Bitcoin is a form of cryptocurrency or digital currency used for online trading, similar to any commodity on the web. The digital currency system is decentralized and uses peer- to- peer, cryptographical technology to make secure transactions between 2 individuals or 2 entities over the internet. to provide financial security to its dealers, all electronic transactions are recorded in the blockchain- which is the digital counterpart of an accounts ledger in this system.
Bitcoins (or BTC) are currency units of the Bitcoin system created in 2009 and are the first of its kind. Similar cryptocurrencies have emerged since then, namely Ripple and Ethereum. We have listed the necessary steps to buy bitcoin.
So How Do I Buy Bitcoins?
Bitcoins can be brought on online marketplaces similar to any other product or service. You can also utilize a digital currency exchange or broker for this purpose. It is advisable to use one of the exchanges if the dealer is a beginner in the field of cryptocurrency. Some popular brokers are Bitstamp, Coinbase (one of the biggest in the US), Gatehub, and Kraken.
You will be needing a wallet to store the digital currency, irrespective of the exchange you use. This wallet will contain your private key and a secret numerical code (a 256- bit string) which will allow you to access the Bitcoins. The private key enables you to move across the online marketing platforms. It is not necessary that you must stick to a particular exchange; the private key will help you to access your wallet, no matter which marketplace you use.
There are 2 different kinds of wallets, namely software and hardware.
The software wallets are basically application softwares (does the word ‘app’ sound familiar?) that can be linked to your bank account. Some of these are quite popular like Coinbase (can be tied directly to the exchange service), Electrum, and Mycelium (extremely renowned mobile wallet).
Hardware wallets rely on a hardware device which resembles a flash drive, in which the user’s private key is stored. Many people prefer the hardware wallet compared to its software counterpart because it does not remain connected to internet and hence there are reduced chances of hacking/online theft (which are rare but have occurred before in the past).
If you are done with selecting a wallet and a preferred marketplace, it is time to get down on the brass tacks and get going. Now that all preparations are complete and all requisites have been fulfilled, we move forward to the real deal.
Step 1: Creating the Wallet
The easiest and most hassle- free way to do this is to use the services of a third- party company like Blockchain.info, Coinbase, Exodus, or Mycelium. It is a simple sign- up process akin to any ordinary online registration procedure. Go to any one of the aforementioned websites and sign up using personal details like name, e-mail id, and password.
Step 2: Download Wallet
Download the application software (app) of the wallet service. You can download using either the Apple app store (for iOS) or the Google Play Store (Android OS). Some of the softwares are better compatible with desktop computers while the rest are better for being used with mobile devices.
Step 3: Take To the Exchange
It’s time to visit the exchange of your choice. Pick one and register with the exchange. If you need any suggestions for it, some of the famous names include BitStamp, BitPanda, Bitfinex, CEX.io, Coinbase, Kraken, or Poloniex.most exchanges will ask you to connect to your bank account for making a Bitcoin purchase.
Exchanges like Coinbase offers dual services with their app, which doubles as a wallet. Using this app, Bitcoins can be bought, sold, or stored as one sees fit. Although Coinbase is a giant of a company, you are free to use any digital wallet (and exchange) ¬ just the Coinbase digital wallet (or exchange service).
Step 4: Buying the Stuff
It is finally the time to buy the BTC. Go to the ‘BUY’ section in the exchange and select the number of Bitcoins that you wish to purchase. Bitcoins can be divided up to 8 decimal points. In other words, you can buy 0.5 BTC, 0.02BTC, 0.045 BTC ranging upto 0.00000001 BTC- all in accordance with your budget. Bitcoins can be bought during the exchange with cash, credit card, or a bank transfer.