Where to buy Bitcoin
Many people know about Bitcoin especially since its price soared to nearly $20,000 from $1000 within a year in 2017. However, not everyone knows how to get some bitcoins for themselves or even understand what it is. Before we learn where to buy Bitcoin, we shall explain what it is briefly.
Bitcoin is a digital currency that can be used as money. Unlike fiat, you do not need to carry it around since it is not physical. It is a virtual currency that is based on a new technology called distributed ledger technology or blockchain.
This technology ensures that Bitcoin is safe, and has all the features of money. The safety is based on the fact that no single entity supervises the transactions made on the blockchain. Several nodes located in different parts of the world secures the network. Each of these nodes have the complete copy of the blockchain, so no single individual can alter it.
So Bitcoin is safe to use, it is easily transferable, it has value and is divisible. This makes it money.
How Do You Buy Bitcoin?
There are some basic steps that you need to take before you can buy your own bitcoins. Now that you understand what the virtual currency is, you need a wallet where you can store your bitcoins.
A Bitcoin wallet is the virtual pouch where bitcoins are kept. They are built in a way that they can safely hold the digital currency and also enable only authorized persons to access the coins.
Types of Bitcoin Wallets
There are several types of wallets that you can use in storing your BTC. These are broadly classified as cold wallets and hot wallets. Cold wallets store the bitcoins in them offline while the hot wallets are those that are connected to the internet. This makes the cold wallets safer.
Hot wallets can further be classified as web-based, mobile and desktop wallets.
The web based wallets are like applications that are built to be used on a browser. An example of a web-based online wallet is Blockchain wallet found at blockchain.com. This platform enables the users to store bitcoins and a few other coins without downloading them on their devices.
Mobile wallets are those that are built in a way that they must be installed on a mobile device before being used. The owner would still need to connect to the internet to gain access to their features.
These are Bitcoin wallets that must be downloaded on computers before they are used. Some common desktop wallets are Atomic wallet and Exodus.
These are wallets that store your bitcoins offline. They are generally considered safer since no hacker can access the funds stored offline. The standard practice is that very large funds are stored in cold wallets, while smaller funds moved regularly are stored in hot wallets.
For instance, a cryptocurrency trader can keep their trading funds in a hot wallet while a hodler who is keeping their bitcoins for the future when they hope the value would rise should store their bitcoins in cold wallets.
These are wallets that use external equipment that are plugged in a computer to store Bitcoin. This type of storage is popular as a number of companies have specialty in manufacturing them. Some examples are Ledger hardware wallet and Trezor hardware wallet.
All Bitcoin wallets work with a simple mechanism. They have a private key and a public key that must match before the wallet can be accessed. A paper wallet is simply a piece of paper that the owner of some bitcoins uses to write their public and private keys. These can be used to print the QR codes and stored safely. The fact that storage is offline makes people consider this method as safe.
The hazard associated with this form of storage for BTC is that the paper could be damaged.
Many of these wallets will store not just BTC but other digital currencies as well.
So where To Buy Bitcoin
You have several options when it comes to buying bitcoin. These are cryptocurrency exchanges and peer-to-peer platforms.
These are the most popular sources of Bitcoin purchase. Some have thousands of users and high volumes so that it is easy to purchase any amount of BTC that you need. This can be done with your standard bank card. Examples of these exchanges are Binance, BitMex, OkEx, Coinbase, Gemini and others.
These are platforms where you could buy bitcoin from other individuals who are willing to sell theirs. These platforms are mostly country specific, so you can buy with your local currency. Some examples of these platforms are Localbitcoins, Remitano, Wall of Coins and Bitquick.
Transfer To Your Wallet
Irrespective of where you buy bitcoin, the platform would credit your account with them. An exchange would store your bitcoin at the exchange account. You need to move your coins to your own wallet which you opened earlier. This is done by copying your private wallet address (the one you opened earlier) and pasting it at the field provided at the exchange wallet after you clicked on “send”.
Having your BTC in your own wallet instead of the exchange has many benefits. It gives you full control of your funds. Also, you may have heard that hackers usually target exchanges because of the huge funds stored there. Keeping your funds off exchanges makes them more secure in case something goes wrong.
Purchasing bitcoin is a simple matter. Just follow the steps of getting a wallet, signing up at an exchange, buy the bitcoin and transfer to your own wallet that you control.
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