How To Buy Bitcoin

How to Buy Bitcoin |everything about wallets and exchanges

Buy Bitcoin

Bitcoin is a popular cryptocurrency in the world. There are several ways to buy and store Bitcoin, which makes it somehow confusing. In the following article, we try to break this process into some clear steps. If you want to invest in Bitcoin and don’t have any ideas where to start, this article will help you to find the best available options to buy Bitcoin.

How to buy bitcoin

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Before you buy Bitcoin

To start trading or investing in Bitcoin, you need several things. Buying Bitcoin could be done via cryptocurrency exchanges, thus you need to create an account in an exchange.

Reliable and legal crypto exchanges require personal identification documents, which is called Know Your Customer (KYC). Besides these documents, you need a secure and personal connection to the internet.

With these things, you can begin trading Bitcoin, for which you also need a valid payment method. You also need to have a cryptocurrency wallet to store your Bitcoin.

Sounds a little bit confusing? Don’t worry, we will break these requirements into a few clear steps.

Cryptocurrency Wallets

A cryptocurrency wallet is a tool by which you can interact with the network of your cryptocurrency and manage your crypto. These wallets store your private keys, which are the most confidential information that should be kept safe.

Several types of cryptocurrency wallets are available, from free web wallets that offer a lot of options to users to various types of hardware wallets that quarantine private keys in an isolated place detached from the internet.

Each type of these wallets has its own use that is suitable for some buyers. Some of them also offer built-in exchanges, by which you can directly buy Bitcoin or other cryptocurrencies.

In a general classification, cryptocurrency wallets could be divided into hot wallets and cold wallets. Hot wallets are discerned by their connection to the internet.

These wallets are very useful and easy to use, but because they are connected to the internet they might be at risk of various types of attacks and hacks. On the contrary, cold wallets are designed to be safe and protect your keys from internet attacks, as they isolate private keys in a particular storage place that is totally offline.

Related article: How To Sell Bitcoin | Various Methods To Cash Out Crypto

How to buy bitcoin

Hot Wallets

When you buy bitcoin you need a tool to interact with its network. Hot wallets are useful tools that make it possible for you to check your balance, receive and send funds, and manage your private and public keys. Hot wallets are simply online crypto-wallets.

Several types of hot wallets are available. They are generally regarded as the easiest solutions to manage cryptocurrencies. However, they are also regarded as a little bit unsafe compared to cold wallets. It should be noted that different types of hot wallets offer various levels of security.

How wallets are also called software wallets, as software wallets are somehow connected to the internet. They could be classified into three main categories:

–         Web wallets

–         Desktop wallets

–         Mobile wallets

related article: Bitcoin Mining | The Rules Of Profitability In Cryptocurrencies

Web wallets

Web wallets are easy-to-use wallets that could be used without downloading or installing any software. You can simply access them through your web browser.

When you buy Bitcoin from an exchange, they typically transfer coins to an exchange wallet. These wallets are also web wallets because you can access them right from your web browser.

Web wallets usually are free and you don’t need to offer documents to register a web wallet. You can simply create a new wallet and set a personal password to access your account.

As we mentioned earlier, the most confidential information that should be kept safe is your private and public key. Some web wallets store private keys on the behalf of the client, while others store this information on their servers.

Thus you should check the technical features of a web wallet before using it, to make sure that your private key would be in a safe place under your control.

Desktop wallets

Desktop wallets are software that you should download and install on your computer. These wallets are regarded as safer than web wallets because when you use them you have full control of your private key.

When you buy Bitcoin and install these wallets, a file containing the private key information would be stored on your device. You should encrypt this file with a personal password to make sure no one can access it.

Desktop wallets

Desktop wallets are easy-to-use and you can use them just like any other software on your computer. For security reasons, it is recommended to encrypt them with a strong password.

You should also make sure that your computer is clean and no virus or malware is on it, as your most confidential information would be stored on your local storage. You can also use portable storage to export your information, which could be used for access to funds if your computer stops working.

related article: Store Bitcoin | How To Deposit And Trade Bitcoin

Mobile wallets

Mobile wallets are just like desktop wallets, with the difference that they would be installed on your smartphone. These wallets are very convenient as you can carry them and use them on the go.

They also offer features like generating a QR code for your public key, which should be used to receive funds. So when you buy Bitcoin mobile wallets are a convenient way to manage your funds.

Mobile wallets are great options for everyday use and have many use cases in daily transactions and payments. These wallets are very easy-to-use and also offer many useful features.

