but having them secured and knowing, when and where to trade them can be really tough.
The biggest warning to enter in the world of Bitcoins is price unpredictability. Now, if you purchase 0.001 BTC you need to pay a certain price in your chosen currency, approximately the equivalent of 41 USD at the time of writing. Wait for sometime and check the market, the price will be different. A few weeks or months later it could increase or decrease, depending on the market.
Another important thing is the safety of cryptocurrencies. Bitcoins are digital entities, you can’t keep them under your home locker for safekeeping. They’re a prime target for hackers, particularly, if you’re unfamiliar with these segment.
Next, you need to have a crypto wallet to keep the bitcoin. Once you have a wallet, you can buy bitcoins using bank payment, Credit card, Debit card, PayPal or ATM.
Choose The Right Seller
The best place to buy your first Bitcoin is on an exchange. There are a lot of exchanges out there, with different functionalities. So it’s very much important to choose the right exchange to start with. We recommend for Binance exchange, but you can check other exchanges by using a Bitcoin exchange comparison site.
Signing up for a Binance account is easy, though you need to provide identification like photo ID. These verifications are important to follow as they allow the site(s) to comply with ‘know-your-customer’ regulations.
Buy Bitcoin and Store Them In Your Wallet
When you go to the market page of Exchanges you will be provided with all the information on how much Bitcoin you can buy for a particular amount of money. Although, the unpredictable nature of Bitcoin prices can change dramatically by exchange and from time to time.
To buy your first coin, enter the amount of Bitcoin you want to buy in the particular field and click the buy button. On Coinbase or Coinbase Pro, this is a basic “market” buy order, which will purchase Bitcoin at the best market rate. Also, you can place a “limit” order, where you set a price you’re willing to pay for a certain amount and a trade is executed only if that amount shows up at that price.
After your purchase, your new Bitcoin is stored in your Coinbase wallet. You should then transfer these funds to the address of the Bitcoin wallet you have created separately from the exchange. You will be charged a small fee for this transfer. Own wallets are considered more safe and secured.
Select payment methods
Some exchanges offer card payment and some don’t. You should choose the exchange which offers card payment.
a.) Using credit card
The easiest way to buy Bitcoin is a by using your credit card. The credit card offers multiple offers at different exchange sites.
When using Binance you need to create a new account. Once you complete the step, you need to enter your credit card number to process the payment. However, before making your purchase it is advisable to note the following fees are applicable to credit card transactions:
Trading fees: This fee can vary from one trading platform to different banks. The fee can start from 0.1% up to 3%.
Deposit fee: The Deposit fees are zero at some exchanges and also it can reach up to 2-4 %.
Withdrawal fee: It depends on how much amount you withdraw and from which. Most of the exchanges charge a fee for withdrawing your own Bitcoin.
Payment processor fee – This depends on the banks and their credit card options. The fees can vary from another.
The advantage is most of the exchange accepts credit card and its very easy to use.
b.) Using Debit card
Currently, coinbase is one of the top Bitcoin exchange in the world. You need to create an account and connect your debit card to your profile. They charge around 3-4% fee on all the purchases you make with your card. Moreover, you should verify your identification with them.
c.) Using Wire Transfer
Using Wire transfer to buy bitcoin is one of the most common methods of payment. It is safe and secured, offers larger limits and if there is something wrong, the bank got your back.
d.) Using PayPal
Buying Bitcoins with PayPal can be a little bit headache. As there are more cases of chargeback cases. A good option depending on which platform you choose. Some exchanges offer you Escrow protection and some offers a wide selection of sellers.
e.) Using Bank Cash
You can buy Bitcoins with cash. One is with Bitcoin ATM and the other is in person.
By using the ATM, you need to pay a commission on top of your normal exchange price. you can deposit the cash in the ATM machine, and it sends the digital currency to the address you provided. Locate Bitcoin ATM by country through Bitcoin atm locator.
If you want to keep your transaction a face-to-face and want to be anonymous then there are few exchanges which allow face-to-face trading. You can check platforms like LocalBitcoins. They provide an escrow service to protect you and the seller.