Cryptocurrency is relatively young compared to the traditional banking system but believe it or not, it has been sending waves to the market since it started. It is acting as a game changer in our current period. It is gaining its popularity but due to how complex it is, many people still don’t understand it.
The fact about cryptocurrency to put it in a simpler term is that it is restricted files or data kept in a computer that nobody can change without executing specific conditions. It is also decentralized. Nobody can control it and to be able for it to work, everybody should agree to keep it going. A single entity that disagrees in the network even for a simple matter, everything is shattered. What cryptocurrency needs to have everything run smoothly is an absolute consensus among peers.
As years pass by, more types of crypto currency are coming out in the market but Bitcoin has stood out among them and still prospering.
What is Bitcoin?
Many people keep on asking what Bitcoin (BTC) is. Even the most tech-savvy of us are having a hard time comprehending about Bitcoin. It is an intense topic and an often point of dialogue among investors, entrepreneurs, and stockholders. Bitcoin actually is a type of cryptocurrency that uses blockchain that records every transaction made by bitcoin or any cryptocurrency. It is a digital or electronic currency that can be used to acquire and sell commodities online who accepts bitcoin as the mode of payment. No bank, country, or any third party can control the transactions. With this, it is only the authorized parties who can retrieve the data.
Although bitcoin has many rivals in the market, it is still the first and most used by many traders.
The creation of Bitcoin was on 2009 by Satoshi Nakamoto, a fictitious name but originally, bitcoin.org is already registered on the internet in 2008. Since its launch, bitcoin has been causing the fastest growth among the different types of cryptocurrencies known in the market.
One of the main strong points of Bitcoin is its operating system that is 24/7 so the trade is non-stop. This makes it more convenient than the traditional procedure we have to get used to.
Buying Bitcoins
After learning about Bitcoin and you now decided to buy your own coins, you must take the necessary steps before fully enjoying its benefits. These steps include:
- The first and foremost step is to have a bitcoin wallet by setting up one.
- Once you have a bitcoin wallet, you can now buy Bitcoins with the use of your credit card, debit card, bank transfer, PayPal or at any Automated Teller Machine. Do take note that the price is not consistent, in buying bitcoins the price varies in the market.
- The currency will be put in your wallet once payment is completed.
The most important reminder is: Don’t forget to look for a secure wallet to maintain your bitcoins’ safety. Bitcoin is not the same with what you’ve been using in your day to day transactions so you must read and understand the things that you needed to know. It is your responsibility as the user to keep your money safe so you must pick your wallet wisely.
Once all steps are finished, congratulations! You are now a certified bitcoin user. But you may be thinking about what is the safest way to buy Bitcoin. There are many ways or methods that you can use and we’ve collected the necessary information you needed.
Choosing an Exchange: Which is the Best Bitcoin Exchange?
Since you have already your bitcoin wallet and verified account that allows you to do transactions like buying, you will now have to look for an exchange. Your concern now is which is the best bitcoin exchange to choose.
The marketplace where dealers can purchase and sell bitcoins is called Bitcoin Exchange. It is not a physical market but digital. There are several questions in this area that one must consider.
There are many things one must look after when choosing a bitcoin exchange. It is undeniable that there are a lot of platforms that offer the same thing but a trader must examine the following:
- How reliable the platform is? Pick an exchange with a good reputation. You can do this by checking the reviews of traders online, friends, relatives, and colleagues who are or have been using the platform. A reliable platform shows that you can be safe with them.
- If a problem arises, how quick does the Exchange take action in resolving the issue? As a customer, for sure you want a smooth transaction but if there are uncontrolled events, you want also a quick action to save your time, effort, and additional expenses. During the trouble, how efficient was the customer support? Did they give the appropriate help needed by the customer? A good exchange knows how to value its customers and not just the money it can get from them.
- Is the exchange approved by regulators? Over the years, bitcoin exchange has been growing and expanding from countries to countries. Some of these are regulated and many are not. A regulated exchange is more secure than the unregulated ones because, in times of problems like hacking, the government can try to impose proper measures to see if the exchange is liable or not over the incident. With this, people or traders can still have hope that they will not lose their money.
Coinbase, Gemini, and Bitstamp are just a few examples of exchanges that fully comply with the regulations.
- For every fee the Exchange collects, are they reasonable and well informed to the traders? No hidden charges? All exchanges need a fee to keep the business going but are these fees reasonable enough? Are the fees well explained to you? To be able to maximize your money, you have to compare the fees of each exchange. Do bear in mind that the fee changes depends on the payment process you choose. Binance, Kraken, Bitstamp, Gemini, etc. are exchanges that you can choose from that have low fees. You just have to remember that your location can also be a factor for a fee increase.
