Bitcoin (BTC) is the first and biggest cryptocurrency in the world, and hence, attracted many investors, analysts, and technology enthusiasts. Whether you want to invest in a new asset class, diversify your portfolio, or simply discover the exciting world of cryptocurrencies, Bitcoin takes centre stage.
Bitcoin’s rise from a niche digital currency to national asset marks the dawn of a new financial era- driven by transparency, innovation, decentralisation, and trust in technology. Bitcoin has achieved a monumental milestone, surpassing the $100,000 mark for the first time in its history.
In this article, we will take you through a simple and secure step-by-step guide for purchasing Bitcoin and getting started with digital currency.
Why to Buy Bitcoin?
Bitcoin is more than simply a digital currency; it is a revolutionary technology that provides various reasons to purchase it. They are:
- Decentralised: Bitcoin is decentralised in nature, which gives you more control over your money.
- Digital Gold: Bitcoin is often referred to as “digital gold” as it stores the value, serving as a protection against inflation and economic instability.
- Investment Potential: Bitcoin has frequently given exceptional long-term returns. Currently, it hit an all-time-high of $100k and is expected to cross the $150k mark in 2025.
- Global Access: It enables the rapid and cost-effective transfer of money across borders.
- Innovative Technology: Bitcoin introduces blockchain, a transparent and secure record that serves as the foundation for numerous innovations.
Things to know before buying Bitcoin
To ensure that a transaction is seamless and secure, you need to take certain steps before buying a Bitcoin.
Understand Bitcoin blockchain
Bitcoin is based on blockchain technology, a decentralised ledger that records transactions. Unlike traditional currency, Bitcoin is stored in a digital wallet and is not backed by any government or institution.
Set your budget
Bitcoin’s price is volatile, which means it can change drastically over a short period of time. Consider how much you want to invest, keeping in mind that you can also purchase fractions of a Bitcoin.
Choose crypto wallet (Optional)
A crypto wallet is essential for storing your cryptocurrency outside a trading platform. There are two main types of crypto wallets:
- Hot Wallet: As hot wallet is a type of software hosted online, they are always connected to the internet. And this makes it convenient for quick access and transfer of user’s assets. Example: Coinbase wallet or Trust wallet.
- Cold Wallet: They are usually called an offline wallet or ‘cold storage’. The most common types of cold wallets are hardware wallets and metal wallets. Example: Hardware wallet like ledger or Trezor.
Select crypto exchange
Cryptocurrency exchanges are platforms for buying, selling, and trading Bitcoin. Popular exchanges include Coinbase, Binance, Kraken, Crypto.com, Bitstamp and some more. Finalise an exchange that meets your requirements in terms of pricing, security, and user experience.
How to Buy Bitcoin?
To purchase a Bitcoin, it is advisable to follow a procedure.
Step 1: Choose a Bitcoin exchange
You need to create an account on a leading cryptocurrency exchange. Here’s how to pick the right one considering below features:
- Ease of Use: Choose a platform with a user-friendly interface.
- Security: Make sure the exchange has strong security measures such as two-factor authentication (2FA).
- Supported Payment Methods: Check whether the exchange accepts your preferred payment methods, such as bank transfers, credit/debit cards, or PayPal and many more.
- Fees: Compare trading, withdrawal, and deposit fees on different platforms.
To understand it properly, let us take an example of a global platform- Binance. Download Binance from App Store, Google Play or simply open its web application on your desktop.
Step 2: Create an account & complete KYC
Once you’ve chosen an exchange, create your account and complete the Know Your Customer (KYC) process by providing valid documents. It will require:
- Your email address
- A strong password
- Personal information (name, address, and ID verification, if asked)
- Identity verification to comply with regulatory requirements.
Step 3: Fund your account
Before purchasing Bitcoin, you need to deposit funds into your exchange account. Most exchanges accept:
- Bank Transfer: A cost-effective but slower option.
- Credit/Debit Card: Instant but may cost higher fees.
- Cryptocurrency Transfer: If you already have another cryptocurrency, you can transfer the fund.
Step 4: Place buy order
Navigate to the Bitcoin trading section on your chosen exchange. You’ll typically have two options:
- Market Order: Buy Bitcoin instantly at the current market price.
- Limit Order: Set your desired price; the transaction occurs only when Bitcoin hits that price.
For beginners, a market order is usually the simplest way to get started. Or you can buy Bitcoin via the exchange platform’s “Buy & Sell” window. Binance allows its users to directly buy crypto assets without navigating to the market section but it would require verifying your identity first.
Step 5: Transfer Bitcoin to Your Wallet
After purchasing Bitcoin, transfer it to a secure cryptocurrency wallet especially if you intend to keep it for an extended period. Because leaving Bitcoin on an exchange exposes it to potential cyber attacks and technical concerns.
Different Ways to Acquire Bitcoin
1. Bitcoin ATMs
Bitcoin ATMs (automated teller machine) are kiosks where you can purchase Bitcoin using cash or a debit card. Simply:
- Scan your wallet QR code.
- Insert cash or your card.
- Confirm the transaction.
- These ATMs are easy to use but may charge higher fees.
2. Peer-to-Peer (P2P) Platforms
- P2P platforms like Paxful or LocalBitcoins connect buyers and sellers directly. Advantages include:
- A variety of payment methods (bank transfers, PayPal, gift cards).
- The ability to negotiate prices.
- Can verify the reputation of the seller and use the platform’s escrow services for safety.
3. Brokerage Apps
Crypto Apps like Robinhood and PayPal allow you to buy Bitcoin directly. However, these platforms may not let you transfer Bitcoin to an external wallet.
4. Earn Bitcoin
You can also earn Bitcoin by providing goods or services and accepting it as payment. You can also participate in Bitcoin mining to link with blockchain directly and earn BTC for your contribution.
Cautions While Buying Bitcoin
1. Beware of Scams
Be cautious of schemes promising guaranteed returns or asking for personal information. Only use reliable platforms.
2. Enable Security Features
Always enable 2FA on your exchange account and use strong passwords.
3. Avoid Public Wi-Fi
Never log into your exchange account or wallet using public Wi-Fi, as it may expose your data to hackers.
4. Educate Yourself
Stay informed about the latest developments in cryptocurrency to make better decisions.
Conclusion
Cryptocurrencies are part of decentralised networks and transactions of these assets are recorded on the blockchain. Thus, transactions are faster and often cheaper than traditional bank transfers as the system lacks intermediaries and the fees associated with them. It underscores the growing adoption of digital assets as a legitimate asset class, reshaping the global financial landscape.
However, though buying Bitcoin is a simple process, it takes careful planning, preparation and attention to minute details. Begin by selecting a reputable exchange, creating a safe wallet, and deciding how much you wish to invest.