However, just like desktop wallets, they are vulnerable to online attacks through malware and virus infection. So when you use these wallets, you should make sure that your device is clean from suspicious apps. It is also recommended to use more advanced security options when you are using these wallets.

Cold Wallets

Cold wallets are simply wallets that don’t let your private key in online storage. There are two main types of cold wallets:

–         Paper wallets

–         Hardware wallets

Paper wallets

You can simply print your public and private keys on a piece of paper to make a paper wallet. Several websites also offer services that could be used to make a paper wallet with QR code that could be used by mobile.

Because these printed or written down wallets don’t have any internet access, they are regarded as a cold wallet.

It should be noted that though these wallets are isolated from the internet, they are at risk of other incidents and dangers, such as being lust, are simply being in a wet place, or being torn. These wallets also don’t offer any feature and could not be used to interact with the blockchain network.

Hardware wallets

Hardware wallets specially designed hardware devices that you can use them for interacting with blockchain networks in the safest possible ways. These wallets store the private key in an isolated hardware place, they do not use the internet. Technically, when you use these wallets, your private key never gets out of your device.

Hardware wallets

Hardware wallets designed to be the safest option for managing cryptocurrencies. However, unlike many software and hot wallets, these wallets don’t come free. So when you buy Bitcoin in large amount, or simply want to hold your Bitcoin for a long time, they would be a perfect choice.

Hardware wallets are somehow slow comparing to hot wallets, thus it is better not to use for daily traders and those who need to transact cryptocurrencies in a daily manner. However, several types of hardware wallets are available, some of which also offer hot wallets that could be used very easily.

How to buy Bitcoin

As we mentioned earlier, you can buy bitcoin in several ways. Some of these ways are easier as you can simply use your credit or debit card to receive bitcoin just like a ticket kiosk. In the following, we will introduce these ways in detail.

Nominex

How to Buy Bitcoin and other crypto in Nominex wesite:

  1. Go to the Nominex website on a browser.
  1. Click on Get Started.
  1. Enter your Email and password to Sign-up and press Create Account.
  1. Confirm the email address. After your registration, Click on Buy-crypto on the top-left menu.
  1. Fill in the boxes below with the desired values and buy with koinal or Mercuryo.
  1. View the pre-purchase information and if you confirm them, select the option to approve the site rules and click on Go to payment.( You can use two banking gateways Koinal and Mercuryo, both of which have the ability to support credit cards.)
  1. In this step, you must enter your card information and personal information, and finally click on Complete Purchase.

  1. Congratulations! you have successfully purchased your digital currency.

Buy Bitcoin By ATM

Bitcoin ATM (or BATM) is a kiosk that lets people buy Bitcoin using an automatic teller machine. Bitcoin ATM is not exactly an ATM, but it works similarly. Some of these machines provide bi-directional functionality, meaning you can buy Bitcoin via them as well as selling it.

These ATM kiosks allow the user to insert cash or credit card in exchange for Bitcoin. Unlike traditional ATMs, they are not bank-based and users can not use them for their traditional banking operations. BATMs simply connected to a Bitcoin exchange and provide a localized way to purchase Bitcoin.

Buy Bitcoin By ATM

Bitcoin ATM kiosks could be used without any need to register an account on an exchange. Because of this, you can see them as the easiest way to buy Bitcoin. However, these kiosks should gather information about the clients, thus using them for anonymous purchase is impossible.

You can find the nearest BATM by searching Bitcoin ATM. In recent years with the growth of popularity of Bitcoin, several companies provide Bitcoin ATMs. you can find them everywhere in public places: retail stores, shops, malls, restaurants, hotels, and airports. These kiosks might charge a commission when you try to exchange money for Bitcoin.

how to buy bitcoin

Buy Bitcoin By Cryptocurrency Exchange

Cryptocurrency exchanges are websites that you can use to buy Bitcoin and other cryptocurrencies such as Litecoin and Ethereum. They are just like trading platforms for stocks and forex, but you can buy cryptocurrencies from them. Several types of cryptocurrency exchanges are available:

–         Centralized

–         Decentralized

–         Broker

–         Instant

–         Hybrid

Centralized

Centralized crypto exchanges are the most popular and common type of crypto exchanges and the biggest exchanges in the world belong to this type. These exchanges are very easy-to-use and also offer many services and features, which make them a great choice for many users.

Because of this, they have a large volume of trades daily, which means their liquidity is high enough. This is especially important when you want to buy Bitcoin fastly or sell your bitcoin in few minutes.