- Is the Exchange secure enough? There are a lot of hackers circling around the internet looking for their prey. For sure you would not want to be one of their victims. Since the deal is done online, the system getting hacked is unavoidable. But the question is how quick is the exchange to be on the move to stop the advancement of the problem. You have to do thorough research about a platform before transacting business with them to keep your money, information, and time securely. A trusted platform is also backed by trustworthy investors and millions of users.
- Is your Information safe in the Exchange? When buying bitcoins through an exchange, you have to consider if how secure your information is with them. There are many options in purchasing bitcoins like bank transfer, debit or credit card, PayPal, bank account or and transfer and so on. So far, the most private way of buying bitcoin is with the use of cash or cash deposits.
- When Buying Bitcoins, is there any limit? Before buying bitcoins, you have to make sure or check whether or not the exchange has any limits in buying bitcoins. All exchanges are doing business but they have different rules and regulations. There are also some conditions with the payment method you use.
- How soon do you want to Have Your Bitcoins? For beginners, it is not easy to have your bitcoins the way you want it. It might take you some time before you can get used to it. Most exchange platforms are also technical so if you’re not the tech-savvy type of person, take your time exploring. Consider also that the type of payment is one factor of how fast your coins can be delivered to you. If you know someone in your area who sells bitcoins, good for you because you can have them instantly. The downside is, you must be careful with fraud people. Another way is through bitcoin ATMs. If you have them near you then you’re one of the lucky guys.
- Geographical or Area of Service. Though exchanges are expanding and flourishing, there are still countries that do not accept the use of bitcoin. It is always a reminder that you need to check the exchange you want to connect with if it is available in your country.
- Verification Requirements. Majority of the exchanges especially the regulated ones require personal information verification through the use of an ID. There are also platforms that allow you to remain anonymous. Pick the one that you’re more comfortable with.
Communication Barriers
While Bitcoin is having a drastic growth worldwide, you must consider that the host country for an exchange plays an important role in the business. Not all countries have the same terms and conditions regarding Bitcoin. There are countries that fully support Bitcoin and some are less to no regulations at all. Language barriers, time differences, and international long distance fee are few of the additional problems if something goes wrong. It is a wise step to look for an exchange that can use your own language or a language that you can fully understand.
Although all exchanges have fees for transactions, the price should also be taken into consideration. Look for the lowest cost so you’ll use be able to make the best use of your own profits. A trading platform that is secure and a Bitcoin exchange that has strong security measures is another thing to think in making a decision. Poorly executed software signifies security risk.
If you are a new trader, picking an exchange that is novice-friendly is the wisest advice for you. Some platforms are designed for those who are tech-savvy and expert traders. Coinbase is a platform that is very popular yet designed for starters. Not only that, but it is also one of the most secure and with high trading partners.
Lastly, find an exchange that has numerous trading partners and top liquidity. The thought of liquidity has many sides to it. Another way of defining liquidity is the capability of an asset to be turned into cash easily on demand. Another way of examining it is an asset can be bought or disposed at its fair cost. Liquidity means that there are no discounts or premiums connected to it throughout buy or sell and it is convenient to enter and exit the asset.
The higher trading volumes accessible on a certain exchange, the more reliable a bitcoin exchange is on the market. If you are planning in buying and selling a larger quantity of bitcoins, you must consider exchanges where high trading volumes are accomplished.
Trading quantity records provide a proper indication to the traders about the liquidity on a market throughout a given duration of time. It can be used as a beneficial indicator as well during the trade for studying the market.
Summary
Entering Bitcoin is not a game. It can cost you your hard earned money if not careful on the transactions and choices you make. Always remember that once the transactions are already committed or confirmed in the system, they can’t be changed and canceled. Check every details and transaction properly to waste of time and money. Check also the right exchange that caters for your needs.
Payment Methods
So now you’ve decided to have your own coins, the thing is you don’t know where and how to buy them. Listed down below are the details you need to know that will help keep you going.
- You can buy bitcoins from a friend or someone near you using cash or cash deposit.
Buying Bitcoin personally from another person can be one of the quickest and anonymous approaches to obtain bitcoins. In most cases, you need not to give documentation that certifies your identity or wait for the confirmation period. In paying cash face-to-face, there is no need to divulge your name, address, or any personal details to the person whom you are transacting with. Being the fastest method, you normally can have your bitcoins within a few couples of hours.
Direct buying may be fast and more convenient but it can be costly. Cash exchange in the market generally ranges from 5 % and above. Another challenge also is finding a reliable and upright person eager to sell bitcoins. If the person you’re dealing with is not a reputable one, high chances that you’ll get scammed. Always be alert to avoid being robbed.
