After understanding what bitcoin is and its brief history, you’re probably interested in getting in on the action. But just how and where can you buy bitcoins? Is it safe and legal? These are just a few of the questions newcomers have when it comes to this digital currency.
Don’t worry – we’ll get down to the simple details you will need so you could get started on bitcoin soon.
Getting Started: Choosing Your Bitcoin Wallet
Before you buy your first bitcoins, you need to consider two crucial things:
- HOW you want to pay for them (g. cash, wire transfer, debit or credit card, etc.); and
- WHERE you want to keep your bitcoins.
Unlike fiat currency such as euros or dollars, getting bitcoins may be easy or difficult depending on where you live. First, some countries put a restriction on digital currency (e.g. Morocco and Bangladesh). Second, a number of banks discriminate against bitcoin. But as long as you’ve managed to get these factors taken care of, you’re almost halfway there!
Next, you’ll want to know the basics of having a bitcoin wallet. In essence, think of your wallet as a bank account – but for bitcoins. It’s not just a place to store digital currency, you can also make transactions on it (such as send or receive bitcoins).
This is perhaps one of the most important things you’ll ever do – so choose your wallet carefully!
These wallets are available for desktop (Mac, Windows, Linux), on mobile, on the cloud, or even as hardware for those who want to store bitcoins offline. Each will have its own pros and cons. It’s recommended that you read up so you know exactly which wallet will suit your needs and lifestyle.
Desktop wallets like Bitcoin Core for example, may seem complex for most beginners. As the software needs to be downloaded straight to your computer’s hard drive, it might have certain requirements, like large disk space.
You also need to make sure that you have the best in anti-malware and ransomware protection. The upside is that you have complete control over all your transactions.
Mobile wallets such as Electrum, makes bitcoin transactions ready on your fingertips. If you want a user-friendly platform with basic privacy but with a secure environment, then this might be a good wallet to start with. As these wallets are mobile, you get to carry them anywhere with you!
Cloud or Web wallets on the other hand, are a great option if you want more flexibility. Choosing this type of bitcoin wallet enables you to safely store digital currency while still maintaining control over your money.
However, be extra careful when assessing which service to use. Different companies will have different levels of security. As cloud or web wallets operate remotely, you need to be able to trust developers NOT to steal anything in case they have an issue with their site.
Hardware wallets like Trezor provide extra security as these devices are optimized specifically for safe digital currency transactions.
They’re lightweight, portable, and usable, allowing for bitcoin exchanges as long as they’re connected to an online device. But unlike computers or smartphones, you can’t install software on them. This makes them super secure.
Buying Bitcoins: Tips and Considerations
Once you’ve chosen a wallet and a mode of payment, simply follow the next steps to begin buying bitcoins.
For example: if you’ve chosen a mobile/desktop app like Coinbase, just sign up and create an account. Next, the service will ask you to connect your bank account. This is how you’ll be buying bitcoins from their platform. After the verification process is complete, you’ll be presented with bitcoin exchange rates, as well as the option to buy or receive bitcoins.
Remember that different services will offer varying ways of getting bitcoins! Some wallets may also not operate in select countries. Please be informed on which wallets allow buying and selling of digital currency in your place.
Not all bitcoin wallets will be as easy as inputting your name and email address. Others might require additional proof of identity. So be ready. Connecting your bank account to a bitcoin wallet could also present problems like frozen funds after an exchange. To avoid this, you could buy bitcoins directly from a seller.
Services like Localbitcoins.com, helps people get in touch with sellers in their area. Be warned though, that this process of getting bitcoins could be unsafe. As with any face-to-face exchanges, practice caution and meet in a public place. Be ready with your bitcoin wallet so you can confirm the transaction immediately.
Also, verify that digital currency exchanges are legal in your country before meeting up! This is especially important for those exchanging large amounts of cash, as they might arouse suspicion if done in a public place.
What about mining?
Mining used to be a popular way to get bitcoins without having to pay for it. Sadly, with its ever increasing popularity, mining it on your own just isn’t the same.
Today, it’s more effectively done by expensive, optimized hardware controlled by large mining groups or companies. Not only do they get more bitcoins by putting all their resources together, they can also share the rewards among themselves.
If you don’t want to spend thousands on a computer rig, you can still get a piece of the pie by investing in these mining companies. But take note that as with any investment, they come with their own risks:
- Groups or companies that claim to mine bitcoin could just be frauds.
- You’re not exactly sure how they do their operations.
- You might not get as big of the profits as the miners themselves.
- Depending on how bitcoin performs, mining groups could cease operation at any time.
Do your own reading and research if you want to get into this type of action. Investigate the various companies that could hit it big in coming years.
Is it too late to buy bitcoins today?
A good answer to this would be: no one knows for sure.
If you have extra cash that you can part with, investing a bit is simply part of the excitement. Remember that plenty of people did get lucky when they got their hands early on bitcoin. However, keep in mind that bitcoin’s – and its similar entities – main goal has always been to make currency free and fast for all.
Buying bitcoin today means exercising your desire for a future when money is quickly transferred anywhere around the globe – for free. And in this sense, nothing is ever too late.