Over the course of 2017 bitcoin rose by more than 2000% in value.
This huge increase in value spurred an equally massive rise in the interest in owning bitcoin.
Unfortunately, most people not already in the bitcoin community had no idea where to buy Bitcoin.
Luckily entrepreneurs stepped up and made purchasing and owning bitcoin easier than ever.
Use this guide to learn how you too can easily and safely buy bitcoin.
Bitcoin vs. Altcoin
When a lot of people talk about buying bitcoin they really mean a different kind of cryptocurrency. Bitcoin is the oldest and most valuable cryptocurrency in existence. It effectively created cryptocurrencies as we know them today.
Altcoins refer to any other cryptocurrency than bitcoin. Ethereum, Bitcoin Cash, Ripple, and Litecoin are some of the most popular altcoins today.
Bitcoin exists solely as a currency. It was designed from the ground up to be a store of value. Other cryptocurrencies perform different functions.
If you want to dip your toes into cryptocurrency investing, bitcoin is a great place to start.
Where to Buy Bitcoin Safely
When bitcoin was first created the only way to really get any was to mine it. Nowadays anyone with a credit card can purchase bitcoin.
The first step when thinking about buying bitcoin is to set up a bitcoin wallet. When you’re just starting out you can simply download the software from a number of different sources and run it on your own computer. Once you have a working wallet you can then transfer bitcoin to it.
There are several ways to buy bitcoin depending on how you want to pay and what level of privacy you are seeking. Here are the two most commonly used methods.
Cryptocurrency exchanges are similar to a stock or currency exchange. You will see a list of different cryptocurrencies along with their current market value.
There are hundreds of different cryptocurrency exchanges operational. Depending on the exchange you choose you will have the option to pay using credit cards, bank drafts or other cryptocurrencies.
For the sake of safety and security, you should always use on that is reputable and widely used. The five largest cryptocurrency exchanges currently are:
Coinbase is the largest exchange in the world, with more than 10,000,000 active users. It only trades bitcoin, bitcoin cash, ethereum and litecoin. Coinbase has a user-friendly interface and allows you to create an account fairly easily.
You are required to give them your full information and upload a photo id before you can make purchases. Once ID’d you can connect your credit card or bank account and buy bitcoin using them. You can also deposit money into Coinbase and use that as a trading balance.
Changelly allows you to upload your own bitcoin wallet information and use this to buy and sell other altcoins. Changelly doesn’t allow direct purchases of cryptocurrency using fiat currency. If you plan on trading in cryptocurrencies, changelly is a good site to keep in mind.
Binance is more of a pure trading platform than the other exchanges. Binance does not allow purchases of cryptocurrency using credit cards or banks. Instead, users can deposit their existing cryptocurrency into a Binance account.
Once an account is funded the user can then freely trade their cryptocurrency into other altcoins or bitcoin.
CoinMama is an easy to use exchange that helps you purchase ethereum or bitcoin. You pay using a credit card and simply direct the bitcoin deposit to your existing bitcoin wallet.
They sell you bitcoin or ethereum directly from their own wallet, charging a small fee for the service.
LocalBitcoins operates differently from the other major exchanges. Instead of purchasing bitcoin directly through an exchange it puts you in contact with people who want to sell their own bitcoin.
Think of it like Craigslist for cryptocurrency, but with a guarantee of security. You can purchase bitcoin either totally online or you can buy them using cash through an offline meetup.
Many people want to know where to buy bitcoin physically. Bitcoin ATM’s answer this question. With the boom in cryptocurrency prices, the number of ATM’s worldwide grew tremendously.
The main reason to purchase bitcoin from an ATM rather than an exchange is privacy. Most ATM’s require only an accepted form of payment and a bitcoin wallet address.
Many ATM’s will even allow you to deposit cash into them to purchase bitcoin.
Buying bitcoin from an ATM is easy. You simply set up a wallet beforehand and direct the ATM to deposit the bitcoin to that address. Then you pay for the number of bitcoin or altcoin you wish to purchase.
Keeping Your Bitcoin Safe
Knowing where to buy bitcoin is just the first step in owning cryptocurrency. Once it’s yours you have to take proactive steps to keep it safe.
Most exchanges will allow you to store any bitcoin you purchase from them on their servers. This is convenient if you plan to trade bitcoin and altcoin frequently but it has its own risks as well.
Several major cryptocurrency exchanges have been hacked. In one case the hackers managed to steal over half a billion dollars worth of cryptocurrency.
If your purchase of bitcoin was more of a long-term investment it’s a smarter move to transfer them from the exchange. You can set up a bitcoin wallet on your own device fairly easily.
If you want to maximize the safety of your investment you should use a hardware wallet. This is a small device that securely stores your bitcoin offline. There are many different kinds of hardware wallets available, though Ledger and Trezor are two of the most popular.
Know What You’re Doing
Now that you know where to buy bitcoin and other altcoins you need to decide how you want to use them and what your strategy is. Simply buying into something based on hype, without doing your research, is a recipe for disaster.
If you would like to find out more about protecting and using your bitcoin, read these other helpful articles.