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How to Buy Bitcoin With as Little as $1 – A Complete Beginner’s Guide

How to buy bitcoin?

This is the single most searched query on Google lately. And the rage is all evident with the returns that Bitcoin is giving. We have seen a number of digital assets (also known as cryptocurrencies) emerging in the past decade. The oldest among them was Bitcoin, which is currently dominating the whole cryptocurrency market.

If we compare the return-on-investment (ROI) of Bitcoin with other types of investment, we can clearly see the coin beating other traditional investments.

They say “Investing is boring as hell when you play it safe.” This is why investing in Bitcoin, or any other investment platforms seem so exciting. Though they are volatile, with massive ups and downs every few minutes, let alone over the course of a day, you are very well rewarded in the long run provided you make wise entries and exits.

Let us not give away any small returns by being unaware of how to buy bitcoin. Let us get started.

Also read: What is Cryptocurrency? – Everything you need to know

How to invest in bitcoin?

Despite receiving significant attention in the financial world, many people do not know how to buy the cryptocurrency Bitcoin, but doing so is as simple as signing up for a mobile app.

With cryptocurrency back in the news again, now’s a better time than ever to delve into the weeds and learn more about how to invest. Here’s a breakdown of everything you need to know in order to start buying bitcoin. Before we know how to buy bitcoin, we must know what a Bitcoin wallet is.

Bitcoin Wallet

As Bitcoins don’t exist in any physical shape or form, they can’t technically be stored anywhere. In order to conduct transactions on the bitcoin network, participants need to run a program called a wallet.

A Bitcoin wallet is a software program in which Bitcoins are stored. Every wallet has a public key and a private key (secret number), which are long strings of numbers and letters linked through the mathematical encryption algorithm used to create them.

The public key is the location where transactions are deposited and withdrawn from. This is also the key that appears on the blockchain ledger as a user’s digital signature. The private key is the password required to buy, sell, and trade the bitcoin in a wallet.

A private key should be a guarded secret and only used to authorize Bitcoin transmissions. Some users protect their private keys by encrypting a wallet with a strong password and, in some cases, by choosing the cold storage option; that is, storing the wallet offline. In any case, DO NOT FORGET YOUR PRIVATE KEY.

It is this Bitcoin wallet that facilitates the sending and receiving of Bitcoins and gives ownership of the Bitcoin to the user. The Bitcoin wallet comes in many forms. The four main types are desktop, mobile, web, and hardware.

Steps to Buy Bitcoin:

Here’s all that you need to know to buy Bitcoin.

1. Get a Bitcoin Wallet

Open a wallet with any of the wallet service providing companies. When registering for a digital wallet, the U.S. Securities and Exchange Commission (SEC) requires users to verify their identities using several personal documents including their driver’s license and Social Security number (SSN).

2. Join a Bitcoin Exchange

After you’ve set up your wallet with a payment method, you’ll need a place to actually buy bitcoin. There’s no official Bitcoin company because it’s an open-source technology, but there are several different bitcoin exchanges (just like a stock trade) that facilitate Bitcoin transactions.

Remember that the bitcoin exchange and the bitcoin wallet are not the same things. Exchanges connect you directly to the bitcoin marketplace, where you can exchange traditional currencies for bitcoin.

Bitcoin exchanges are similar to foreign exchange markets. These are typical digital platforms where Bitcoin is exchanged for fiat currency—for example, bitcoin (BTC) for U.S. dollars (USD).

Some exchanges also offer wallet capabilities to users, though it is not their primary business. If you decide to purchase from an exchange, you’ll have to decide which exchange you want to buy from. Here are a few of the most popular options:  CoinmamaCEX.IO, and Gemini.

Also read: 15 Ways Every Teenager Across the World can Make Money Quickly

3. Secure Internet Connection

If you choose to trade bitcoin online, use discretion about when and where you access your digital wallet. Trading bitcoin on an insecure or public wifi network is not recommended and may make you more susceptible to attacks from hackers.

4. Bank Account, Debit Card, or Credit Card

When you’ve obtained your wallet, you’ll need to link it to your bank account. This enables you to purchase coins and sell coins. You can use a traditional payment method such as a credit card, bank transfer, or debit card to buy bitcoins on a bitcoin exchange. The availability of the above payment methods is subject to the area of jurisdiction and exchange chosen.

Depending upon the exchange, there may be benefits and disadvantages to paying with cash, credit or debit card, or bank account transfer. For instance, while credit and debit cards are among the most user-friendly methods of payment, they tend to require identification and may also impose higher fees than other methods. Bank transfers, on the other hand, typically have low fees, but they may take longer than other payment methods.

That is it. You can now buy your first bitcoin or a part of it. Yes, you heard it right. The digital wallets also allow you to buy any smaller part of a bitcoin. If you have $1, you can buy one dollar worth of bitcoin.

Is Cryptocurrency Legal in India?

Now crypto trading is legal in India, according to a recent rule out by the Supreme court. There’s no question that they’re legal in the United States, though China has essentially banned their use, and ultimately whether they’re legal depends on each individual country. Also, be sure to consider how to protect yourself from fraudsters who see cryptocurrencies as an opportunity to bilk investors. As always, buyer beware.

Is Cryptocurrency a Good Investment?

Cryptocurrencies may go up in value, but many investors see them as mere speculations, not real investments. The reason? Just like real currencies, cryptocurrencies generate no cash flow, so for you to profit someone has to pay more for the currency than you did.

This price volatility of cryptocurrency creates a conundrum. If bitcoins might be worth a lot more in the future, people are less likely to spend and circulate them today, making them less viable as a currency. Why spend a bitcoin when it could be worth three times the value next year?

Also read: Best Credit Card Hacks and Tricks in India – A Millenial’s Guide

Final thoughts

As with any market, nothing is for sure. Anyone’s guess is just about as good as anyone else’s when it comes to predicting cryptocurrency prices. Throughout their history, they generally increased in value at a very fast pace, followed by a slow, steady downfall until it stabilizes. As the world is becoming more reliant on the internet it’s no surprise that cryptocurrency, a secure, global, and digital currency has claimed the interest of investors. Cryptocurrency is open to everyone and provides an exciting opportunity to delve into an entirely new asset class. Investing in cryptocurrencies may seem scary, but know that it takes time and effort to understand how Bitcoin works. Also, keep in mind that the regulatory perspectives on cryptocurrencies globally are varied, and do your own research based on where you live.

Thanks for reading. Stay safe.

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One Comment

  1. Hey, thanks for the blog post. Really looking forward to read more. Much obliged. Eyde Samuele Komara

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