Before you buy bitcoin, it is important to understand the market. As of this writing, the crypto market has witnessed a green line in the past week, as bitcoin price surpassed the 8000-dollar mark after a downward trend in the first quarter of 2018. Analysts believe that the surge followed the massive buy volume, as witnessed across major exchange platforms. It was also partly due to the demand for the cryptocurrency from institutional investors.
When the price of bitcoin takes a downward trend, it is both great and frustrating about the digital currency. It’s great in the sense that those who are willing to buy bitcoin will have an ample opportunity to do so. On the other hand, it is equally unpleasant for those who purchased the coin earlier, as the value decreases. All the same, one lesson about the crypto market is that it falls, picks itself up, and continues on an upward trend.
Not easy to predict
It’s usually not easy to tell the right time to buy bitcoin, based on the open nature of the crypto market. However, with a personal interest in cryptocurrency and an understanding of what bitcoin is, you can follow the market dynamics to know which time is best for what activity.
Note that this guide is not an express recommendation to buy or not to buy bitcoin. This information is necessary for people who have made the decision and would like to know how and where to buy the cryptocurrency. As a bitcoin buyer, you have probably heard of all the risks associated with the cryptocurrency market. The fact is, the market is highly volatile. Bitcoin is not accepted everywhere. In many countries, governments are vehemently opposed to its use and existence. However, since it pioneered the industry, more altcoins have come up, some with the hope of superseding the pioneer cryptocurrency.
Bitcoin still tops the list
Bitcoin still leads the cryptocurrency pack, with a market capitalization of more than 300 billion dollars. All the same, most people find difficult to buy bitcoin. With the price soaring above $8000 as of this writing, many people yearn for a taste of the digital currency.
Fortunately, this article exposes new simpler ways that anyone can use to buy bitcoin. After reading this, you’ll not have to toil anymore or take a long time before you own a piece of the cryptocurrency. Following its progress in the crypto space, it is now possible to own bitcoin in a matter of minutes. Once you are ready to purchase, the first thing to acquire is a bitcoin wallet. This will enable you to access your purchased coins.
How to find the best bitcoin wallet
Bitcoin is not tangible, like the universal currency notes and coins. Instead, it is digital, existing only in electronic form. The wallet, therefore, enables you to store your coins electronically. A bitcoin wallet consists of a public and a private key, which are crucial when it comes to buying or selling bitcoin. Different types of digital wallets exist, with varying levels of security. Read on to discover different types of bitcoin wallets available in the market.
Online and Mobile Wallets
They are the most convenient wallets, especially for casual buyers. These wallets allow users to access bitcoin faster and easier. However, they leave your funds in the hands of a third party. While the best online wallets are largely secure, you need to stay cautious always, regardless of the confidence.
An example of online bitcoin wallet is Coinbase. It is arguably the most convenient, given the fact that Coinbase is also an exchange platform. This eventually makes it simple for users to sell or buy bitcoin. From Coinbase, users can also have their coins stored offline, which is more secure.
Coinbase and other online wallets have integrated their services with mobile devices, whereby users can access the services through mobile apps. In addition, there are online wallets specifically designed for smart phones. These wallets enable you to access your funds wherever you go, but if they get hacked, you can lose your funds forever.
Overall, mobile apps are convenient. Some even have advanced features that make them more secure. For example, Airbitz and Mycelium utilize client-side encryption and open protocol respectively for added security.
Hardware and software digital wallets
Hardware wallets provide better security for your bitcoins. The wallet is ideal for those eyeing long-term investment. These are wallets on a secure device, which only you can access. This makes them out of bounds for any third party. The downside, however, is that they are costly.
However, it is important to ensure the best security for your bitcoins, even if it means spending more. In this regard, hardware wallets are a sure bet. Trezor is an example of a hardware wallet. It offers a two-factor authentication, which works together with a password manager. This is different from other wallets that require only a PIN code to access.
Software wallets are not as secure as the hardware versions, as they are vulnerable to hacking. In a worst-case scenario, you can lose all your bitcoins in a software wallet. It will require you to remain vigilant and keep your computer safe and free of any form of malware, which may not be possible. Popular software wallets include:
- Electrum—utilizes decentralized servers
- Copay—provision for multiple wallets
- Jaxx—can store multiple cryptocurrencies
As the name suggests, these wallets are paper-based. It is simply printing your private and public keys on a piece of paper and keeping it in a secure storage where only you can access. Practically, these wallets cannot be hacked into. When you’re ready to use it, you simply need to scan the printed QR codes and you’re good to go. However, paper wallets also have their risks. You can lose it, someone can steal it from your home, or it can incur damages.
You have to be careful if you have a paper wallet. Ensure it’s tightly sealed and the printed keys are not visible for anyone apart from you. For example, you can print it through a USB or via a printer that is not connected to a network. Overall, when it comes to bitcoin wallets do your research, and come up with what works best for you.
How to use credit or debit card to buy bitcoin
Once you own a bitcoin wallet, you have a place to store your funds. One way to purchase bitcoin is by using your credit or debit card. You can simply connect your credit or debit card to your wallet, which is a convenient and faster way to buy bitcoin. However, it may also depend on the bank and the card you use. To that end, you need to find out whether your exchange platform or card supports bitcoin purchase.
