How to Buy Bitcoin
A majority of people today are choosing to buy Bitcoins. Online Businesses view it as an excellent method to transfer money. It’s fast, safe and reliable. Even gamblers prefer ‘trying their luck’ in the best Bitcoin casinos. So, how can you buy Bitcoins? Below is all that you’ll need to know!
Finding Your Wallet
Buying Bitcoin is just like signing up for a mobile application or service. First, you’ll need to download the Bitcoin wallet. You can find it by visiting websites like Blockchain and Coinbase or download their respective Bitcoin Wallet Apps on your smartphone. Later, you’ll need to complete an online form by filling in some essential details. It’s a quick process which will only take a couple of minutes.
What’s The Purpose of a Bitcoin Wallet?
A majority of people think that Bitcoins are usually stored in the wallet. Wrong! Bitcoins are not stored anywhere. Their balances are stored using private and public ‘keys’ which are just long strings of letters and numbers. The public ‘key’ is similar to a bank account number and serves as your worldwide address. It’s also the place where others send Bitcoins.
What about the private key? Well, it’s just like an ATM pin, and only you should know of its existence. It’s used to authorise all Bitcoin transmissions. Therefore, it’s the ‘private key’ that you’ll need to keep in your Bitcoin Wallet.
To protect your Bitcoin Wallet, you should:
- Encrypt it using a secure password
- Using the Cold storage function – that is keeping it offline.
As a user, you are also free to use Private Bitcoins to buy a particular product or even send money to a member of your family or friend. These Bitcoins are transmitted through the address of the ‘recipient.’ Hence, it’s no doubt that several places, where Bitcoin is fully operational, are increasing rapidly. With such increased acceptance, it’s continuing to create its mark in the world as one of the most suitable modes of payment. Even Japan has accepted it as a payment system!
After you get your Bitcoin Wallet, use a traditional method like a credit card, or debit card to purchase some Bitcoins on a currency exchange system. These Bitcoins are later transferred to your ‘bitcoin address.’ With that said, here’s a list of the best Bitcoin exchanges for you:
Bitstamp is one of the best exchange services to use when it comes to trading volumes. If you want to buy Bitcoins here, you’ll first have to open an account then transfer some money to it. You can do this through an international wire transfer or SEPA.
If you decide to use SEPA, you’ll find that there is another step for changing Euros to Dollars when trading. Similarly, when withdrawing, you’ll need to change it from Dollars to Euros.
Bitfnex is a platform which offers advanced trading tools such as short selling, liquidity swaps, and margin trading. It allows you to sell Litecoins, Darkcoins, and Bitcoins. It was launched back in 2013 and has grown within a short period. Also, looking at its previous trading volumes, it’s arguably the most significant exchange service. It’s currently in its beta testing stage, but we expect it to keep on growing.
Coinbase is one of the most popular names in the world of Bitcoin. It provides you with an excellent place to store, spend, buy and accept Bitcoins. Many businesses and merchants will even tell you that it plays a massive role in processing Bitcoin. Since Coinbase does not have Dollars in its customer accounts, it’s a bit unique from other exchange services. So if you want to buy Bitcoins here, you’ll have to link your bank account with that of Coinbase. After this, initiate an automatic transfer process called ACH, and you’re good to go!
However, this system is not suitable for a company which relies on day trading. Why so? Well, although you’ve made your order at the right time, all Bitcoins are disbursed once the amount is credited from the bank and into your Coinbase account.
Risks When Buying Bitcoin
Several potential risks come with using Bitcoins. Remember that it’s still a relatively new ‘thing.’ So, you’ll need to be wary of some of these risks:
A. Government Regulation
If governments had the power to regulate the use of Bitcoins, they wouldn’t hesitate! In reality, they view Bitcoin as a competitor. Hence, they’ll do everything in their power to try and control the growth of this digital currency. They could use methods such as tax, just like they do to huge industries.
B. Limited Adoption
Of course, not many businesses accept Bitcoin payments. This means that you will find yourself with a lot of Bitcoins but with no way of spending them. Don’t you think it would be a bit more practical for you to buy goods using Bitcoin in almost all stores?
C. Is Your Shared Information Safe?
Bitcoin also has that ‘network effect’ that also comes with sites such as Facebook and Twitter. Such means that it’s able to store a lot of information as soon as you start using your bitcoin wallet. Here, there’s a risk of hackers releasing sensitive details for personal gains!
Data collected between November 1st, 2013 and May 25th, 2014 show a significantly volatile Bitcoin payment system. Hence, this begs the question: can it arrive at a stable rate? For it to become a firm currency, it’s crucial for it to establish a steady process or else it becomes a huge risk to buy Bitcoin.
As you can see, the process of buying Bitcoins is pretty straightforward. As it continues to change the regulatory stance and improve on acceptance and adoption, you can expect the currency to grow. Despite this, remember that it’s still in the early stages meaning that factors such as taxation and volatility may cause some problems. All in all, it’s an incredible, modern-day currency which you should give a shot!