You’ve probably already heard about digital currencies and how they are disrupting the traditional way people transact. You’ve also probably heard about Bitcoin— the world’s most popular digital currency. And like most people, you may be wondering why this cryptocurrency suddenly becomes a hot topic whenever its value rises or drops.
While it can be hard to tell whether or not cryptocurrencies are the future of currency, one thing that’s for sure is that more and more businesses are starting to accept bitcoin as payment for products and services. Individuals are also increasingly adopting blockchain technology and investing in bitcoin. And here’s why:
- Security, privacy, and pseudonymity. Bitcoin users enjoy a certain level of financial anonymity and have greater control over their financial and personal information. Plus, there’s also greater network security compared to users of other forms of digital payments.
- Lower fraud risks for users. Users can complete their transactions without having to divulge any sensitive personal or financial information. As such, they face fewer risks of data breaches and identity theft than users of traditional or fiat currencies.
- Bitcoin is largely transparent. The fact that a bitcoin user’s personal information and financial data remain private means that they can easily access and evaluate their transactions at any point.
- Freedom to make payments. Bitcoin users can easily send or receive payments from anyone, anywhere, and anytime, without any limitations.
- Reduced transaction fees. If you’ve ever made a transaction using traditional currencies, you know users pay for various types of tax and fees based on the amount. With Bitcoin, no tax is charged and the fees are low.
If you’re looking to start investing in Bitcoin or are just curious about how someone can buy, sell, and use this cryptocurrency, this guide is for you. Here are four steps to getting started with Bitcoin.
Step 1: Join a Bitcoin Exchange
A bitcoin exchange is an online platform that facilitates the exchange and trading of bitcoins for other digital assets, including traditional, fiat, and digital currencies. The online platform acts as an intermediary or middleman when it comes to bitcoin investing.
Joining a bitcoin exchange will allow you to not only buy and sell bitcoin but also hold and withdraw your cryptocurrency to your own wallet. It’s important that you check which currencies an exchange supports before signing up. Keep in mind that there are many types of bitcoin exchanges and you may need to decide which one to use.
Step 2: Get a Bitcoin Wallet
In order to trade, store, and buy Bitcoin instantly, you need to have a crypto wallet like BitWallet. Bitcoin wallets can be categorized into hot and cold wallets. Hot wallets are wallets that are run and operated on internet-connected devices, such as mobile phones, desktops, tablets, and computers.
The fact that they’re usually connected to the internet creates vulnerability, making them susceptible to hacking. However, hot wallets are more convenient as users can easily access their bitcoins through a software program or using the internet.
Cold wallets are wallets that aren’t connected to the internet. They are considered to be the safest and most secure option as they’re less likely to be compromised. Cold wallets can either be hardware wallets (almost similar to an external hard drive or USB-stick) or paper wallets (a printout with both your public and private keys).
If you’re planning to store or trade small to medium amounts of bitcoin, then a hot wallet would be ideal. However, if you intend to store and trade larger amounts of bitcoin, it’s recommended that you choose a cold wallet.
Step 3: Connect your Bitcoin Wallet with a Payment Option
At this point, you have joined an exchange and obtained your bitcoin wallet. The next thing is to connect your wallet directly to your bank account or link it with a debit or credit card. Alternatively, you can link your bank account to your bitcoin exchange account. Once you’ve linked your bitcoin wallet or exchange to your bank account, you can now start buying and selling bitcoin.
Step 4: Place the Order
Now that you’ve set up the foundation, you can purchase as many bitcoins as you want. You don’t need thousands of dollars to invest in bitcoin. Most exchanges often allow users to purchase fractions of a single bitcoin. This means you can have $25 as your initial investment.
And remember to track your purchases and sales from the moment you make your first transaction. Take time to study the trends, review your investment strategy, and carefully assess your risk tolerance before investing in bitcoin.