How to Buy Bitcoin: Everything You Should Know

How to Buy Bitcoin: Everything You Should Know

Investing in or buying Bitcoin is not half as complicated as it initially sounds. Once you break down the steps clearly, you can see that it is simple and easy to follow, and anyone can do it.

To trade with or invest in Bitcoin, you’ll just need an account with an exchange platform, and preferably a secondary storage solution. However, we’ll get into all the details shortly as this article will look at everything you need to know about buying this cryptocurrency.

Before You Buy Bitcoin

Before you get started with Bitcoin, there are a few things you should keep in mind.

  • As soon as you have access to a private key to a public address, you can then authorize transactions on the blockchain.
  • As you should already be aware, your private key must be kept completely secret and safe at all times. You can lose your Bitcoin if your wallet is compromised.
  • Bitcoin transactions are not entirely anonymous. Whenever you carry out a transaction, the other party will be able to see any information attached to your wallet address. For this reason, you should change your wallet address after each transaction.

These are just a few important points to note before buying Bitcoin. There are others to keep in mind such as your country’s regulations and tax laws, as well as how to store your crypto.

However, you can find our informative guide here called 8 Essential Things to Know Before Getting Started with Bitcoin so you can go in already with the knowledge you need.

Steps to Buying Bitcoin

You’ll find easy steps below on how to buy Bitcoin. Although, you should couple this with further research so you can feel completely confident in what you’re doing.

Step One

Choose a Crypto Trading Exchange or Service

If you make an account with an exchange or other service, you’ll be able to buy, sell, and hold your Bitcoin. These services are safe and are one of the most common ways to buy Bitcoin as well as being the most convenient.

You’ll find that these platforms are also set up with various features to help you navigate transactions as well as helping you buy and sell.

However, it’s unlikely you’ll ever be able to remain anonymous if you want to set up an account as the majority of platforms require ID documents and other personal information to get started.

A few services such as LocalCryptos, ShapeShift, BitQuick, don’t require ID, and you can remain anonymous but they do have a limit as to how much Bitcoin you can have. Usually, it’s up to 2BTC. Some popular exchanges you can use to trade any amount you want but without anonymity include:

  • Coinbase
  • Kraken
  • US
  • US

Many of these exchange platforms also accommodate altcoins as well as Bitcoin and have, therefore, grown rapidly in popularity over the years.

However, since different platforms allow different tokens or altcoins, you’ll have to check which exchange includes which cryptos before you sign up if you're planning on expanding beyond Bitcoin.

Finally, when using these platforms, while they have their own security measures in place, you should also practice good online security as well. Use a strong, unique, private password. Enable two-factor authentication on your account, and never disclose your account information, even to those you would normally trust.

Step Two

Connect Your Bank Account

Once you have chosen the right platform for you, you’ll need to verify your ID if required. Once this has all been confirmed, you’ll now need to connect your banking account to your exchange service. This is the account where money will be taken when you buy and where money will be deposited if you ever use the platform to sell your BTC too.

Step Three

Make Your Purchase

It really is as easy as that. Your exchange service or platform will give you a clear guide on how to purchase through their site. You’ll be able to select how much BTC you want to buy.

Some platforms even let you make regular payments that happen automatically such as on a weekly or monthly basis. Although this is completely optional. You have total control over how much you buy and sell.

Buying Bitcoin with Paypal

Since October 2020, people have been able to buy BTC using Paypal after this platform teamed up with Paxos. You can also buy a few other altcoins including Ethereum and Litecoin using Paypal, but so far their list is very limited.

For a Bitcoin wallet and to buy with Paypal, you’ll need to provide your name, physical address, date of birth, and tax identification number. You also must use your debit account as you cannot pay with a credit card.

While Paypal has added another way for investors to buy BTC, there is one major disadvantage with this option. You cannot transfer any BTC from your Paypal wallet to an external wallet.

You can only transfer to another Paypal wallet or back to your bank account. This adds a limitation that other wallets don’t impose.

Buying Bitcoin with a Credit Card

As a general rule, most crypto exchanges will not accept credit cards as a payment method. This is to prevent credit card fraud or to stop investors from buying crypto then claiming cashback. Allowing credit cards can be a messy process so you’ll rarely find anywhere that accepts themes. However, if you do find a platform that does accept them, this is not necessarily a red flag as some companies are willing to
Bitcoin Wallets

You’ll be able to store your BTC on whatever exchange platform you’re using. However, it’s never advisable to keep all your crypto in one place. This is why investors tend to spread their BTC out over several different wallets. Just like how you wouldn’t keep all your money in one bank account. It’s far safer and wiser to use several accounts.

