Before you can buy Bitcoins or any other crypto coin, you’re going to need a wallet to hold them.
Wallets are programs that help you send and receive Bitcoin. They generate your Bitcoin address, which serves as your personal address for receiving Bitcoins. If you’re buying small amounts of Bitcoin, you can use any trusted software wallet. It could be a mobile wallet or a desktop wallet, it doesn’t really matter. For large amounts of Bitcoin though, you’ll want to use only Hardware or Paper wallets. These wallets aren’t connected to the Internet, and so they eliminate the possibility of someone stealing your funds unless they’re actually holding your physical wallet. Once you choose your wallet, open it, and copy your Bitcoin address.
How much money do you intend to invest in Bitcoin?
Bitcoin is a VERY risky asset. This means you should never buy any amount you can’t afford to lose. It’s important to think this through. If this is the first time you’re buying Bitcoins, choose an amount that won’t affect you financially if Bitcoin were to drop to zero.
In general, we tend to be overly optimistic when we invest, and we forget about the very real possibility of a downside. Our personal rule of thumb is to never invest more than 5% of your disposable income or total wealth. Keep in mind that you can always buy less than 1 Bitcoin. One bitcoin can be divided up to 8 decimal points. This means that you can buy half a bitcoin, a quarter of a bitcoin, or even one-hundredth of a bitcoin. Of course, the amount you’re going to spend on Bitcoins will lead you to your next step: choosing an exchange.
Choosing an reliable exchange is hard work
Each exchange has different rules, accepted payment methods, and fees, along with other factors to take into account.do your own due diligence, however, here’s what you need to look out for.
- Always check that the exchange accepts users from your country. Not all exchanges accept customers from all around the world.
- You’ll want to check is what payment methods are accepted by the exchange. Some exchanges accept a wide variety of payment methods, and some accept only wire transfers. Payment methods that allow the buyer to request his money back, like credit cards or Paypal, will usually be accompanied by higher fees. This is because the seller is taking the risk that you’ll cancel the payment after you get your coins. On the other hand, payment methods that can’t be reversed, such as wire transfers, are usually cheaper.
- How much you’ll need to pay in fees for your transactions. There are three kinds of fees: deposit fees, transaction fees, and withdrawal fees. Each one is different and can affect the total amount of money you’ll receive in the end.
- Do your homework on the exchange rates. some exchanges have low fees, but their exchange rates are higher relative to the competition. This means that the fees are “hiding” in the exchange rate.
- Know your buying limit. Your buying limit will depend on your payment method and your identity verification level. If you’re looking to buy a large amount of Bitcoins, some exchanges won’t allow it due to their low limits.
Finally, you’ll want to check out the exchange’s reputation ?
- Is it well known in the community?
- How well is the support in the event you get lost in the process?
- Have there been a large number of complaints against the exchange?
- Keep in mind that no exchange is free of negative reviews, but it’s important to consider the volume and the content of those reviews.
Now that you know how much you want to spend and you’ve chosen your exchange,
it’s time to make the trade. Sign up for the site you’ve chosen and complete the registration process. Most exchanges today will have a Know Your Customer process, also known as KYC, that you’ll have to go through. This means you’ll need to supply the exchange with some additional information like your ID, proof of residence, and in some cases even proof of income. As Bitcoin has become more and more mainstream, exchanges have become subject to stricter regulations by governments, and in many cases, they’re unwillingly forced to request this information from you.
Once you finish the registration and your identity is verified, you can finally buy your bitcoins.
All that’s left for you to do now is go and get your first Bitcoin.