Before we explore how to buy bitcoin, it’s crucial to know where to store them securely. You need a wallet to store bitcoin. There are various forms of bitcoin wallets with different security features and access options. We will discuss each type of bitcoin wallets and which is the right option for you.
However, technically the wallets do not store the bitcoins; they hold the private keys. You need to enter the private key to access the bitcoin address and make any transactions. If you lose your keys, you lose the bitcoins. So it’s essential to store the keys in a safe and secure place. Here you will learn how to buy bitcoin using the following five steps.
- Choose the type of Bitcoin wallet
- Decide where to buy Bitcoin
- Know About the risks involved in buying Bitcoin
- Best practices to buy Bitcoin
After reading this article, you will be able to buy Bitcoin easily. However, you should first understand why you want to buy Bitcoin.
Choose The Type Of Bitcoin Wallet
First of all, you need to choose a suitable bitcoin wallet when you think of how to buy bitcoin. There are five types of bitcoin wallets, such as hardware, paper, desktop, mobile, and web wallet.
A hardware wallet is one of the most secure forms of wallet. It stores the private keys offline in a hardware device like a USB. However, these are not suitable for trading or short-term purposes. If you want to buy and hold bitcoins for the long-term and in large amounts, you should go for hardware wallets.
Paper wallets are another form of offline wallet. These wallets are also secure, but there is a risk of tearing the paper. It contains two QR-codes, one is to receive BTCs, and the other is the private key.
As the name suggests, these wallets are installed on a desktop. It is a secure wallet among the software wallets. It stores the private keys offline when not in use. However, you need to connect it to the internet while making transactions.
Mobile wallets are the most popular but with some risks involved. People use it extensively as it is convenient and easy to use. It’s just like an application in your smartphone; you can buy, sell, store, and even trade bitcoins using a bitcoin wallet app. There are many popular mobile wallets available both for Android and iPhone.
Web Wallets are also convenient as you can access bitcoins from any device. However, these are the least secure among all other wallets because the private keys are stored online on a third-party server. Although these wallets allow easy access and transactions, they involve some risks. The risks can be reduced by taking proper security measures.
Decide Where To Buy Bitcoin
Next, you need to select a platform when you are looking for how to buy bitcoin. You can purchase bitcoin from the following places.
You can now buy Bitcoins from ATMs. Although it’s a new way, it gives you a private experience of buying bitcoin. With the popularity of bitcoin, the number of Bitcoin ATMs is also growing rapidly. You will find these ATMs across the world in different Bitcoin-friendly cities.
If you want to know the locations of Bitcoin ATMs, you can check it from CoinATMRadar Map. You just need to insert cash and scan the QR code through a mobile app, or you may receive a paper receipt with instructions on how to transfer the bitcoins to your wallet.
One of the most popular and easiest ways to buy bitcoin is from crypto exchanges. There are a number of crypto exchanges available, and it’s crucial to choose the right one. Every day new exchanges are evolving with new features and better UI. However, security is an essential factor that you need to consider while choosing a crypto exchange.
Most of the exchanges verify “Know Your Customer” and ask to connect your bank account. You should always be careful before choosing a crypto exchange. Here are a few things that you must consider before you choose a crypto exchange.
- Security features of the crypto exchange
- Reviews of the exchange
- Exchange fees
- Payment options
- User interface
Another way to buy bitcoin is by using gift cards. Sometimes it can be cheaper to purchase bitcoins through gift cards. Many online and offline retailers offer gift cards. All you need is to purchase them from the retailer and trade in any exchange that accepts gift cards.
Although it’s a great way to buy bitcoin with less money, you must be aware of the scammers. One thing to keep in mind is that each seller is different. So some of them may ask you to show the image while others only need the digital code.
Peer to peer network
Suppose you don’t want to buy bitcoin from any exchanges or public platforms. You can buy from an individual seller. Earlier, when bitcoin was emerging, people used to buy bitcoin from a seller in their house. Today, people make transactions in public places with all the precautions.
In some cases, sellers or buyers are not open to one-on-one meetings. They can look for a local meetup to make the transactions in a group and learn the different processes. However, you must be careful while making such transactions.
However, you must be careful while using such online platforms as they involve some risks.
Last but not least, you can also invest in an investment trust where you don’t buy bitcoin directly. It’s quite different from all of the above options. Instead of buying, you invest in the shares of an investment trust that collects money from the public.
Know About The Risks Involved In Buying Bitcoin
It’s not enough to know how to buy bitcoin; it’s also crucial to be prepared for the risks involved in it. Understanding the legal status and other risks associated with bitcoin can help you make a better decision while buying bitcoin.
Although a decade has passed since Bitcoin emerged, some countries still don’t allow any crypto transactions. First of all, you must know whether it’s legal to use Bitcoin in your country. Second, you shouldn’t involve any illegal activities with Bitcoin. You must ensure that you are paying the taxes if it’s taxable in your country.
So if you want to buy Bitcoin, you must consider your locations. Also, you need to be aware of the usage and tax treatment on Bitcoin in your country. Different countries treat Bitcoin differently, so you should learn about them in advance to avoid any legal disputes in the future. Apart from these, there are few other risks you should be aware of before buying Bitcoin.
You must consider other risks such as protection risk, decrease in the value of Bitcoin. Although there are many platforms that claim they are secure, they don’t offer security as banks do.
For instance, if the crypto exchanges got hacked by hackers or lost their business, you may lose your money. So choose a crypto exchange that offers insurance for your loss. Although they have a very limited fund for insurance, you can get some money back if something goes wrong with the exchange.
Best Practices To Buy Bitcoin
Now, you have understood how to buy bitcoin. However, you should follow these best practices to keep your money and digital cash safe and secure.
- Keep your private key in a safe and secure place that you can access when you need it.
- Use an offline wallet to store the Bitcoins when not in use. For example, you can use a hardware wallet to store the bitcoins when you are not trading.
- Know the legal status of Bitcoin in your country. If it’s legal, learn about the fiscal treatment of Bitcoin in your country.
- Take necessary precautions while making transactions with an individual seller.
- Consider the essential factors while choosing a Bitcoin wallet and crypto exchange.
Finally, I hope the above information has helped you to understand how to buy Bitcoin. You must be careful about the risks associated with Bitcoin. Although some crypto exchanges offer wallet services, keep in mind that it’s not their primary business. Next, never forget to check the reviews and feedback of crypto exchange from users.
Remember, Bitcoin is a risky investment option. So you must invest that much you can afford to lose. Ensure that it does not impact your financial career if something goes wrong. Lastly, please ask your queries and share your opinion on this post.
Martin Tucker is a passionate writer and loves to write on technology, lifestyle, finance, business, and cover all the trending topics. He completed his education at Stanford University and obtained a Bachelor’s degree in Psychology. Now, he is a valuable contributor to Online Marketing Tools, Smart Business Daily, And Emblem Wealth, RSL Online, SB News Room.