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Step by Step guide on How to buy Bitcoin?

Step by Step guide on How to buy Bitcoin?

What exactly is Bitcoin?
Bitcoin is a digital currency that is created and kept online rather than in physical form. Unlike fiat money, which is controlled by central banks and governments, Bitcoin and other cryptocurrencies are created by miners all around the world, embracing the principle of decentralisation.

Satoshi Nakamoto, a software developer, invented Bitcoin in 2009. Satoshi’s ambition was to develop a completely autonomous electronic payment system from central banks and governments.

If you’re new to the crypto world, determining how to acquire Bitcoin, Dogecoin, Ethereum, and other cryptocurrencies can be difficult at first. Fortunately, learning the ropes is rather simple. You may begin investing in cryptocurrencies by taking the five simple steps outlined below. Check out How to buy Bitcoin?

  •  Choose a Broker or Crypto Exchange

To purchase bitcoin, you must first select a broker or a cryptocurrency exchange. While both allow you to buy cryptocurrency, there are a few crucial differences to keep in mind.

What Is the Definition of a Cryptocurrency Exchange?
A cryptocurrency exchange is a marketplace where buyers and sellers may trade cryptocurrencies. Exchanges frequently offer minimal costs, but they can have more complex interfaces with many trading kinds and advanced performance charts, which can be intimidating for beginning crypto investors.

Coinbase, Gemini, and Binance.US are three of the most well-known cryptocurrency exchanges. While the conventional trading interfaces of these organisations may be intimidating to newbies, particularly those with no prior experience trading stocks, they also provide user-friendly easy purchasing choices.

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Important: If you’re new to cryptocurrency, make sure your exchange or brokerage accepts fiat currency transfers and purchases in US dollars. Some exchanges only allow you to buy cryptocurrency using another cryptocurrency, which means you’d have to locate another exchange to buy the tokens your preferred exchange allows before you could start trading cryptocurrency on that platform. This is How to buy Bitcoin easily.

What Is the Definition of a Cryptocurrency Broker?
Cryptocurrency brokers simplify the process of obtaining cryptocurrency by providing simple interfaces that communicate with exchanges on your behalf. Some charge more than exchanges. Others claim to be “free,” while making money by selling information about what you and other traders are buying and selling to huge brokerages or funds, or by failing to execute your trade at the best available market price. Two of the most well-known cryptocurrency brokers are Robinhood and SoFi.

  • Create and Verify Your Account

After you’ve decided on a cryptocurrency broker or exchange, you can sign up for an account. Depending on the platform and the amount you intend to purchase, you may be required to prove your identity. This is a necessary step in preventing fraud and complying with federal regulatory standards.

You may be unable to buy or trade cryptocurrencies until the verification procedure is completed. The platform may need a copy of your driver’s licence or passport, as well as a selfie to confirm your appearance matches the documentation you submit. The process of How to buy Bitcoin can look difficult but once you understand the process, it becomes easier.

  • Deposit Cash to Invest

To purchase cryptocurrency, you must first ensure that you have funds in your account. You can fund your crypto account by linking your bank account, approving a wire transfer, or even paying with a debit or credit card. You may have to wait a few days before you can utilise the money you deposit to acquire cryptocurrencies, depending on the exchange or broker and your funding method.

Here’s a major buyer beware: While some exchanges or brokers accept credit card deposits, doing so is exceedingly risky—and costly. Credit card issuers treat bitcoin purchases as cash advances when made with credit cards. This means they will have higher interest rates than conventional purchases, as well as additional cash advance expenses. When you make a cash advance, for example, you may be required to pay 5% of the transaction amount. This is in addition to any fees charged by your cryptocurrency exchange or brokerage, which can range from 5% to 10%, implying that you may lose 10% of your cryptocurrency buy to fees.

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  •  Place Your Cryptocurrency Order

You’re ready to place your first bitcoin order once you’ve deposited funds into your account. There are hundreds of cryptocurrencies to select from, including well-known names like Bitcoin and Ethereum as well as more obscure coins like Theta Fuel and Holo.

When you’ve decided which cryptocurrency to buy, enter its ticker symbol—Bitcoin, for example, is BTC—and the number of coins you want to buy. Most exchanges and brokers allow you to acquire fractional shares of cryptocurrency, allowing you to hold a sliver of high-priced tokens like Bitcoin or Ethereum that would otherwise cost thousands of dollars.

The following are the symbols for the top ten cryptocurrencies by market capitalization*:

  1. Bitcoin (BTC)
  2. Ethereum (ETH)
  3. Tether (USDT)
  4. Binance Coin (BNB)
  5. Cardana (ADA)
  6. Dogecoin (DOGE)
  7. XRP (XRP)
  8. USD Coin (USDC)
  9. Polkadot (DOT)
  10. Uniswap (UNI)

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  • Select a Storage Method

Cryptocurrency exchanges are not protected by the Federal Deposit Insurance Corp. (FDIC), thus they are vulnerable to theft or hacking. You could even lose your investment if you forget or lose the passcode to your account, as has happened to millions of dollars with Bitcoin. That is why it is critical to have a secure storage location for your cryptocurrency.

As previously stated, if you purchase bitcoin through a broker, you may have little to no control over how your cryptocurrency is stored. You have more possibilities if you buy cryptocurrency through an exchange:

Leave the crypto on the exchange: When you purchase bitcoin, it is often stored in a crypto wallet linked to the exchange. If you don’t like the provider with whom your exchange partners, or if you want to relocate it to a more safe location, you can move it away from the exchange and into a separate hot or cold wallet. You may have to pay a modest fee to do this, depending on the exchange and the quantity of your transfer.
Hot wallets: These are cryptocurrency wallets that are kept online and run on internet-connected devices like tablets, desktops, or phones. Hot wallets are convenient, but they are more vulnerable to theft because they are still connected to the internet. How to buy Bitcoin process just became easier.

Cold wallets: Because cold crypto wallets are not connected to the internet, they are the most secure way to store cryptocurrency. They are external devices, such as a USB drive or a hard drive. Cold wallets, on the other hand, must be handled with caution: if you lose the keycode connected with them, or if the device breaks or fails, you may never be able to recover your bitcoin. While this could happen with certain hot wallets, some are administered by custodians who can assist you in regaining access to your account if you are locked out.

We hope this article on How to buy Bitcoin was helpful!

Feature Image credits: Marca

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