For those who are new to Bitcoin, getting their hands on their first batch of the cryptocurrency can be confusing, if not scary, to the point of making them re-consider buying in the first place. However, things don’t have to be this way. Buying Bitcoin is a very straightforward process that is easy to understand and follow. All you need is just a little help. So, if you too are looking to buy your first Bitcoins but are not sure how to do this exactly, here’s an easy beginner’s guide to the whole buying process.
1. Get Your Bitcoin Wallet
The first step to getting your own Bitcoin is to find a reliable Bitcoin wallet you will use to store your cryptocurrency. Bitcoin wallets are similar to real wallets as they keep your bought Bitcoins safe.
But instead of storing digital coins, Bitcoin wallets actually only store a digital “key” that is used to access the public address of the Bitcoins you’ve bought and authorize transactions between you and other users or merchants. There are several types of wallets you can find today, each offering its own advantages to users.
Desktop Bitcoin Wallets
Desktop Bitcoin wallets are a great solution for anyone that wants to send and receive Bitcoin payments more frequently through his computer or laptop or anyone looking to transition to hardware wallets in the future, as most desktop wallets are also compatible with hardware wallets.
However, desktop wallets are not recommended for keeping large quantities of Bitcoin unless they offer the option for “cold storage”, i.e. setting up another device to actually store your keys in that you’ll keep unconnected to the internet.
Online Bitcoin Wallets
Online wallets store your keys online, giving you the option to access your Bitcoins wherever you find yourself in. Online wallets can also be found at Bitcoin exchanges and some of them even come with additional mobile and desktop apps you can use to manage your cryptocurrencies.
Online wallets are best used by someone with a small cryptocurrency fund unless the service can provide “cold storage” options or other ways of protecting your investments.
Mobile Bitcoin Wallets
The most practical solution for many users, mobile wallets are apps that let you store your private keys and use your phone to make purchases with Bitcoin. Most mobile wallets also support NFC transactions that can be done with just a tap of your phone against a payment terminal, without providing any extra information. There are also mobile wallets out there that can be used with smart-watches.
Hardware Bitcoin Wallets
Hardware Bitcoin wallets are a more pricey solution but they are one of the best options if you want to store multiple coins. There are but a limited number of hardware wallets available today and most of them offer “cold storage” without access to the internet as well as more advanced security measures.
Paper Bitcoin Wallets
Paper wallets are cheap printed pieces of paper that contain a QR code you can use with a wallet app to access your keys and Bitcoin address. Although more secure than online wallets, they can also be easily lost or damaged, which is why it’s better that you have multiple copies of your paper wallet that you will store in secure locations only you have access to.
2. Buy Your Bitcoins
If you already have a Bitcoin wallet, the next step would be to buy some Bitcoin to store in your wallet. There are two common ways people buy Bitcoin today. Choosing what option to take will depend on how advanced a user you are but also how you want to pay for your cryptocurrency:
- Buying Bitcoin through a Bitcoin exchange – Bitcoin exchanges are the most widely used solution for new users looking to buy Bitcoin. Deciding which exchange to use will depend on a number of factors, the most important being the fees, the list of accepted payment options, and the security of the exchange itself.
- Buying Bitcoin from a person – Bitcoin can also be bought and sold in person by using Bitcoin wallet addresses or QR codes to authorize transactions. Services like Local Bitcoin help you find a local Bitcoin seller and arrange a meeting while also offering guides as to how to handle the transaction. You can also buy Bitcoin from someone you know.
A word to the wise – If you’re not sure how the whole buying process should work, it’s better if you don’t attempt buying Bitcoins from a person until you are better acquainted with the risks of in-person transactions and how to protect yourself from them. If you need more information about this process, you can find more help in our guide to Where to buy Bitcoins?
3. Store them in Your Wallet
The last piece of the puzzle after you’ve successfully bought your Bitcoins is to store them in a safe location. If you bought Bitcoin through an online exchange, it’s better if you move your Bitcoins to a safer wallet. To do this, just use the tools available in your exchange wallet and the address of your desktop, mobile, or hardware wallet. You can also find help on how to do this at your Bitcoin exchange.
Things to Keep in Mind When Buying
Before you buy your first Bitcoins, you should keep in mind that Bitcoin’s value and price can change rapidly from one minute to the next, so buying 1 Bitcoin or a portion of it (mBTC) can end up costing more or less within certain times of the day and week.
Also, most exchanges nowadays ask you to verify your identity first before you are allowed to pay for Bitcoin with regular (fiat) money. This process can end up lasting several business days, during which the price can change significantly. Moreover, you should also consider whether buying or owning Bitcoin is legal in your country. If it’s not, you will be buying the cryptocurrency at your own risk.