After knowing the basics about Bitcoin, you may now be ready to actually buy bitcoin. You may have read our guide on how to invest in bitcoin making you well-aware of the different bitcoin investment approaches, possible risks when investing, and vital indicators.
In this guide, we will go through the various ways you can buy, sell, and store bitcoins. Generally, it is not that hard to buy bitcoin and other altcoins. Just have your Bitcoin wallet ready, your preferred payment method, and the platform or means where you will buy BTC.
Buying and selling bitcoins can often be done on the same platform, depending on the services it offers. While storing your bitcoins is suggested to be done on a personal crypto wallet. Take note that all bitcoins are technically stored and kept secure in the blockchain.
Where to Buy Bitcoin?
There are several ways you can choose from when buying bitcoins. Depending on which one brings more convenience to you, you must always put the security of your assets as the priority. You can opt to buy bitcoins and other cryptocurrencies in the following methods:
One of the most common approaches is buying bitcoins in cryptocurrency exchanges. Depending on your location, there are numerous bitcoin exchanges that are open around-the-clock for users. These exchanges will require you to register to do any transaction.
Typically, as compliance with anti-money laundering (AML) laws, users are asked to submit proof of their identity like a selfie with their passport or signature on a piece of paper. This is most commonly known as the know-your-customer (KYC) process.
All exchanges have their own procedures for account setup and other transactions like buying bitcoin. Most of them accept payment via bank transfer or credit card, with a corresponding transaction fee ranging from 0.01% to 0.25%.
As of May 2020, there are more than 7,700 bitcoin ATMs globally. There has been a significant increase in these standalone machines in different parts of the world as the demand for bitcoin and other cryptocurrencies arises.
These machines work similarly to a fiat ATM where people can deposit and withdraw cash. Through bitcoin ATMs, people can immediately acquire their BTC directly to their personal wallets with less waiting time.
Despite the ease of use of these machines, bitcoin ATMs are recorded to have more expensive transaction fees. Reportedly, in some countries like Belgium, there is also a daily transaction limit of 3,000 euros per person. On the other hand, the withdrawal limit is roughly 5,000 USD.
If you have bad experiences in exchanges like frozen or lost assets, you can alternatively use peer-to-peer (P2P) platforms online that allows you to be involved in local marketplaces. In this way, you can proceed to buy bitcoins without going through the KYC process.
Here you can look for sellers who are willing to trade their BTC in exchange for cash. By looking for a legitimate seller, you can decide whether to meet that person face-to-face or complete the transaction via traditional payment methods.
In case you opt to meet in person, before actually doing it, ensure that the person you are meeting with is not a scammer. Always have a meet up in a public place like a cafe. Moreover, do not give the money unless you are sure that the BTC has been transferred to your account.
Limitations When Buying Bitcoins
The potential of cryptocurrencies, specifically Bitcoin, has exponentially grown as more merchants accept it as a payment method and users are now more open to using it as a form of digital cash. Despite this, it may still take time before a mainstream adoption is set to happen.
Bitcoin Regulations by Country (2020)
Cryptocurrency is referred to as digital currency, virtual commodity, crypto-token, payment token, cyber currency, electronic currency, and virtual asset. Governments have been hesitant when it comes to regulating these assets due to the pitfalls related to crypto market investment.
Countries like Algeria, Bolivia, and Morrocco still ban any activities involving cryptocurrencies. While Qatar and Bahrain do not allow their citizens to engage in any crypto-related activities locally yet allow them to do so outside of their borders.
More so, Bangladesh, Iran, and Thailand, among others impose restrictions by barring financial institutions within their borders to facilitate any crypto-related transactions. In the Swiss Cantons of Zug, a municipality within Ticino, and Mexico, cryptocurrencies are permitted to be used.
Citizens from any nationalities are highly advised to invest in cryptocurrencies at their own personal risk as there is no definite legal recourse currently available in the event of any loss they experience. This may change once crypto becomes regulated as years go by.
The value of BTC and cryptocurrencies, in general, are volatile in nature. Due to this, buying and investing in BTC must be done with precaution to avoid any huge losses. Most importantly, keeping your bitcoin wallet’s private key safe and secure should be the top priority.
As cryptocurrency is not a stable investment, allocating funds when buying BTC should be done with discretion. Do not risk any amount of money you will regret later on. If you prefer to hodl, short-term threats are not likely for you but active traders should be more careful with these.
Since BTC is virtually available and stored through the blockchain, any cases of lost assets associated with your private key mean that you cannot take hold of your BTC anymore. This is the reason why we have been highlighting the importance of keeping it secure at all times.
How to Buy Bitcoin?
The easiest way to purchase bitcoins is online. As you make sure that you have a secure and stable internet connection, you can proceed to buy your digital assets. It is not time-consuming as it takes only several steps to do it successfully.
Moreover, if you are not interested in buying bitcoins, you can acquire these through crypto mining. But it requires a whole lot of computing power and thousands of competition from other miners worldwide. If you have the hardware and capability to mine bitcoins, you can try it out.
Via Crypto Exchanges
- Have a personal bitcoin wallet account.
- Depending on your location, find the most reliable exchange to purchase BTC.
- Complete the registration in the exchange.
- Make a deposit on your preferred payment method.
- Purchase BTC according to the exchange’s current market rate.
- Finalize the transaction and transfer it safely in your personal bitcoin wallet.
If you prefer to buy locally using cash, you can definitely do so. In fact, if you ensure that you will do a transaction in a legit Bitcoin ATM (BATM) or meet a genuine seller, buying bitcoins in this manner will be less worrisome for you.
Via Bitcoin ATMs
- Find the nearest Bitcoin ATM at your place.
- Tap on the screen that you want to buy BTC.
- Enter the amount of BTC you will purchase.
- Choose the type of fiat currency you will use for buying BTC.
- Enter the mobile number for verification.
- Hold the QR code of your Bitcoin wallet address to the BATM scanner.
- After confirming the receiving address is correct, insert the cash.
- Print out the receipt after the transaction.
Via P2P Platforms
- Register on the P2P platform.
- Search for any bitcoin seller available near your area that accepts your preferred exchange method.
- Check the credibility of the seller on the platform.
- If you are convinced that the seller is trustworthy, reach out to the person and clearly communicate for the deal.
- Make sure to settle on mutual agreement and follow the necessary procedures properly.
How to Sell Bitcoin?
In crypto exchanges, you can just simply place a ‘sell offer,’ where you have to state the amount of BTC you will sell and your asking price per unit. The exchange will then automatically complete the transaction once a buyer accepts your offer.
Otherwise, you can directly trade with a buyer through P2P online trading platforms. You can register through these types of platforms that allow direct trading and create your profile. Once you have matched an interested buyer, you can proceed to negotiate with them.
One way of selling bitcoins is by swapping them to other altcoins. If you decide to do so, you can proceed to do a ‘swap order’ where you can set the two currencies you want to exchange (BTC and the supported altcoin pair) and the min or max amount you will swap.
How to Store Bitcoin?
Your bitcoins can be stored through a crypto wallet. How to choose a bitcoin wallet will be discussed in detail later on but once you have your crypto wallet ready, you must now set up your account. Either you prefer a hot (online) or cold (offline) wallet, you have to do this step.
When creating your account, do not skip the additional security layers like two-factor authentication (2FA), mnemonic phrase, and biometrics. These are made available to implement protection to your wallet and your assets.
Once you have your bitcoin wallet, you can store your bitcoins securely. Do not allow others to have access to this wallet to ensure its maximum safety. In case of emergency, make sure to keep a backup of your password and private key to avoid any permanent asset loss.