Where and How to Buy Bitcoin – Safest top 10 Sources to buy Bitcoin by CoinTrust.com
Ever since the rise of the internet, loads of disruptive technologies have been introduced, which includes Bitcoin. Although the bitcoin has been in existence for about 9 years, people all over the world have started recognizing it only in the last couple of years. Bitcoin is the first of its kind, which started in 2009 by an anonymous man known by the name ‘Satoshi Nakamoto’. His objective was to provide the world with a decentralized currency which can’t be controlled or manipulated by a single government or organization.
Bitcoin has increased thousands of times its initial value. Japan has officially legalized the bitcoin as a currency. Many merchants from all over the world started accepting bitcoin as one of their official payment methods. Successful entrepreneurs such as Mark Cuban, John McAfee, and many more are seriously backing this cryptocurrency. Several tech and financial gurus predict that the bitcoin can go much higher than its current value.
Where to buy Bitcoin
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If you think that you’re late to the party, you must remember that it is better to be late than never. If you seriously consider buying some bitcoin the first step is to educate yourself about several things that are required before you go ahead and make a purchase. The technical jargon may confuse you in the beginning, but it all gets simpler after learning about the process. So, let’s get down to learning how to buy bitcoin.
There’s a brief process involved in buying bitcoin. In the beginning, it may seem complicated, but hang on. Everything starts to make sense once you’ve understood the process. In this article, we are going to get acquainted with the whole process involved in buying bitcoin.
Getting a Bitcoin Wallet
The first thing to do is make sure that you have a wallet to store your bitcoins. It is recommended that you store your bitcoins in a wallet instead of leaving them in the exchange or broker you bought them from. There’s a serious risk of cyber hack attacks on exchanges and you shouldn’t take a risk in the beginning. Store your bitcoins in your wallet. There are about 20 types of bitcoin wallets. It can get very complicated to review and decide a good wallet for you. So, here are the top 4 major types of bitcoin wallets:
The wallet where you are the one and only owner without any involvement of a 3rd party is simply an Independent wallet. Bitcoin Core is the first ever independent bitcoin wallet which paved the way for the creation of many more independent wallets. While security is the best advantage of an independent bitcoin wallet, there’s a disadvantage as well. Since you are the only person responsible for your bitcoins, committing any tactical error can spell doom. You lose your coins if you lose any kind of sensitive information related to your independent wallet’s access. Independent bitcoin wallets are usually harder to setup than any other type of bitcoin wallet.
Third Party Bitcoin Wallets
Other than the fact that you are keeping your bitcoin in someone else’s hand, third party bitcoin wallets are extremely easy to setup and beginner-friendly in nature. Another advantage of this type of bitcoin wallet is the ease of access from anywhere in the world via the web. As long as the company holding your wallet is safe and secure, you wouldn’t have any issues. Almost every third party wallet provides you several safety measures such as 2 Factor Authentication. Make use of this feature to ensure the safety of your bitcoins.
Physical and Paper Wallets
Physical wallets are usually the most secured ones. Bitcoins can be stored in physical wallets which are usually flash drives. The other category which is Paper wallets may sound simple. After all, it comes down to a set of numbers and letters. So you can simply print your encrypted code on a paper and keep it safe so that no one can find it except you.
Every type of wallet has its own advantages and disadvantages. Choose wisely according to your preferences.
Choosing a Payment method
There are several payment methods you can use to purchase bitcoins. But you should know what fits you the best. Payment method is going to be a major factor that impacts your bitcoin purchase. Several important things such as fee and commissions vary from one payment method to another. You need to choose your payment method carefully while buying bitcoins. Here are a few things that you need to keep in your mind while selecting the payment method for your bitcoin purchase:
Credit and Debit Cards
Almost every exchange lets its customers buy bitcoins with a credit card or a debit card. For the most part, you will be required to submit appropriate documents for verification purposes when you use a credit or debit card. The transaction process is quick and you can have your bitcoins in a matter of minutes.
There are a few e-wallets that you can bitcoin with. A few exchanges provide you with the option of buying bitcoins with several e-wallets. Usually, people use popular e-wallet services such as Paypal and Skrill. But in the bigger picture, a lot of exchanges do not allow the purchase of bitcoins with e-wallets due to the prevailing false chargeback issues.
Bank Wire Transfers
Many sellers prefer this method due to its reliability. Additionally, you get bitcoins for a lower price than card purchases. This purchase method eliminates the chargeback issues.
