How to buy bitcoin

If you’ve been around the financial world lately, then we are sure of you catching the new buzz word in town which is ‘Bitcoin’. Bitcoin has now became the most popular cryptocurrency, and with the serious money it has in it, more peeps are looking forward to own this virtual currency.

After doing all the research, if you’ve decided to invest in bitcoin or any other cryptocurrency – you might have following questions in mind.

  • What’s a authentic place to buy a bitcoin
  • What’s the process?
  • What wallet should I link my bank account to?

Bitcoins can be bought on multiple exchanges or directly from other people via marketplaces but the first step is to set up your digital wallet.

Step 1: Setting up a digital wallet

In the vast scope of categories of wallets available, you have variety of services to choose from. Blockchain & Coinbase are the two popular digital wallets. While some Bitcoin exchanges also provide a digital wallet feature, we do not recommend this route due to security concerns – exchanges focus more on currency trading, and less on keeping the user’s Bitcoins safe whereas online digital wallets come of hardly any cost to the customer.

Step 2: Open an account at an exchange

The buying and selling of bitcoins are done by cryptocurrency exchanges. There are already many players in the market currently operating, with varying degrees of liquidity and security, where new players continue to emerge, others are at the verge of closing down. One of the largest bitcoin exchange in the world currently, in terms of US dollars volume is Bitfinex. There are other exchanges with higher degree of volumes like Bitstamp & Poloniex.
With KYC (Know-your-customer) & AML (Anti-money-laundering) regulations in place, most of the exchanges now require verified identification for setting up the customer’s accounts.

Step 3: Choosing a payment method

Most exchanges accept payment methods via bank transfer or credit card while some accept paypal transfer. Debit/Credit cards have higher fees associated to it. So if you’re US based we suggest you to opt for the Bank Account.

The setup & transaction procedures differ from exchange to exchange and each exchange provides you sufficient details to execute the purchase. The exchange which you opt for, once after receiving the payment, will purchase the corresponding amount of bitcoin on your behalf & deposit it in your wallet. It could take minutes or sometimes hours depending on the network pipeline.

Again, if you’re residing in the US and willing to exchange bitcoin for cash then you can go for LocalBitcoins & LibertyX which lists the retail outlets across US at which you can exchange cash for bitcoin.

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