Bitcoin was the first digital currency to become popular for allowing users to send or receive money without the use of a third party. Since its launch in 2009, cryptocurrency transactions have surged globally. This guide offers a brief introduction about cryptocurrency trading and how you can buy your first set of bitcoins.
Table of Contents
- A cryptocurrency is any decentralized currency that uses encryption to facilitate money transactions.
- Cryptocurrency transactions are registered on a public ledger known as a blockchain.
- Cryptocurrencies are decentralized and not backed up by a centralized government.
- Some cryptocurrencies offer anonymous transactions.
What you need to buy Cryptocurrency
A wallet to store your cryptocurrencies
A cryptocurrency wallet is any platform that allows you to store your tokens in a safe environment. There are both online and offline wallets.
- Online wallets are great if you plan to engage in regular cryptocurrency transactions.
- They are easier to access and setup.
- They are, however, vulnerable to malware attacks.
An offline wallet comes in the form of a USB device or a paper document. An offline wallet should be your choice if:
- You wish to store your cryptocurrencies away from hackers.
- You know how to keep items safe
- Avoid an offline wallet if you are prone to losing items
An Exchange Platform
Cryptocurrencies are sold and bought on trusted exchange services such as Coinbase. Cryptocurrencies exchange platforms work in the same sense as banks or any currency exchange platform. Choose an exchange platform wisely by considering:
- The reputation of the exchange service.
- The types of cryptocurrencies supported
- Security of the exchange
- Additional services offered
After settling on an ideal cryptocurrency exchange, you will be asked to verify your identity. This could be a digital image of your passport, utility bills and/or physical addresses. Although you are required to provide this information, transacting with some cryptocurrencies such as Monero and Dash allows a high level of privacy. Learn more here, https://blockgeeks.com/guides/how-to-invest-in-cryptocurrencies/.
Buy your First Bitcoins
A cryptocurrency exchange service like CoinBase offers a seamless way of buying bitcoins.
- Simply load your account with the amount of money you wish exchanged with cryptocurrencies.
Currently, CoinBase only facilitates the buying and selling of 3 major cryptocurrencies: bitcoin, litecoin, and Etherium. If you want to buy other cryptocurrencies, you will have to register with a different exchange service. However, you will often have to buy bitcoin as your first cryptocurrency. Here is why:
- Bitcoin is like the SI unit for other coins-to buy another coin, you need bitcoins.
- Bitcoin is the most traded digital currency to date.
The minimum recommended amount of bitcoins to own is $100 worth. You can buy more or less, but CoinBase sets $100 as the minimum amount. Once you pay the amount, CoinBase will guide you on how to transfer your bitcoins to a wallet. Usually, your wallet will consist of 3 important things:
- A public key-A public key is a set of characters that enables other cryptocurrency users to transact with you.
- A private key-This is a string of characters that acts as proof you own the bitcoins. You need this key to withdraw your bitcoins.
- QR code-For better security, your addresses are supported by a QR code that you must scan before proceeding with any bitcoin trading.
What to do with your bitcoins
Now that you have some bitcoins, you can hold them in your wallet and wait for their value to rise. Alternatively, you can use them to buy other cryptocurrencies whose value you think will lead to better profits in the future. You can also use your bitcoins as a currency for buying products where accepted.
Buying cryptocurrency is quick and easy. Keeping them secure and knowing when to trade them is the hardest part. Stay informed about bitcoins by visiting our website regularly.