Last updated on October 31st, 2017 at 09:52 am
Table of Contents
- How to Buy Bitcoin – Trading Bitcoin for Beginners
- What is Bitcoin
- Here are some other ways of buying bitcoins:
- Why You Should Trade Bitcoins
- Bitstamp – (How to Buy Bitcoin – Trading Bitcoin for Beginners)
- CoinBase – (How to Buy Bitcoin – Trading Bitcoin for Beginners)
- BitFinex – (How to Buy Bitcoin – Trading Bitcoin for Beginners)
- The Bitcoin Direct Trade – (How to Buy Bitcoin – Trading Bitcoin for Beginners)
- The Bitcoin Exchange Trade – (How to Buy Bitcoin – Trading Bitcoin for Beginners)
How to Buy Bitcoin – Trading Bitcoin for Beginners
Like wildfire, the popular acceptance of Bitcoin in the world has spread, cutting across almost every powerful country, even in Africa. The fact that it is easy to purchase, secure and exchange for fiat money in almost any currency currently, has made it take a position as the most used digital currency worldwide. In fact, it is the next big thing in the world economy, especially because it is not controlled or influenced by any central authority or government. And that is what people want to hear. So how can one get to own a Bitcoin, here are 3 ways.
The three easy ways to get Bitcoin
Basically, this is the process of generating new Bitcoins using special software. Those with the highly specialized mining computers and the required mining skills are called Bitcoin miners. This is an increasingly growing area of interest among enthusiasts, especially as it is still very profitable. Miners get rewarded. To mine Bitcoins, the first thing you will need is a very secure Bitcoin wallet, to keep your mined coins. There are wallets for many operating systems such as Windows, Android, Mac, Linux and even ios. Mining, however, is controlled by certain generally agreed on a set of rules, including the exact amount as a reward for mining. Therefore, strictly speaking, this is the most difficult way to get Bitcoins.
This is an even easier way to get Bitcoin usually involving wire transfers or a third party banking service. Bitcoin first became commercial when it had an exchange and has grown even more commercial with increasing number of exchange sites. To get Bitcoin from such an exchange site, one pays fiat money to buy Bitcoins. The buyer also has to have a Bitcoin wallet. To register in an exchange, you will be required to give your ID and wallet address, so that after the process of the transaction is successful, you will receive the Bitcoin in your wallet. If you want to exchange through this process, there is usually extra identity verification on the website, for security. Coin base is the largest Bitcoin exchange currently. Some exchanges such as Wall of Coins also operate a peer-to-peer system, among others. These sites exchange money for Bitcoin at slightly different rates, because they charge fees for their services. Yet, PayPal offers the easiest way to get Bitcoin (buy Bitcoin).
This exchange can also be carried out using Bitcoin ATMs worldwide. There were 1,587 Bitcoin ATMs worldwide as of October 2017. They are located majorly in urban areas because of machine costs. You pay cash into the ATM and the ATM credits your wallet.
Accept Bitcoin as a means of payment
Because Bitcoin is the most well known digital currency, many large companies, stores and even individual merchants now accept Bitcoin payment as a way to get Bitcoin. And with a fluctuating value, the amount paid for a commodity in Bitcoin today, maybe more than the actual worth of the same commodity tomorrow, hence doubling profit. Amazon, Microsoft, Dell, Subway, Virgin airline and so much more, accept it. In 2010, Papa John’s used 10,000 Bitcoins to purchase 2 Pizzas. That runs into millions of Dollars now.
Presently, some people assume that if you do not know what Bitcoin is about, then you are missing out. As it continues to grow, it has helped make online transactions a lot easier. Here is the complete guide for you about How to Buy Bitcoin – Trading Bitcoin for Beginners. Sending large money to countries is easier as well as virtual buying, all thanks to the rising cryptocurrency, Bitcoin.
What is Bitcoin
Bitcoin is the world’s first digital currency that makes use of encryption techniques to control or manage the production of currencies and it validates the transfer of money. Hence, Bitcoin operates its transactions independently without relying on a central authority.
