Hey there! We are back again with another blog on Bitcoin. If you are a beginner and have absolutely no idea about what Bitcoin is, we suggest you check out our blog on beginner’s lessons about Bitcoin. This blog explores how to buy Bitcoin.
However, before you start buying your own cryptocurrency, you need a place to store it. That place in the world of cryptocurrency is called a ‘wallet’. There are various options available when it comes to wallets, each with its own security. Storage and access options. These wallets don’t directly store Bitcoin. Instead, they store private keys, which access Bitcoin addresses. These keys are needed to sign transactions, and if a user loses them, they lose their access to Bitcoin.
Let’s now dive deep into the steps through which you can buy a Bitcoin. Let’s get a notebook and pen, shall we?
Step 1: Choose a cryptocurrency exchange
For every potential investor in Bitcoin, there are a plethora of exchanges competing for their attention. Between this platter available to you, choosing the right exchange depends on many different factors, with its location being perhaps the most important one. This is because exchanges all over the world fall under different government jurisdictions, requiring various information from the investor, which varies on the involved regions. This brings us to the three types of exchanges that you should know about:
The first is the centralized one, where you can send funds to the platform in the form of crypto or money from a bank account and then can trade with those funds on the platform. In this case, you do not technically hold your funds when they are on the exchange.
The second option is DEX. DEXs, allow you to make trades from your wallet. These are composed of groups of pooled liquidity for different assets on the blockchain where DEX is based.
The third form is the P2P or the peer-to-peer option. For this, there are several platforms that facilitate such transactions.
Step 2: Decide on a Payment Option
Now that you have taken in a power-packed Step 1 full of information, you now have to make another decision. Hold on- it gets less back-breaking. This step is to choose a payment option. One other way exchanges also differ in terms of the payment methods that are accepted. The majority of big platforms allow you to link your bank account and your debit or credit card for transfers. Some also accept PayPal payments.
One thing to note is you will have to authenticate to identity when you first sign up for an account and register a preferred payment method.
Step 3: Place Your Order
Now that you are done with the complicated study part of starting with buying a Bitcoin, you can finally start buying Bitcoin once you have been verified and you have deposited money into your account. Again, different exchanges provide a different interface for this. Some might just have a button as easy as ‘Acquire’ or ‘Sell’. However, most of them, in general, provide a minimum of three order types which are market order, stop order and limit order.
Step 4: Store Your Bitcoin
While experienced traders with strong cybersecurity skills may prefer to own their wallets, and Bitcoin investors with large sums of money consider storing their Bitcoin themselves, there is always a risk related to hacking and fraud. But what is investing without risk? Though we advise you to study the market carefully before deciding, you should be aware of the risks that Bitcoin comes with.
And here your guide to ‘How to Buy Bitcoin’ ends. I hope you could learn something out of it and get some information as to how to get started when it comes to buying. With this, I wish you Happy Investing!