Bitcoin investing seems complicated at first. However, this process becomes more comfortable when broken down into the main steps.
What’s more, the emergence of more legit wallets and exchanges is making the process of purchasing Bitcoin easier.
Requirements for Buying Bitcoin
It would help if you had certain things before you purchase Bitcoin.
- A cryptocurrency or Bitcoin exchange account
- A secure internet connection
- A payment method
- Personal identification documents
It would help if you also had a personal wallet outside the exchange account. Some of the acceptable payment methods include debit cards, bank accounts, and credit cards. You can also get Bitcoin through P2P exchanges and specialized ATMs. Nevertheless, Bitcoin ATMs are increasingly asking users to present government-issued IDs.
Choose a Bitcoin Exchange
The first step is to choose your Bitcoin exchange. Platforms like bitcoin up make buying, selling, and holding Bitcoin easier. Choose a platform that allows users to withdraw Bitcoin to personal wallets. And this is very important because some brokerage platforms do not let users do this.
Bitcoin ethos is mainly individual sovereignty and decentralization. As such, some exchanges allow their users to remain anonymous. That means they don’t require users to provide personal information. Such Bitcoin exchanges operate autonomously and are decentralized. In simple terms, no person, group, or CEO acts as the central control point.
Subsequently, people can potentially use these systems for criminal activities. They also target people in the unbanked world, such as refugees. Nevertheless, some people believe that the benefits of these platforms’ services outweigh their potential illegal uses. However, do your due diligence to pick a reputable Bitcoin exchange.
Link Your Bitcoin Exchange to a Payment Method
After selecting your exchange, gather the required personal documents to link it to a payment method. These documents may include a social security number, a picture of your driver’s license, and your source of income. Your region and the Bitcoin exchange will determine the required information or documents. Nevertheless, the purpose of providing these documents is to help the Bitcoin exchange to confirm your legitimacy and identity.
Most exchanges allow users to connect their bank accounts, debit, and credit cards. However, you should avoid buying Bitcoin with your credit card because of its potential volatility. Deposit fees vary from one exchange to another. Therefore, research the associated costs for every payment method when choosing your platform and the deposit method.
Place Your Bitcoin Order
You can buy Bitcoin after connecting a payment method to your chosen exchange. Each exchange has unique features, with some having significant liquidity. The features of some platforms are similar to those of stock brokerage firms. And, once you’ve connected your exchange to a payment method, buying Bitcoin should be easy.
Some Bitcoin exchanges offer several ways to order and invest in cryptocurrency. But, most Bitcoin exchanges offer limit and market orders. You can also find a crypto exchange that provides stop-loss orders.
In addition to different types of orders, exchanges offer different ways to set up ongoing investments. For instance, a platform can allow users to set recurring, daily, weekly, or monthly purchases.
Store Your Bitcoin
You store your Bitcoin in a digital wallet. When you have Bitcoin in a personal wallet, you can control a private key to the funds. You also keep your Bitcoin safe in case of exchange hacking. Thus, your Bitcoin’s safety is higher when stored in a personal wallet than in an exchange.
Ideally, Bitcoin exchanges provide wallets. However, security is not one of their primary businesses. That’s why storing Bitcoin in an exchange wallet is not recommended when it comes to long-term or extensive holdings.
In a nutshell, you should choose a reliable exchange where you can buy Bitcoin and a digital wallet to store your cryptocurrency. Therefore, research the available options to make informed choices before you purchase Bitcoin.