When we dig deeper into what this global digital currency is all about we find out that;
In 2009, the world’s first cryptocurrency and the global digital payment system were created by an unknown person or group of persons under the pseudonym, Satoshi Nakamoto. It was first created and launched as an open-source software. Bitcoin operates as a peer-to-peer system in which all of its transactions are done directly without any form of third-party or intermediary. A network node verifies all Bitcoin transactions and a public ledger otherwise called a blockchain keeps a record of all transactions. Bitcoin also operates on a decentralized system that makes it a decentralized cryptocurrency.
In other words, Bitcoin is simply a digital currency used for online transactions. A central authority does not control Bitcoin, and it operates on a decentralized system. Using Bitcoin eliminates intermediaries or third party.
Related: TOP 5 BEST BITCOIN WALLETS
How Does Bitcoin Work?
Bitcoin has a technology that backs it up. This technology is what we call a public ledger is known as the blockchain. This blockchain is in charge of managing and regulating all data on its record. The blockchain is in charge of managing all Bitcoin transactions.
A network of nodes that run the Bitcoin transactions is in charge of maintaining the public ledger known as Blockchain. It authenticates every Bitcoin transaction and then adds the copy to the ledger. Also, the blockchain has a distributed database that used to conduct independent validation of the ownership of all Bitcoins. Furthermore, network node allows the system to know when a Bitcoin is used for certain transactions stores the copy of every validation.
The above-detailed description tells us more about Bitcoin and what it entails but that is not all. Apart from knowing the definition of Bitcoin and the technology that powers it, it is important to know how the system and the trading platforms work. Before then, it is vital to know why you should consider trading Bitcoins.
Here are some other ways of buying bitcoins:
Why You Should Trade Bitcoins
As Bitcoin becomes popular, more and more people are trading and investing in it. There are many reasons why an individual should consider trading or invest into this digital currency. For example; A person should invest in Bitcoin because it is worldwide. Bitcoin is everywhere, and due to this, its potential is on the rise. Also, Bitcoin transaction fees are low which makes it a better option.
The Bitcoin system connects buyers and sellers who trade their Bitcoins. To trade your Bitcoin, you are to find a Bitcoin exchange. When choosing a Bitcoin exchange, there are some things to note. They include;
- The Fees; choosing an exchange could be a bit tough but then you have to consider the fees by making sure that the fees charged by the exchange are not expensive as it should be very affordable and flexible.
- Available Currencies; Another point to note is the currency that the exchange supports. What is your preferred currency and does the exchange support it?
- Trust; A good exchange always tries its best to win the trust of its customers. Hence, how reliable is the Bitcoin exchange you are considering?
Presently, we have various Bitcoin exchange, but among all of them, the best three based on user reviews are;
Bitstamp – (How to Buy Bitcoin – Trading Bitcoin for Beginners)
Bitstamp is a Luxembourg based Bitcoin exchange. It is one of the oldest and world’s largest exchange. Bitcoin accepts various currencies for transactions. It supports currencies like the U.S Dollar and EUR. It also accepts the use of cryptocurrencies such as Bitcoin, Ripple, and Litecoin. These currencies are used for deposit and withdrawal purposes. It also offers custom features to its users.
CoinBase – (How to Buy Bitcoin – Trading Bitcoin for Beginners)
This digital exchange company was founded in the year 2012. It supports various currencies such as Bitcoin, Litecoin, Ethereum, etc. Coinbase is one of the most popular exchange companies that come with various features. It offers features like; Mobile Wallet, Insurance Protection, Instant Exchange, Secure Storage, Full Control, etc.
