“How to buy bitcoin” is one of the most popular questions on the internet and it is easy to see why. Bitcoin is the most popular and most valuable cryptocurrency (currently valued at around $18,000) and thus every trader wants some of it.
Therefore If you are someone looking to buy bitcoin for the first time, as a newbie to cryptocurrency trading, here are a few things you need.
How do beginners buy Bitcoin?
To buy a bitcoin you will need to open an account on a cryptocurrency exchange. A cryptocurrency exchange is an online marketplace where people trade cryptocurrency. Cryptocurrency exchanges work like your online broker and you can perform a variety of functions such as exchanging your fiat money for cryptocurrency, and vice versa, covert bitcoin into its equivalent in another cryptocurrency, and vice versa, There are several good crypto exchanges on the market like crypto.com, Gemini, BitMart Exchange Kraken, Bisq, etc.
To create an account on most cryptocurrency exchanges you will need personal identification documents. Most Crypto Exchanges and networks are bound by Know Your Customer regulations, in which they must have the verified identity of all the customers on their platform. Also, you need a secure connection to the internet, to protect your private information. Finally, you need to create your cryptocurrency wallet, an account outside your exchange account where you can put your money. Think of it as the difference between your bank account and your physical wallet. In this case, the bank monitors the transactions that go in and out of the account and if someone deposits money into your account you can take it out and put it in your wallet.
How can I purchase bitcoin?
You can pay for Bitcoin with your bank accounts, debit cards, and credit cards. You can also pay for bitcoin at specialized ATMs and Peer2Peer exchanges.
Also, you should know that bitcoin exchanges charge you exchange fees for all the exchanges you do on their platform. The exchange fees depend on several things, the cryptocurrency you are buying (bitcoin being the most valuable will have the highest exchange rate), the platform you are buying from, (the more secure a platform is, the more they will spend on-site maintenance and security. Thus expect exchanges like Coinbase might charge you higher than other exchanges, with less risk.)
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How much should I be expected to pay to purchase Bitcoin?
As a newbie in the Bitcoin/Crypto trading business, it is also important that you know that Crypto exchanges use a fee model determined by market movement. This is known as the “Taker-Maker” fee If for example, you are buying Bitcoin at the market fee, the exchange will charge you a “Taker” fee. On the other hand, if you decide to set a price you want to buy at and wait for the market to reach that price, then you have “made” a limit order and you will be charged a “Maker” fee instead.
At the moment 1 Bitcoin (BTC) is worth $18,600 and that is the major determinant of how much BTC you can pay.
The rule of thumb is that when you perform a transaction on a crypto exchange, the exchange will give you the current exchange of bitcoin to the currency that you want to pay for it (Most large exchanges have currency conversions in several currencies for those, not in the US) how much bitcoin you will get for the amount that you are paying, all the charges that come with your method of payment, and every additional exchange fees you have to pay.
You will be able to see everything on your transaction page before you click send.
Can I buy one Bitcoin?
At the moment 1 Bitcoin (BTC) is worth about $18,000 so yes you can buy one bitcoin. Also, you can buy a fraction of a bitcoin. For example, you can pay $9,300 for 0.5 BTC or $4150 for 0.25. the important thing is that your crypto exchange has a currency conversion calculator that can tell you the exact number of units of BTC that you are paying for the right to the last decimal place.
However different exchanges have their minimum price limits to the bitcoin you can buy. For example, Coinbase’s minimum price limit for BTC is $2.
Can Bitcoin be converted into cash?
If cash can be converted into Bitcoin, then the reverse can also be the case. Just log on to your exchange and list the amount of BTC that you wish to convert into cash. Add your account details (like the wallet you are transferring from, and where you want the money to go) The exchange’s currency converter will tell you how much you will get in addition to the fees that you have to pay. Then click send.
However, if you wish to collect cash rather than just have the money in your bank account, you will need a physical broker whose exchange account/wallet you can send the money to and who will give you the cash equivalent of the BTC that you have paid.
What are the Steps for Purchasing Bitcoin
I have discussed some of the steps to purchasing bitcoin above, find a bitcoin exchange, use a currency converter, and add your identity and your wallet address.
However, there are some other tips that you will find useful
- As a trader, you can create multiple public exchange accounts and private crypto wallets and distribute your coin over many addresses. A good strategy is to keep significant investments in public accounts not connected to the one(s) you use for day-to-day trading
- Check out the legal issues, regulations, and tax status around selling and purchasing Bitcoin where you live, especially if you live outside the United States of America.
- Even though the transactions you do on crypto exchanges are private, every transaction is visible on the blockchain and thus, your public key will be listed next to every trade that you do. This is why your private key which can be used to access your account, must be kept secret.
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