Buying bitcoin can be both daunting and complex. We’ll show you the easiest way to purchase your first bitcoin.
The desire to buy Bitcoin needs no introduction. The original cryptocurrency barged its way onto the financial landscape over a decade ago and went on to inspire a mixture of bafflement, scepticism and excitement. Famously, its astronomic rise in value against fiat currencies made early adopters a lot of money. Over 10 years later, it remains an intriguing commodity to many investors considering buying bitcoin. Skip ahead to our step-by-step buyers guide if you’re up to speed and ready to invest.
Here’s a list of the safest places to buy bitcoins
We have rounded up, researched and rated the top websites, apps and brokers to buy bitcoin with. Click below to begin buying bitcoin, or read on to find out more about Bitcoin in 2020.
What is Bitcoin?
Created by a unknown group of developers going by the pseudonym Satoshi Nakamoto, Bitcoin emerged in 2009 as a radical electronic payment system designed to offer an open, decentralised alternative to traditional government-issued fiat currencies. A digital cash of the future, if you will.
How does Bitcoin work?
Bitcoin depends on a decentralised network of ‘miners’ who collectively grant the Bitcoin network its authority to verify online transactions. This means, the community both runs and approves transactions.
Bitcoin mining utilises high-powered computers to solve extremely complex mathematical problems and, in so doing, add blocks of transactions (in the form of digital information) to the ‘blockchain’, a distributed public ledger.
This ingenious peer-to-peer network creates a payment system that functions without the need for centralised, authoritative oversight.
How to buy Bitcoin online – step-by-step guide
Step 1. Get a suitable wallet
A wallet allows you to store your BTC securely. It’s a good idea to have one ready before you buy Bitcoin if you’re planning on sitting on the investment for a while – it’s a far safer way to store cryptocurrency than leaving it on the exchange. There are plenty of good options, including:
- Ledger Nani X: Ledger Nano X is a hardware wallet, which means you can store your BTC (along with 30 other cryptocurrencies) offline on a super-secure wireless device.
- Exodus: Combining smart, feature-packed functionality with a stylish, intuitive interface, Exodus is a desktop wallet that should suit both newbies and experienced users.
- Coinomi Wallet: If you want an BTC compatible wallet that will work on your phone, look no further than the Coinomi Wallet. This multi-coin wallet supports iOS, Andriod phones and there’s also a Mac/Windows/Linux desktop client.
Step 2. Find a Bitcoin exchange or broker
There are plenty of exchanges on offer if you want to buy and sell Bitcoin. Each has advantages and disadvantages, so it’s a good idea to do a bit of research. To get you started, here are two of our favourite Bitcoin exchanges:
- Binance: Widely considered to be the best, most dependable place to buy bitcoin, Binance is the world’s biggest crypto exchange. It offers a huge crypto marketplace and fees that compare favourably with its main competitors, plus a well-designed mobile app.
- Etoro: The worlds largest retail trading platform. These guys originally only offered CFDs, however today you can buy and own several cryptos too. This is a good option if you’re wanting to play with both investing and short-term trading.
- Bittrex: Boasting a slick, easy to navigate interface and speedy transaction times, this US-based exchange supports over 200 currencies and direct BTC purchases using major fiat currencies. A Bittrex mobile app has recently been launched.
Step 3. Withdraw your BTC
In the interests of securing your BTC, it’s a good idea to move your currency out of the exchange and into your wallet as soon as possible. To withdraw your bitcoins to your wallet you need to generate an address then paste it in the relevant field of your exchange account.
How to trade Bitcoin– step-by-step guide
If you’re only interested in trading bitcoins you needn’t worry about getting a suitable wallet because trading involves taking a position on a currency rather than acquiring it. This means you can potentially make a profit from BTC without the hassle and security risk of owning it.
Step 1. Find a broker
If a broker offers crypto trading, it’s bound to offer the purchasing of Bitcoin, which remains the most widely traded cryptocurrency on the planet. Plus500 and eToro are two of the most popular BTC trading platforms.
Step 2. Deposit money
Most trading platforms will allow you to deposit fiat money (USD, GBP, EUR etc.) and most accept common payment methods such as PayPal or credit and debit card. It’s worth noting that trading platforms offer leveraged trading, which means you don’t have to put down the full value of a trade. Instead you can pay a deposit, known as a ‘margin’. This means you can potentially make bigger profits and, of course, bigger losses.
Step 3. Decide how you’d like to trade
There are two methods to trade cryptocurrencies: CFDs (contracts for difference) and Spread Betting. Both methods essentially entail speculating on the price movements of your chosen currency. If you aren’t sure which option to go for, we recommend researching the differences between spreads and CFDs.
Step 4. Start trading
If you’re a complete novice we recommend starting with a demo account and familiarising yourself with the process and the platform. Cryptocurrency trading is extremely volatile, which means you can make and lose money very quickly. Bitcoin is prone to fluctuation, which makes it an intriguing prospect for traders who look to exploit volatility.
As a Bitcoin trader you’re speculating on the currency’s price movements by taking a short (sell) or long (buy) position. If you think Bitcoin will fall in value you should take a short position, if you think it will rise in value you should take a long position.
You may choose to incorporate leverage into your trading strategy. Leveraged trading allows you to put up a fraction of the trade’s value as a deposit or ‘margin’. This can be risky, though, so make sure you have a stop loss in place for damage limitation.
- Overall info
- Buying & selling
- Using bitcoin
- How bitcoin works
- Bitcoin as an investment