BitFinex – (How to Buy Bitcoin – Trading Bitcoin for Beginners)
BitFinex is one of the largest Bitcoin trading platforms. This cryptocurrency is a Hong Kong-based Bitcoin exchange. As at 2014, BitFinex was the largest Bitcoin exchange platform. Bitcoin supports several currencies such as Ethereum, Litecoin, etc. It makes use of a liquid order book which makes it easy to for its users to exchange Bitcoin and other cryptocurrencies such as; OmiseGO, Ethereum, Iota, Bcash, Litecoin, Dash, EOS, Ripple, Ethereum Classic, Zcash, Sentiment, and Montero. BitFinex has a good security system.
Its security entails the following; a two-factor authentication (2FA), Universal second factor (U2F), Advanced verification tools which are used to monitor the integrity of a user’s account. It also comes with withdrawal protection, advanced API key protection and Email encryption with PGP. Regarding the system security, BitFinex is packed with an up-to-date Linux system, Automatic backup of the database, Automatic duplication of backup data and Protection from DDoS attacks.
Apart from choosing a Bitcoin exchange, you may also want to consider owning a Bitcoin wallet so that you can securely store your Bitcoins. So, what is this Bitcoin wallet?
A Bitcoin wallet is simply a secured web that allows Bitcoin users store, send and receive Bitcoins. However, some Bitcoin exchanges double as a wallet too. When picking a wallet, we advise users to pick wallets with a multi-signature security. A Bitcoin wallet could come in several types such as the; Online Bitcoin wallets, Mobile/Software Bitcoin Wallets, Hardware Bitcoin Wallets. There are various types of Bitcoin wallets and among them are;
This is a hardware wallet that generates its private keys offline. Trevor is a small computer device comes with lots of features like backup features, maximum security, and all other basic features.
Coinbase also doubles as a Bitcoin wallet. It comes with the mobile version of the wallet. One of the reasons to consider Coinbase is the fact that it comes with many exciting features such as; maximum secure storage, Insurance protection, full control.
This is a mobile wallet. The bread wallet is available to IOS and Android users. The Bread Wallet gives its users financial freedom. It is the first stand-alone IOS Bitcoin wallet. The wallet offers basic trading features such as sending, receiving and storing of Bitcoins.
This is a hardware wallet that secures digital currencies. It is not limited to the only Bitcoin as it stores other cryptocurrencies like; ethereal, lite-coin, namecoin, It comes with a backup feature, secure storage, an enhanced recovery feature, virus and malware proof and so much more! Keep key comes with a high level of protection/security to help protect it from hackers.
More so, we have other wallets such as; Ledger Nano, Green Address, AirBitz, Copay, Armory, Mycelium, Bitcoin core, etc. When selling Bitcoins, you can decide to sell your Bitcoins either directly to the person or through an online exchange. These methods can be referred to as; The Bitcoin Direct Trade and The Bitcoin Exchange Trade.
The Bitcoin Direct Trade – (How to Buy Bitcoin – Trading Bitcoin for Beginners)
This has to do with trading your Bitcoins directly to the person. This trading method does not require an intermediary, and it could be safer as the person gets to know his/her trading partner.
The Bitcoin Exchange Trade – (How to Buy Bitcoin – Trading Bitcoin for Beginners)
One way to sell Bitcoins is to register with an online exchange such as; BitFinex, Coinbase, etc. Registering with an online exchange requires a person to verify his/her identity. You are required to verify your identity for security reasons. After completing the required verification method, the next thing to do is to sign in and deposit funds into the account. After funding the account, it is advisable to know when to buy Bitcoins and when to sell them. Knowing when to buy or sell one’s Bitcoins can help bring in more profits. One of the ways to know when to buy or sell your Bitcoins is by reading about the latest trends in the Bitcoin industry. With the internet, getting access to such information or updates is not hard as Google is your friend! It is highly important to read the updates of the Bitcoin market to ascertain whether the price is rising or falling.
Finally, there are various tips on how to trade on Bitcoin as the trading method may seem a bit wide. Nevertheless, trading your Bitcoins the right way goes a long way for the owner. It is also essential that a Bitcoin trader does not miss market opportunities.