You can use hot wallets, paper wallets, or cold wallets which are generally best if you’re not planning on offloading your BTC any time soon.

You can check out our guide here on The Safest Ways to Store Bitcoin so you aren’t at risk of being compromised or losing any of your investment.

Alternative Ways to Buy Bitcoin

Bitcoin ATMs

Bitcoin ATMs are becoming increasingly popular. And they’re no longer just there for investors to take money out, many of them can now be used to buy Bitcoin as well.

These ATMs are like a Bitcoin exchange just in-person. You can put cash into the machine and transfer the BTC equivalent amount to your chosen wallet address.

However, these ATMs come at a price. While they are incredibly convenient to both buying, selling, and withdrawing cash, they come at higher than usual fees. You can pay anywhere up to 5-8% of the total price in fees, which is an option many people only take if it’s an emergency.

You can check here on Bitcoin Radar for your closest Bitcoin ATM. Be sure to double-check that any ATMs near allow purchases in cash as some only allow you to withdraw cash.

P2P Exchanges

A Peer-to-Peer exchange platform cuts out the middleman and provides a direct link between the buyer and seller. When you have an account on a P2P Exchange, you can list your request to buy or sell Bitcoin and wait for a buyer/seller to come your way. In the same vein, you can browse other users’ requests and make purchases or sales.

You have to provide more personal information to join a P2P platform, however, it is the best way to get great deals and lower than market value crypto.

How to Sell Bitcoin

After you bought your BTC, there may come a time when you’re ready to sell. Or at least sell off a little part of our investment if the time is right for you. The processes for selling Bitcoin are, in general, just as easy as the processes for buying Bitcoin.

There are four main ways that you can cash out your Bitcoin, and all come with their own set of pros and cons so choose carefully.

Buying Bitcoin FAQs

Is My Bitcoin Purchase Protected by SIPC?

No, due to Bitcoin being unregulated, you won’t have any investor protection with your purchases. However, some platforms such as Coinbase will protect your assets up to $250,000.

Is Buying Bitcoin Ilegal?

The answer to this question all depends on where in the world you are. While Bitcoin as a currency has become more popular in recent years with El Salvador now even accepting it as legal tender, not every country is so happy about the situation. Here is a list of countries where Bitcoin Is currently either illegal or has serious restrictions.

You should always fully research your country’s laws before buying or trading in Bitcoin as the consequences of doing so illegally are not worth it.

What Is the Best Way to Obtain Bitcoin In the First Place?

Sometimes, unless you are cash-rich, buying Bitcoin is not the best option. Bitcoin can be expensive and most people don’t have enough cash flow to make initial purchases.

Instead, joining a mining pool is the most viable option for those who have fewer resources or not the correct mining rigs. Mining pools are there to let anyone become a BTC investor and are a “cheap” and safe solution.

Important Points to Takeaway

  • Bitcoin has a finite amount and will run out one day - this is estimated to happen around 2140
  • While Bitcoin can’t be hacked - or hasn’t been hacked yet and is highly unlikely to ever be, your wallet can be compromised as well as your exchange account so your security with these details is vital
  • You should always have proper storage for your BTC and keep your details private from everyone
  • You can use services such as Robinhood or Paypal to pay for and buy Bitcoin
  • You can use your crypto and buy goods and services like you would using fiat currency in any place that accepts it as tender
  • You can also gain Bitcoin by investing in companies that use the currency as their payout method
  • As well as buying bitcoin, you can mine the currency yourself or join a mining pool to reap the rewards at a much lower cost

Be Part of the Future with Mining Syndicate

If you would like any more information about starting or expanding your Bitcoin horizon; reach out to us at Mining Syndicate. Our mission is simple: Strengthen the Bitcoin network by enabling small-scale miners to affordably purchase and reliably host miners.

As a small miner, Chris became frustrated by the lack of hosting options available for miners with under 100 units. As luck would have it, he found a 2.5MW mining facility for sale right down the road, and thus, Mining Syndicate was born. Facilities #2 and #3 are already in the works.

Why is Mining Syndicate so successful? Because we have a team of people who are just like you, eager to be a part of the future of mining.

If you would like more information about how you can be a part of Mining Syndicate, how our facility works, or the products we sell, you can reach out to us here.

We look forward to hearing from you - together we are stronger!