In the first half of 2021, bitcoin hit a new high of just above $64,000 per bitcoin. It has fallen a bit since then but its price is still significantly higher than price levels a year ago. This has understandably generated a lot of interest with many people wanting to know more about bitcoin and how to purchase it. If you want an easy, no-nonsense guide on how to buy bitcoins, you have come to the right place. This article will serve as a simple, step-by-step guide on what is required to buy bitcoins and how you can go about it.
Firstly, to buy bitcoin, you will require a bitcoin wallet. Bitcoin wallets take three main forms: software that is downloaded to one’s computer, an online web-based app that is operated online, and a vault that stores bitcoins offline. Technically, bitcoins are not tangible. Therefore, a bitcoin wallet holds the public and private keys required to make a bitcoin transaction and also indicates one’s bitcoin balance.
Although bitcoins are homogeneous, their price varies in different geographical locations and according to the exchange rate. On some days, the price fluctuates throughout the day. Some people prefer to buy when the price has gone down so that they make some profit when it rises.
Where to buy
Exchanges provide a pool of bitcoin traders that make it fast to transact. You can link your exchange account to your bitcoin wallet if you do not want to store your coins on the exchange-provided wallet. Factors such as the number of bitcoins you want to buy and frequency of buying should be considered when deciding which exchange to use. Some of the top exchanges include Binance, Coinbase, LocalBitcoins, Coinmama, Etoro, etc.
- Peer-to-peer trading.
You can buy bitcoins from other people. If you know of a person who wants to sell, you can contact them and negotiate the terms of the transaction. Some exchange sites such as LocalBitcoins offer a platform where buyers can connect with sellers and negotiate their terms. With a peer-to-peer bitcoin trade, the traders agree on convenient methods of paying and exchange rates. Due to security issues and cases of fraud, if you are trading with strangers using a peer-to-peer exchange is recommended.
- Bitcoin ATMs.
Although a new innovation in bitcoin buying, bitcoins ATMs are gaining popularity fast. These are like regular ATM machines only that they trade in bitcoins. Buyers can insert cash into the machine or scan a QR code to be able to load bitcoins into their wallets. While they are convenient, exchange rates at bitcoin ATM machine are usually 3-8% higher than the standard trading rate.
There are various payments methods accepted when trading in bitcoins. These include
- Credit and debit cards
- Wire transfers
- Bank transfers
- Exchange of one form of cryptocurrency for bitcoins
- Hard cash
- Online payment options such as Skrill and PayPal
Your choice of payment method in bitcoin trading will be determined by the accepted mode of payment in the place you are buying and amount of bitcoins you intend to buy. Your bitcoin wallet can be connected to a payment method such as your credit card or bank account to be used for buying directly.
Many more people now see bitcoin as a decent asset to invest in and the buying process is simple, after the first purchase. A good place to start buying is on one of the main exchanges. Once you become used to the process, you can try other buying platforms.