Bitcoin (BTC) remains the most expensive cryptocurrency. It has maintained the top spot despite the large number of altcoins available. Following the Covid-19 pandemic, we witnessed crypto prices take an extended nosedive. However, many speculators and market experts expect the price to retrace massively in the near future. So, if they are right, it is a great idea to purchase bitcoin now and sell it at a higher price later. Let’s find out how to buy BTC the right way.
Where to Buy Bitcoin
Bitcoin and other cryptocurrencies, unlike fiat money, cannot be purchased from banks. There are various ways to buy bitcoin. Let’s take a close look at the options.
1. Cryptocurrency Exchanges
Crypto exchanges are common among crypto beginners due to their relative ease of use. Exchanges also allow you to store your crypto and follow current market prices. They exchange your fiat money for virtual currencies and vice versa. Many exchanges have registration processes similar to those of traditional banks. They charge processing fees, which vary across platforms. Therefore, it is important to find a good cryptocurrency exchange to enjoy fair rates and transaction costs.
2. Peer-to-Peer (P2P) Exchanges
These exchanges allow buyers to purchase from individual sellers. After creating a P2P account, users can request to buy or sell bitcoin and agree on prices and payment methods. P2P exchanges offer users the flexibility of finding good deals and evaluating individual sellers before purchasing, usually through the platform’s rating system. It’s worth noting that P2P exchanges charge a fee for every transaction.
3. Bitcoin ATMs
Bitcoin ATMs allow users to deposit cash and get bitcoin transferred to their online wallets. They have become increasingly popular due to their convenience. However, this convenience comes at a price. One fee is charged for converting fiat currency to cryptocurrency, and the other is a transaction fee. Depending on the provider, the total fees add up to an average of about 8.4% of the total cost of the purchase.
4. Credit or Debit Cards
Credit and debit cards are accepted at some exchanges. They accept fiat money and deposit bitcoin into the buyer’s wallet. These are subject to additional processing costs, which may be prohibitively expensive on some platforms.
PayPal is well-known as one of the few traditional financial platforms that has adopted bitcoin. This is hardly surprising given that PayPal and bitcoin had similar visions. You can buy bitcoin using your PayPal balance or by linking your bank account to your PayPal account. One interesting PayPal feature is the option to buy things directly using cryptocurrencies.
It is important to note that PayPal does not allow you to transfer bitcoin to an external wallet. Also, it is not as widely accepted as other platforms.
There are two main ways to keep your cryptocurrency secure. These provide varying levels of security. As a result, it is critical to select your storage solution carefully.
These are online wallets on devices like computers or phones. Hot wallets generate private keys that can be used to access them from multiple devices. The keys to the wallets are held by the wallet exchange, hence the phrase, “not your key, not your coin.”
If the exchange gets hacked and there’s not enough protection, you’ll likely lose your coins. This is why strong passwords, two-factor authentication, and other security protections are necessary. Hot wallets are best for small amounts of cryptocurrency or cryptocurrency that is being traded actively.
These wallets are offline and are at less risk of being compromised. These wallets store their keys on paper, USB drives, and even computers, which are stored in a safe deposit box or private safe. Cold wallets are good for storing large amounts of cryptocurrency for extended periods of time. If a cold wallet is lost, all accompanying cryptocurrency is lost with it. This is a major shortcoming of cold wallets, and many bitcoins have been lost this way.
Buying cryptocurrency should be simple if you use the approach that is appropriate for you. If you can’t decide, crypto exchanges are the greatest place to buy bitcoin for beginners.