- Acquire bitcoins online with a credit /debit card or bank transfer.
Credit or Debit Cards: Majority of the customers is using credit and debit cards for their daily lives thus they want also to use it in purchasing bitcoins. This is another way of having your bitcoins instantly. On the other part, this advantage may also come at a price, given that many cryptocurrency exchanges impose a rate of about 4% for purchases made via credit or debit cards.
Another pitfall for the use of a credit card is that your privacy is revealed. You need to provide an identification card to be able to buy.
You can buy bitcoins via credit card with:
- Bitstamp
- Coinbase
- Bitpanda; etc.
There are many exchanges that accept credit or debit cards when buying bitcoins. Do make sure to check the reputation of the exchange before having any transaction with them to avoid losing your money.
Bank Transfer or Bank Account: There are some countries that accept bank transfers but you have to check well on their website to avoid confusion. The use of bank transfer when obtaining bitcoins will result in the cheapest price and also a good approach when you want to acquire more bitcoins. Just like the other methods, the use of bank transfer or bank account also has downfalls. ID verification is required just like credit or debit card process and another thing is it might take up to 5 days to finalize the transaction. You can buy bitcoins through bank transfer/bank account from:
- Coinbase
- Gemini
- Bitstamp
- Kraken; etc.
Check the status of the exchange in your country because some exchange only allows bank transfer or bank account transaction in certain countries.
- Get Bitcoin using PayPal
Under PayPal’s terms and conditions, users are not allowed to acquire bitcoins using PayPal as payment. There are accounts being shut down when PayPal suspected of bitcoin and cryptocurrency trades. However, there are some ways to keep the business going. You can actually buy other goods or digital items using PayPal then sell those items for bitcoin. If you choose this option, make sure also that you’re ready with the high charges of PayPal that’s more than 12%.
- Purchase bitcoins from a Bitcoin ATM.
Using ATM to purchase bitcoin is another convenient and fast way to have your coins instantly. It is also more anonymous since an often time there is no need to provide personal information. The drawback is the usual high fees.
FAQ
1/ What is Bitcoin?
Bitcoin is a structure of digital money which is based on an open supply code that was created and is held electronically. It is a decentralized monetary system which means that it does not belong to any government institution and is not managed by anyone.
2/ Who created Bitcoin?
Satoshi Nakamoto is the one said to be behind Bitcoin but is claimed to be a pen name because there is no evidence to prove his real identity.
3/ How Do Bitcoin Transactions Work?
From the ultimate user part, using Bitcoin is exceptionally simple. It can be based totally on software on your computer or an app on your cellphone. You can send or receive Bitcoin (BTC) to and from your wallet through the software. The wallet has a special encrypted set of numbers and letters which is linked solely to your software and no one else’s.
Other traders can send money to your wallet and you also can do the same to other wallets on the BTC network. When using a cellular phone, QR codes often appear which make the manner of paying BTC to a different user a lot simpler. All you have to do is scan the QR code and affirm the amount of BTC you want to transfer.
On the part of the Bitcoin network, the transactions are rather complicated. Every transaction is publicly shared on a Bitcoin community on a ledger called the “blockchain”.
This ledger consists of every single transaction ever made, which offers complete transparency for every transaction and grants any computer on the organization to confirm its validity. A digital signature is linked to every transaction, which corresponds with the sending address.
This is accomplished to provide authenticity to each transaction and allow all users full authority over all bitcoins which they can send from their Bitcoin address. Additionally, customers who have high-end hardware can use it to authenticate these transactions as they go thru and in turn are rewarded with bitcoins for their services, this is called “mining”.
4/ Who controls Bitcoin?
As noted earlier, the Bitcoin currency structure is not controlled by anyone. The organization is decentralized and as a result, no government has any power over it. Those who have real control over Bitcoin are the traders and businesses that have invested in it, mine it, or use it for purchases.
The Bitcoin software program is developed in a unique way. In order to be in a position to use Bitcoin, you have to have a suitable version of the software program which complies with an equal rule. It simply means that all users should be on the equal page in order to be able to engage in the Bitcoin revolution.
The builders of the software program are constantly improving the code and making Bitcoin even more secure. Since the customers are in power of which agreement and versions to use, the developers can’t pressure modifications to principal aspects of the Bitcoin code.
Bitcoin software will only work properly if the customers and the developers adhere to an entire consensus among each and everyone, therefore it is in everybody’s best concern to shield this consensus.
5/ How can you get Bitcoins?
There are 4 methods to get Bitcoins.
