By Eric Summers
Looking for a Bitcoin Buying Guide? Wondering where to start? People have a lot of misconceptions about bitcoin – the very first widely known and accepted cryptocurrency worldwide.
A lot of people think for example that only hackers and shady people use it. However bitcoin is actually going mainstream with everyone from TigerDirect to Expedia.com to Dell and even Subway accepting payments in bitcoin now.
Why so popular?
Well, bitcoin has a lot of benefits over other currencies. For example, you can send bitcoins to someone as payment without having to go through the bank middleman (and get hit with extra fees). It’s also much faster than sending money via a bank wire or transfer. You can send bitcoins to someone and have them receiving the coins in seconds.
With all of this, it’s no surprise that many people are now trying to buy bitcoin for the first time. However it’s not as easy as going to your bank and withdrawing bitcoins – or going to a store and plunking down some hard-earned cash for bitcoin.
The system works a bit differently than that. This Bitcoin Buying Guide will go over a few things you need to know before you buy – so you can buy safely and securely.
First of all, while the price might be over $2000 us per coin, you don’t have to buy an entire bitcoin. Most places will let you buy portions of a bitcoin for as little as $20. So you can start off small and go from there as you get more comfortable with the way things work.
Secondly, this article is for general purposes only and not to be taken as financial advice. Bitcoin can be risky and before making any purchase you should consult with your financial advisor to see if it’s right for you.
So here are 3 easy steps to buying Bitcoins:
#1 Get a Bitcoin Wallet
The first thing to do before you buy your coins is to get a virtual wallet to store your coins. This wallet is a string of text that people can use to send you bitcoins.
There are a number of different types of wallets including ones you download to your phone or computer, online wallets and even offline, cold storage wallets.
Most people prefer to get a wallet on their phone or computer. Popular wallets include Blockchain, Armory, Bitgo MyCelium and Xapo.
Usually it’s as simple as downloading the wallet to your phone as an app or downloading the software to your computer from the wallet’s main website.
#2 Decide Where to Buy
There are several types of places to buy and each one is a bit different. There are online sellers that will sell you bitcoins directly for cash (or bank wire or credit card).
There are exchanges where you can buy and sell bitcoins from others – similar to a stock market. There are also local exchanges that link you up with sellers in your area looking to sell.
There are also ATMs where you go to purchase with cash and get your coins delivered to your wallet in minutes.
Each bitcoin seller has their benefits and drawbacks. For example ATMs are great for privacy, but they’ll charge you up to 20% on top of the current price, which is ridiculous. (On a BTC price of $2000, that $400! So you’re paying $2400 instead of $2000).
No matter where you decide to buy, remember to do your research and go with a trusted seller with a good reputation and strong customer service. First time buyers will especially have questions and may need the extra support to help them with their first transaction.
Take your time and research the different places to buy before you decide. Factors to consider include coin prices, extra fees, method of payment and customer service.
#3 Buy Bitcoin and Move It To Your Wallet
Once you’ve found a place to buy, get your funds ready (i.e. you may send a wire transfer or use your Visa to fund your account). Then wait for a good price. (Bitcoin prices are always fluctuating 24 hours, 7 days a week). Then place your order when you’re ready.
Once your order is filled and you have your coins, you’ll want to send them to your wallet. Simply enter your bitcoin address and get the seller to send you your bitcoins. You should see them show up in your wallet within minutes to an hour (depending on how fast the seller sends them out).
Voila, you are now a bitcoin owner. You can now send coins to pay for other goods and services, or hang on to them for a rainy day.
One last thing to remember: bitcoin is still in its infancy. There are huge price swings and the currency can be risky. Never buy more bitcoins than you can afford to lose.