Bitcoin is in the news today more than ever before. Thanks to growing prices and occasional roller coaster dips, everyone is interested in learning the right way to buy and sell bitcoin.
Considered the most popular type of cryptocurrency, along with the blockchain technology that powers it, bitcoin is now accepted around the world and has several applications. There are numerous options to choose from, including xCoins and more, with each one offering unique pros and cons. While this is true, before trading anything, it is necessary to learn more about how trading, buying and selling bitcoins works to ensure that the right steps are taken, and good deals are made.
Find a Reputable Bitcoin Wallet
A digital wallet is designed to store bitcoin until someone is ready to spend it or exchange it for another type of currency. Wallets are available with many features. There are also different platforms that accept each one, and various levels of security. It is important for each person to find the option that best suits their needs. While this is true, the option evangelized by John McAfee is best left out of the equation.
For anyone just getting started with bitcoin, a good option is a wallet that is provided automatically or that is recommended by the exchange being used. However, it can also be smart to set up a wallet that is not linked to any crypto-exchange to help ensure the user has access to their bitcoin even if there is a lot of traffic or the site closes down.
Important Note to Remember
While online wallets are great for a person’s first bitcoin purchase, if someone finds they have several valuable cryptocurrencies due to trading or because of an increase in value, be sure to keep it in an offline wallet, which is also called cold storage, to ensure maximum protection.
The best place for a person to make their initial bitcoin purchase is through an exchange. There are several exchanges available, all with varying levels of performance. Some are not as trustworthy as the others, and there are some that provide limited services. This means it is essential that a person chooses the right exchange, to begin with.
Choose the Right Payment Method
Modern exchanges provide several payment options for users. However, it is a good idea to be cautious as there are many scam sites out there. With sites like Coinbase, it is possible for users to use both debit and credit cards along with their bank account to make payments. Just note, it is necessary to have some payment option linked to the account before making a trade. Coinbase has also recently added PayPal as an option to transfer bitcoin, but there are some caveats.
It is also possible to use bitcoin ATMs. With these, it is possible to exchange bitcoin in wallets that are compatible with cash. These types of ATMs are not widespread and can only be found in a few cities. However, they do offer an alternative to withdrawing money using an exchange. Also, most online wallets and exchanges will never deal directly with cash payments.
Purchase Bitcoin and Store it in the Chosen Wallet
The exchanges that are used can provide information regarding how much or how many of bitcoin can be purchased for specific amounts of money. However, since the bitcoin market is so volatile, the prices can vary significantly from one moment to the next and one exchange to another. What this means is even in situations where someone has a lot of disposable cash to use for this precise, they will only be purchasing part of a bitcoin. This is completely normal, and for most, this is what they will do. However, few but the wealthy can afford to purchase one or more bitcoins at a time.
To make the first trade, put the amount of the bitcoin that a person wants to buy in the labeled field and then click the “buy” button. If the individual is using Coinbase, this will be considered a standard market buy order. This means that bitcoin is purchased at the best market rate. Another option is to put in a limit order. This allows a person to set the price they are willing to pay for a specific amount, and the trade will only happen if the amount pops up at the selected price.
Once the purchase is complete, the bitcoin will transfer to the selected wallet for storage purposes. At this point, it is a good idea to seek out the option to transfer the funds to the address of the bitcoin wallet that has been created. At this point, it is necessary to pay a small fee to transfer the funds to the address of the bitcoin wallet. The good news is that the cost of these transfers is much lower than they have been historically.
It is important to note that bitcoin transfers may be on the sporadic side. When purchasing bitcoin funds, the transaction should be recorded and affirmed through the blockchain, unlike other types of currency trades. This is especially during the busier trading hours of the day. It is smart to plan transfers accordingly before diving in.
Be Ready to Use the Bitcoin
Regardless of if a person plans to sell their bitcoin, hopefully for a profit, or use it to buy something, it is important to be ready to do this at a moment’s notice. The value of bitcoin varies significantly, so it is important to plan the endgame as early as possible. By preparing now, a person will be ready to use the bitcoin when the need arises.
While bitcoin can be confusing at first, once someone learns the proper way to buy it, the process of doing so is easier than they may have imagined. Being informed and knowing what to expect are the best ways to ensure that the desired results are achieved, regardless of what they are.