For instance, Coinbase accepts MasterCard and Visa, but not American Express card. The regulations about credit and debit cards keep changing so it’s important to confirm first before you go ahead to use your card. Some institutions recently barred their credit cards from being used to buy cryptocurrencies. It also important to understand the bitcoin exchange you would like to use to buy bitcoin.
Buying Bitcoin on Coinbase
With a Coinbase wallet, you are already set because the platform doubles as an exchange platform. Transaction fees vary from one exchange platform to another, based on the country and the limits they offer per transaction. For Coinbase, which is present in 32 countries, transaction charges attract 3.99% fee.
Follow these steps to buy bitcoin from Coinbase, using your card:
- The first step is to create an account on Coinbase website. You will have to upload proof of identity and to verify the details on your credit card.
- Once your account is up, you can log on and click the “buy/sell” tab on the upper part of the page. Click the “Buy” tab and you will find a range of cryptocurrencies. Choose Bitcoin.
- Insert the amount of money you would like to spend to buy Bitcoin. The platform has a built-in calculator to help you with this step.
- Click on “Buy Bitcoin Instantly,” and confirm whether you provided the correct information before you click “Confirm Buy.”
The page also has a provision for “Repeat this buy,” which you can utilize if you prefer to repeat the purchase.
Buying Bitcoin on Coinmama
Another popular platform to buy bitcoin is Coinmama, which accepts both credit and debit cards. While you can make larger purchases here, transaction fees are quite high. Here’s how you can purchase Bitcoin on Coinmama with your credit card:
- Create an account with your personal information.
- Click “Buy Bitcoins” and select the amount you would like to buy. Choose “Credit/Debit Card” as a method of payment.
- Enter your bitcoin wallet address. This is usually the public key on your digital wallet.
- Enter payment and billing information.
- Verify your identity, including a phone number, e-mail, and government-approved ID.
- Receive confirmation e-mail that everything is correct.
Buying Bitcoins with PayPal
PayPal legitimized the purchase of bitcoin on its system as early as 2014. While the system remains supportive of the cryptocurrency, it’s not as high on it as it was back then. All the same, there are ways to buy bitcoin with PayPal, albeit in smaller amounts.
However, PayPal does not accept direct purchases from a bitcoin exchange. Instead, it accepts purchases through VirWoX, an online exchange platform that acquires currency for Second Life Lindens (SLL).
First, you transfer money to SLL, which converts the amount into Bitcoins. Here are the steps to follow when using VirWoX PayPal to purchase bitcoin:
- Create an account with the information required
- Activate your account, receive a confirmation e-mail, and change your password.
- On “My Account” tab, click “Deposit,” and scroll down to “PayPal Express Checkout” option. Include the amount you want to deposit and proceed to “Checkout with PayPal.”
- With the funds in your account, find “Exchange” tab and click on “USD/SLL.” Include the amount you want to be converted.
- Under “Exchange,” click “BTC/SLL” and include how much bitcoin you would like to buy. Proceed to “Exchange to BTC.”
- Once converted to BTC, you can “Withdraw” under “My Account.” Indicate the amount you would like to withdraw and supply your bitcoin address.
It is rare to find real bitcoin exchanges that accept direct PayPal purchases. However, websites such as Local Bitcoins have made it easier to buy bitcoin. On this particular platform, you can find sellers worldwide, including those that are near you. You can discuss terms, and exchange your money for bitcoins. All the same, you need to stay vigilant because in these platforms you deal with complete strangers. Don’t reveal any sensitive information such as card numbers, which could make you an easy target for a scam.
Buying Bitcoin with cash
It is equally possible to buy bitcoin using hard cash. It is a rather secure way to obtain the cryptocurrency. One of the best ways to do this is through a bitcoin ATM. You can find bitcoin ATM outlets all over the world here. Most of the ATMs are located in major U.S. cities such as New York, Miami, Los Angeles, Chicago, and more. Different ATM outlets have different methods of verifying information. Here are the general steps follow:
- Press “Buy Bitcoins.”
- Verify your identification, which could be through a confirmation code delivered to your phone.
- Key in your bitcoin address by scanning your wallet’s QR code
- Key in the cash
- Print the confirmation receipt
The earlier mentioned Local Bitcoins gives bitcoin buyers the opportunity to use cash to purchase the digital currency. Both parties can trade in person, or online. Similarly, some sites connect buyers and sellers in a way that the seller provides banking details and the buyer deposits the cash at the account provided. An example of such platform is Bitquick. The buyer keeps the receipt provided as proof of payment, so the seller can release the bitcoins. Even so, buyers need to remain vigilant.
The methods described in this article could help you acquire bitcoins faster. All the same, the crypto market is expanding. New ways of withdrawal come up, and new exchange platforms spring up to help people acquire the cryptocurrency with ease. Once you buy bitcoin using any of the methods above, you can choose to spend it or hodl it for long-term investment.
Which other methods do you know that you can utilize to buy bitcoin? Join the conversation over at Telegram (https://t.me/coinstaker)
Images Courtesy of Getty Images and CoinStaker Library
Tony is a writer for the crypto space. He presents cryptocurrency and blockchain topics to the public in a way that he only can. While carefully researched, this article should not be taken as an express investment guide. Do your own research and consult a financial advisor before you invest in cryptocurrency.
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