Bitcoins hit a new high above $7000 per bitcoin in the last quarter of 2017. This has prompted many people to want to buy bitcoins. This article will serve as a simple guide on the requirements of buying bitcoins and how you can buy bitcoins.
For one to buy a bitcoin, they 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 store 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. Usually, ones’ exchange account is linked to a bitcoin wallet for ease of transacting. Factors such as the number of bitcoins one wants to buy and frequency of buying should be considered when deciding which exchange to buy in. Some of the top exchanges include Coinbase, LocalBitcoins, CoinCorner, Bitbargain, and Xapo among others.
- Face to face trading.
One can buy bitcoins from another person. If the buyer knows of a person who wants to sell, they can contact them and negotiate terms of the transaction. Some exchange sites such as Localbitcoins offer a platform where face to face buyers can connect with sellers and negotiate their terms. With a face to face bitcoin trade, the traders agree on convenient methods of paying and exchange rates. Due to security issues and cases of fraud, individuals trading face to face with strangers should meet the sellers in public places.
- 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 wallet. 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
An individual’s choice of payment method in bitcoin trading will be determined by the accepted mode of payment in the place one is buying and amount of bitcoins one is buying. The bitcoin wallet can be connected to a payment method such as credit cards and bank transfers to be used for buying directly.
Many people are fast becoming confident of bitcoins as a form of investment. The buying process is simple to follow. A good place to start buying is exchanges then when one has become conversant with bitcoin buying they can venture into other trading places.