How Do We Buy Bitcoins

buy bitcoinThere is no denying that bitcoin is quickly becoming a popular – and valuable – form of virtual currency. Not only is the currency hitting record highs, there is no so many more avenues available for bitcoin users.

There are a greater number of retailers accepting bitcoin and you can even trade binary options using the currency as there are brokers that accept it. All of this means that buying bitcoin can be a lucrative opportunity. All that remains is to find out just how you can do this:

First Step: Get Yourself a Bitcoin Wallet

Before you start buying bitcoin, you will need a bitcoin wallet. Unlike a wallet where you store physical money, bitcoin isn’t really stored here. Instead, it contains your public and your private keys which are what is used to ensure a secure transaction. There are four types of wallets that you can choose from.

The most common option is to download software onto your computer or mobile device. It can be downloaded onto your phone in the form of an app. There are various vendors offering different versions of a bitcoin wallet.

The other choice that you have is to use a web based service. Here, the keys for your bitcoin are stored on a separate server. Although this means that you can access your wallet from any desktop, it is not the most secure option.

There are also now hardware wallets that are essentially digital devices that are extremely secure and can be used for larger purposes. There is even a paper wallet where you can print out the files with your key data.

So, how do bitcoin wallets work? Well, they contain two 16 digit passwords – they are known as public and private keys. The public key informs the vendor where the bitcoin should be sent while the private key is what you use to confirm that a transaction has been made.

Where Can You Buy Bitcoin?

Bitcoin can be purchased from platforms known as bitcoin exchanges. These are places where you can turn physical currency such as dollars or euros into an equivalent amount of bitcoin. There is another form of exchange that is also gaining popularity. These are bitcoin ATMs where you deposit money into them and the bitcoin are sent to your bitcoin address. There are also individual vendors that are involved in selling or trading bitcoin with you.

Then there are binary options brokers that allow you to use bitcoin as a medium of exchange. This is when you place a trade on a particular asset and in the event that it ends up in the money, you get paid in bitcoin.

How Can You Purchase Bitcoin?

When you are dealing with exchanges, there are several ways that you can buy bitcoin. If you want to purchase bitcoin as fast as possible, credit cards and debit cards are good ways to manage this. This is because you will have access to bitcoins the moment the transfer has been verified. Of course, when using credit cards, you can expect to pay higher processing fees than with other payment options.

Equally as popular are bank transfers. They are particularly useful if you want to purchase a larger volume of bitcoin. With bank transfers, however, the transaction can be quite long. You typically have to wait several days before you can use your bitcoin. With credit cards, debit cards, and bank transfers, you have to use some sort of identification to make the exchange.

Cash exchanges can be utilized by individuals who want to make a quick exchange and don’t want their identity attached to the purchase. Unfortunately, this method can be notorious as you are dealing with individual vendors. Also, the exchange rates tend to be much higher than with other choices.

Officially, payment options such as PayPal will not let you purchase bitcoin with their platforms. Although some people have found creative solutions to this, it still is forbidden by these payment platforms.

Once you have bought bitcoin, you can use exchange systems to both sell and buy bitcoin. There are many exchange systems that offer wallets and vice versa. This allows you to be officially engaged in the bitcoin marketplace.

This is the process involved in purchasing or trading bitcoin with either exchanges or individual vendors.


Page Updated: July 3, 2017

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