There are a few websites like Local Bitcoins which supports connecting local buyers and sellers of bitcoin. Usually, this can be a very quick method to buy bitcoin. You get to purchase from a local seller face-to-face. Be careful with whom you’re dealing with in such situations.
Choose your payment method according to your situation. Consider all the options and proceed with the best option for you.
Picking the right exchange
There are a lot of options to choose from when it comes to the bitcoin exchanges. Although people use the term ‘exchange’ for referring to a platform where you can buy and sell bitcoins, there are actually different types of exchanges out there. Here are the main types of exchange platforms for buying or selling bitcoins:
Bitcoin Trading Platforms
This type of exchange connects sellers and buyers through a digital trading platform. The exchange charges a fee for every transaction. The exchange doesn’t hold any reserves of bitcoin. It just helps the transfer of bitcoin between buyers and sellers. These trading platforms are usually responsible for setting the price of bitcoin. Supply and demand of bitcoin in these exchanges is what influences the price. Although you may find these platforms to be a bit complicated, after a couple of deals it becomes easy to use.
This is an easier process to purchase bitcoin, when compared to buying from bitcoin exchanges. Brokers have a reserve of bitcoins, which they sell to investors. The broker sets a predetermined price. Due to the lack of large bitcoin reserves at these brokers, you may sometimes experience delays while buying bitcoin from a broker.
There are some trading platforms which offer the opportunity to make profits on the fluctuations of bitcoin’s price. Simply put, this type of trading is called Contract For Difference or CFD. You can’t really acquire any bitcoins through this type of trading exchanges. You simply can make profits through buying and selling the spikes of an asset.
Some tips on finding the best exchange
- It is prudent to research before investing your money. Use Google to find some reviews about the exchange that you consider buying bitcoins from. Reputation is always an important factor that you need to consider when it comes to bitcoin exchanges.
- Take the exchange rate into consideration. Different brokers offer different rates. Always compare different exchanges before choosing one.
- Look at the number of available payments that the exchange offers. It’s always better to proceed with an exchange that offers multiple payment methods.
- Exchanges charge a fee on your deposits, transactions, and withdrawals. So, always look at the percentage of fee an exchange is charging.
- Verification is mandatory with pretty much every exchange. There are a few exchanges that offer bitcoin buying and selling activities without any verification. Usually, the exchanges that require a verification process are safer exchanges that conduct their business under strict protocols.
- After you decide with the exchange that you want to buy bitcoins from, it’s time for you to proceed and make a purchase of whatever amount of bitcoins you want to accumulate.
How to avoid fraud?
Unfortunately, fraud and the web are synonymous in many respects. It’s not just limited to bitcoin, but since this article is about buying the bitcoin, let’s just focus on avoiding fraud that surrounds bitcoin. If you buy from an individual always verify their trader portfolio before making a bitcoin purchase from them. If a person doesn’t have any credibility, don’t buy from them. If you’re buying bitcoins from an exchange, make sure to read a few reviews about them before purchasing.
If you purchase bitcoins from an individual, the best way to do so is by using an escrow service. Escrow services hold your money until you receive the bitcoins and then transfer your funds to the seller. By buying bitcoins this way, your funds are safe and sound with a trusted third party.
Never leave your bitcoins at an exchange
After making a bitcoin purchase from an exchange, transfer them to your wallet as soon as possible. Leaving your bitcoins at an exchange is not always recommended until you build a long lasting relationship. You may never know what happens to the exchange in the future. So, always protect your bitcoins in your wallet.
By now, you must have hopefully gained insight about the process of buying a bitcoin. Now, it’s time for you to make proper use of this knowledge if you intending to buy bitcoin soon. The whole world is changed with the introduction of cryptocurrencies. Bitcoin, being the first and biggest of the cryptocurrencies has the potential to become something great. The value of bitcoin could potentially reach phenomenal heights. Always remember one thing while you’re investing, ‘Never invest more than you can afford to lose’. Even though taking riskier decisions sometimes pay off, you should always invest according to your financial situation.
Along with buying bitcoin, you can accumulate this cryptocurrency through mining as well. Even though it may not be as easy as buying a bitcoin, it is still a way to accumulate bitcoins. Don’t neglect to follow safety precautions while buying bitcoins from an individual. Do your due diligence and take the safer route to building your bitcoin portfolio.