The most popular crypto exchanges in the world are centralized. Binance, Bittrex, and Kraken are some great examples of this type of exchange. Though these exchanges are very convenient and easy-to-use, because they are centralized and store users’ data on their servers, they are vulnerable to online attacks.

When you use this type of crypto exchanges, they recommended to transfer your Bitcoin from their wallets to a reliable wallet that you can trust. These exchanges are extremely useful to buy Bitcoin fastly, but you should put the safety and security of your funds first.

Because cryptocurrencies have decentralized solutions, many experts criticize these exchanges for making this market centralized. This critique is somehow valid, but as you might know, the market goes on its own way. However, to avoid this problem, decentralized exchanges made that one could use without needing any centralized server.

How To Buy Bitcoin

Decentralized

Decentralized exchanges (DEX), as you can guess from their name, are the opposite of centralized exchanges. These systems use a set of smart contracts that allow the trustless exchange of tokens. In these exchanges, users have full control over their funds. The exchange serves only as a connector between buyer and seller.

Unlike centralized exchanges, the volume of trades on these exchanges is low and fewer users use them to buy Bitcoin or altcoins. That means you can make an order on a decentralized exchange that never would be executed.

As we mentioned earlier, decentralized exchanges made by a set of rules and smart contracts, so they should be made on blockchains and platforms that support smart contracts.

Most popular decentralized exchanges made through Ethereum, as it’s the first platform that offers smart contracts. Etherdelta and IDEX are two popular exchanges of this kind that work on the Ethereum platform.

Broker

Broker exchanges are just like centralized exchanges, but these exchanges directly sell cryptocurrencies to users. This type of exchange is extremely rare, as the only example that could be named here is Coinbase.

These exchanges are also important because of being compliant with all regulations. Coinbase is the only legal crypto broker that is popular in the USA.

Because of being regulated, this type of exchange could be considered the safest option to buy Bitcoin. That’s because these brokers are legally responsible for your funds.

They also try their best to make sure that your funds are secure. Besides these pros, their user-interface is very user-friendly that could be used without any special knowledge.

However, the same critics about centralized exchanges are applied to the broker exchanges. They also send all financial documents and balances right to tax inspectors, so when you use these exchanges you should pay taxes for all your profits.

Another con of these exchanges is that they are not available in many countries, including France, Japan, and Russia. They also offer a limited number of cryptocurrencies, so you can not use them to buy unknown tokens are cryptocurrencies.

centralized exchange

Instant

Instant exchanges are a great choice when you want to trade a cryptocurrency for another cryptocurrency. Some of the most popular instant exchanges include Changelly, Godex, and Shapeshift. When you trade on these exchanges, you don’t need to wait for another trader to meed your order.

You can exchange your Bitcoin on these exchanges instantly, as it is obvious from their name. However, when you use these exchanges you should pay a commission notably higher than other exchanges, which makes them an expensive option.

The price and commission of these exchanges make them the most expensive way to buy Bitcoin, but because it is very fast, in many cases they would be preferred to other methods.

Hybrid

Hybrid exchanges offer the security of decentralized exchanges with the usability of centralized exchanges. Several types of hybrid exchanges are available which are focused on some aspects of exchanges. Some of the most popular hybrid exchanges include EXMO, Bitstamp, and CEX.

This type of exchange is more popular than decentralized exchanges and less popular than centralized ones. They provide a high degree of security comparing centralized exchanges, and in more than 5 years, there is no reliable record about their being hacked.

Buy Bitcoin By P2P

P2P exchanges or trading platforms work like centralized exchanges, but they don’t require any legal or identity document. So, if you think your crypto tradings are your private business, you might find these exchanges useful.

The main difference between these exchanges with centralized ones is that they connect two users directly to each other. In other words, instead of using an order book to match requests and offers, these exchanges connect users.

You can use these exchanges to buy Bitcoin from a user. So, when you use these exchanges you can negotiate with the seller to get even a discount. The only problem is that you don’t know the other party, which means if any problem occurs, you can not track your rights, not as simple as other types of exchanges.

Last Words

Buying Bitcoin is not a straight-forward job, you should first consider security and usability, which means you should have an idea about crypto wallets. Several types of wallets are available, and you should choose from them with considering your personal needs.

After that, you need to use a crypto exchange to buy Bitcoin. As you saw in this article, there are several types of crypto exchanges with various degrees of usability and security.

While it might seem very confusing, when you start to research about these topics, or simply try to buy and make deals, you might find it very easy. You should simply know about your own requirements to find the most suitable options.

Some options are more user friendly, but they might be risky, and some options might be more secure, but they might be hard to use. You should consider these features, and choose the best way that works for you.

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