Are you new to the cryptocurrency world and thinking about investing in Bitcoin? We understand it is difficult to take the first take to such a kind of investment that we know is highly unpredictable. Well, then, this mini guide can surely help you guide through the process of buying Bitcoin blockchain technology.
Bitcoin is a secure but volatile digital currency. The currency is based on a network that is connected to every user and allows peer-to-peer transactions. Here involvement of a third-party app or entity is not allowed. Despite having a fixed supply of Bitcoins, the price and demand of Bitcoin keep fluctuating. The creator of Bitcoin only created 21 million Bitcoins, and the last Bitcoin will be mined in 2140.
However, experts believe that the volatility of Bitcoin will reduce sooner or later. Thus it is worth the risk to invest in Bitcoin. But, you should not jump into buying Bitcoin headlessly too. This article explains some simple steps to buy Bitcoin, which can be helpful to you.
- Chose a crypto exchange:
It is necessary to choose a reliable and secure crypto exchange since you can’t buy Bitcoin or any other cryptocurrency at that from a bank or stock exchange. These exchanges or platforms are not any physical buildings but online applications that you can download on your device.You need to choose a trustworthy crypto trading platform to buy Bitcoin.
Some popular trading platforms are Coinbase, Binance, Gemini, ByBit, Immediate Edge, and many more. Since the market is flooding with such platforms, you can also narrow down the scope of your search based on some specifications.
- The first factor can be security. Thus, the platform should ensure the privacy and security of the customers and their accounts. It should be difficult to hack and should use an offline database or cold storage to store your Bitcoin. The platform should have certain insurance policies in case of potential hacking.
- The platform should not extort unnecessary exchange fees and the margin must be cleared once.
- Moreover, the exchange should have most of the cryptocurrencies. A shortage of a number of cryptos is not good because the users might be interested in several cryptos.
Once you’ve chosen your crypto exchange, you can either buy a whole Bitcoin, a fraction of it, or any other cryptocurrency.
- Choose a payment method:
Different exchanges offer different modes of payment. While some require you to link your bank account with the app, the others let you pay from your debit card or other online payment apps like PayPal or apple pay. However, irrespective of the option you choose, you will have to give identity proof and provide some other documents to verify your identity.
You might need to submit a copy of your Social Security number, state-issued ID, passport, address proof, and proof of income to create an account and pay for your transaction.
- Place your order:
You can start buying Bitcoins after your documents are verified, and you have got cash in your account. Different exchanges have different processes for purchasing Bitcoins. Some simply have the buy and sell button on the homepage for one-step transactions.
However, mainly there are three order types offered.
- Market order:Market order is the most used method and a common method among almost all investors. Here the platform offers you a buying option of bitcoin at its current bid price.
2 . Stop order: This is an advanced order option where you can buy or sell Bitcoins at a self-specified price. This method is applied mostly at the time of selling your crypto before it falls.
3. Limit order: Under this order option, you can fix a higher and lower limit price and the bitcoins will be sold or bought automatically when the price meets the limits.
- Store your bitcoin safely:
Despite deploying effective safety measures, there is always a threat of fraud and hacking. So, it is necessary to store your Bitcoin in a cryptocurrency wallet instead of the exchange. Here you get options of two different types of wallets, a cold wallet, i.e. a hardware wallet, and a hot wallet, i.e. the software wallet. When opting for one, try to have a hardware wallet as it is the safer option among the two.
Bitcoin is the most widely used crypto. This is what makes it so valuable despite its volatility. So, if you don’t mind the risk and have a knack for investing, Bitcoin can be an excellent adventure for you.