The first one is obviously easy and self-explanatory: you offer goods or services exchange for Bitcoins. No other conditions attached, simply decide the price for your service or goods in BTC then make the transaction. The client will then send the right amount to your wallet and once received you will serve the needed service or goods.
Second is to make a purchase via Bitcoin exchange. There are many various sites that are accessible where you can search for Bitcoins buyers and sellers. You must also link your Bank account to the exchange site to be able to make purchases. There are other exchanges that allow you to obtain BTC with other forms of payment, such as PayPal but usually, there are extra fees included when using these different payment schemes.
Number 3 option is a little bit less private and undisclosed. You can look for a person nearby who is offering to seal BTC and pay in cash.
The last option and seems the most appealing to some users is called “mining”. Bitcoin mining is a method of which negotiations on the Bitcoin network are certified and saved on a blockchain ledger which keeps the record of all Bitcoin transactions.
6/ Is Bitcoin legal?
Bitcoin is legitimate in almost every country. Only a few have prohibited the operation of bitcoin in their country. Make sure that you have checked the status of bitcoin in your country before buying.
7/ Can you sell Bitcoins?
Absolutely you can sell bitcoins. You can either sell directly to your friends, families, and people you know or use other exchanges by registering in their platform as a seller.
8/ When is the Right Time to Buy Bitcoins?
You need not to worry because bitcoin operates 24/7. Price changes every second but there are tools that can help every trader analyze charts.
9/ Why there is a need to Upload ID for some exchanges?
Most regulated exchanges require you to upload an ID for the verification process. It is implemented because of the Know-Your-Customer Regulations (KYC). Its aim is to document the real world identity of their customers.
How to Avoid Scams
Scammers have been around since money was created. They began to prosper as years pass by and became more active using technology to their advantage. In order to protect yourself from scammers, know what the scams that you must be on the lookout for.
- Check for phishing activities
This is the most popular and constant cryptocurrency scams worldwide. The aim is to collect important and sensitive data from the user such as passwords, usernames, bank or card details, etc. In cryptocurrency, phishing scams invade cryptocurrency exchange passwords, private keys, digital wallets, etc. This process commonly achieved thru a fake internet site that looks like a licensed one. People who join these websites enter their data and the website owners can simply take the information and use for their own needs. Phishing is so famous scam because it is convenient to operate, requires basic technical knowledge, and does not require a lot of money. It is generally done through email.
- Be careful of malware downloads
The internet era has carried numerous malware, viruses, and other problems in today’s generation. Unfortunately, scammers can make easy money online with alarming downloads. Make sure not to click on anonymous email attachments and possibly unreliable links.
Beware also of bitcoins being used as bait. For instance, a social media post that says you can mine bitcoin just by downloading a program or a link to an alleged bitcoin exchange that provides freebies to get you started. It should be treated as a red flag. There are many safe, secure, and legitimate cryptocurrency exchanges but you have to do more research with Google or sites that have credible reputations.
- Do Your Research
It is easy to make an enticing story to attract traders to conduct business. If you chose one exchange that you want to deal with, perform a background check. You can do it online by checking the reviews about it and other user forums. Protect yourself. For peer-to-peer exchange like LocalBitcoins.com, LocalMonero, or BitQuick, if they have positive feedback online then it’s more likely a reliable source.
- Avoid Bitcoin Investments
Since bitcoin is progressing, many swindlers are trying to take advantage of it. To avoid getting scammed, don’t fall for promises that are unbelievable.
- Stay away from unregulated brokers and exchanges
There are numerous unregulated online exchanges and brokerage firms that offer cryptocurrencies and cryptocurrency trading products. Investors should be cautious of too-good-to-be-true promotions and guarantees fast money. Once you’ve deposited money, many of these companies will ask you for high commissions or make it very challenging to withdraw funds. Some of them will completely take your money. Always check how credible an exchange is before giving your trust.
Secure Your Coins
The only person whom you can trust in keeping your coins safe is yourself.
Choose your wallet wisely. Before having a bitcoin, you must also think of how to protect them. Bitcoin wallet or simply “wallet’ is the key. Rather than physically protecting your bitcoin, it holds the personal key that authorizes you to obtain your bitcoin address. A wallet holds numerous personal keys and many bitcoin traders have a different wallet.
Wallets can either stay on your pc and/or cellular phone, on a piece of paper, or on a physical safe-deposit gadget.
The use of Bitcoin makes the life of many busy people easier but if not well protected; it can cause a huge loss. To minimize the occurrence of such situation, you must adhere to the terms and conditions set by the platform. You also play a huge part in protecting your own money.
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