Step By Step Guide To Buying Bitcoin

For people just getting started, buying bitcoins can be a very intimidating process. There always seems to be so much information on bitcoin and cryptocurrency that people who are new tend to not even bother getting started because they are quickly overwhelmed. In addition, there are misconceptions about how to buy bitcoin and how much you have to buy to be profitable. The purpose of this guide is to simplify the buying process so that you can buy bitcoins instantly from safe and secure vendors.

Within the past year, the word has really started to spread about Bitcoin and the concept of cryptocurrency. However, most people who hear about it go to Google and search "how to buy bitcoin" and are overwhelmed with information. Until recently, purchasing Bitcoin has been a complicated and risky process. Now, reputable companies are starting to warm up to bitcoin and have developed very easy, step by step methods to buy bitcoin with a credit card or a debit card or even your bank account directly.

As time has moved on, more people are starting to realize the viability of investing in Bitcoin as a way to defer taxes, prepare for retirement or just start to build a sizable savings account. Much like gold or silver, Bitcoin can be a great way to build wealth for the long term. In August of 2017, Bitcoin hit an all time high of over $5,000 USD per Bitcoin and industry experts expect it to reach 5 figures by 2020.

Whatever your rationale for buying bitcoins online is, it's my hope that this guide will help to give you the information you need to make your first successful Bitcoin purchase. 

1. Get a Bitcoin Wallet

Before you can get started buying your first bitcoins, you have to secure a Bitcoin wallet. We have an excellent article that you can read to learn about Bitcoin wallets. Some of the options below come with their own wallet but I strongly recommend that once you have made your purchase you move those bitcoins to your personal wallet.

2. Buy Bitcoin

There are several options available to you when it comes to buying your first bitcoin. Depending on the speed at which you need to purchase, the amount you need to purchase and whether or not you want to be anonymous when buying bitcoin, these different options are available to you.

2a. Use An Exchange

Buying from a Bitcoin exchange online is the most common way people buy bitcoins. Buying bitcoins using credit cards is the primary way people make a purchase although there are options to buy bitcoins using debit cards, cash, wire transfer, etc.

The thing to be careful of when using an exchange are the fees. Most exchanges charge anywhere from 3-10% of your transaction cost in fees. Some reduce the amount of bitcoin you receive to accommodate those fees, some increase the charge to the card to account for the fees. Do your research before making a purchase this way. Listed below are the exchanges I prefer and my ranking of which I think are the best for a new person just getting started. Simply click on their logo to visit their website.

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Coinbase

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Countries Accepted

US & Most Major Countries

US & Most Major Countries

Visa/Mastercard

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Debit Card

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PayPal

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Bank Transfer

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Built In Wallet?

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Phone App?

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Android Only

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2b. Buy Bitcoin Over The Counter (OTC) or through Face To Face transactions

If you live in a metropolitan area or prefer to be anonymous, this is the best option. Buying bitcoin with cash eliminates a lot of the hassles of bank verifications and fees. There are a variety of ways to arrange a face-to-face trade with a local person selling bitcoin. You can also use P2P marketplaces like LocalBitcoins.com make purchases. A lot of these sites charge a premium for the bitcoin over the market price but they often are willing to negotiate the price.

If you decide to take this approach, please use the appropriate safety precautions. You should meet in a very public place where there is lots of foot traffic or bring other people with you for your personal protection. After all, you are potentially making a large value exchange with another person just as if you were using cash. You should also check with your local laws to make sure exchanges like this are legal in your area.

2c. Buy Bitcoin Using a Bitcoin ATM

Although not widely seen in the US as of September, 2017, Bitcoin ATMs are becoming more recognizable in the Eastern countries like China and Japan. As time moves forward, we should be seeing more and more of these devices in more metropolitan areas in the United States and United Kingdom.

Basically, the way a Bitcoin ATM works is that you preload the cash or swipe your credit card in the device. Once that's done, you are prompted to scan your Bitcoin wallet address QR code and the Bitcoin is deposited into your wallet. If you don't have access to your Bitcoin wallet address at the time, you can opt for a paper receipt which will have the codes necessary for you to add the Bitcoin to your wallet at a later time.

Since most ATMs are independently owned and operated (remember, Bitcoin isn't regulated by a bank), they charge between 3-8% premium on top of the exchange rate to make it profitable for the ATM owner. In addition, there are some ATM models that will let you send Bitcoin to someone else as well as withdraw cash from your Bitcoin wallet.

In Summary

Buying Bitcoin does not have to be a complicated endeavor. And you don't need to purchase an entire Bitcoin. Some exchanges above will let you purchase as little as $10 worth of Bitcoin at a time. The key thing is to get started.

However, that being said, standard disclaimer rules apply. Bitcoin is still considered risky and you should never spend more money to buy bitcoin than you are willing to watch disappear forever. While that is unlikely, there is always the possibility that, since the value of Bitcoin is driven by the community, the community could decide one day that Bitcoin is worthless.

I don't believe that will happen, however.  Decentralized currency is the future. No longer is it necessary to involve a third party to exchange value between two people. Verifying bank accounts, social security numbers, drivers licenses, etc. is not required for people to exchange value with Bitcoin. I simply need to know your wallet address and I can provide you with whatever amount of Bitcoin we have agreed to.

The banking industry is not excited about the future of Bitcoin because he who controls the money, controls the power. By taking back control of our money through decentralized cryptocurrencies like Bitcoin, we are taking back the power the banks have held over us for far too long.