Bitcoin price rally has drawn the attention many people. The bullish price confirms the Wall Street phrase ‘you snooze you lose’. Hence the reason for coming up with this comprehensive guide on how to buy bitcoins so that you don’t be left out when others are making profits from bitcoin.
It is important to understand the different payment methods that you can use to acquire bitcoin. This is important in order to adopt the most convenient method that would involve low fees, fast processing, and no bureaucracies. The table below is a summary of the most widely accepted payment methods and their advantages and disadvantages.
Payment Method Fees Anonymity Speed Difficulty
|Credit card||High||Bad||Very fast||Easy|
|Bank transfer||Very slow||Bad||Slow||Easy/Medium|
|Working for BTC||No fees||Good||Slow||Hard|
In as much as the payment methods are five, most bitcoin exchanges will accept bank transfers, credits cards, and bank wires.
There are different exchanges and websites that facilitate buying and selling of bitcoins. A thorough investigation should be done on those exchanges prior making a buy order. Some of the sites have reported cases of a security breach, hacking claims, liquidity problems among many other issues of concern. In an effort to scrutinize the exchanges, you should at least check if it’s under any regulation by a financial authority, the IT security deployment, financial and IT audits, customer service, and the insurance of your funds. Some of the reputable bitcoin exchanges and sites are; Coinbase, Kraken, LocalBitcoins, and Bitstamp. There are many others but the latter are the world most popular and trusted exchanges.
Identity verification is a requirement which is compulsory in some exchanges while in some it is not a requirement. Money laundering and cybercrime have been the trigger as to why some exchanges have the know your customer (KYC) requirement. If you choose an exchange that requires for customer identification, these exchanges will ask for your proof of identity and proof of residence. You will be asked for documents such as latest bank statement, national identity card or passport. In as much as the KYC requirement looks safe, you shouldn’t ignore the precaution to safeguard your identity against identity theft by some of rogue exchanges. It is even preferable that you watermark your identity documents.
Bitcoin safety isn’t to be neglected. The exchange will give you the bitcoin after purchase but the safety of the bitcoins solely lies in your hands. A secure wallet will guarantee you safety of your bitcoin and will shield you from attacks by hackers. Offline wallets are secure compared to online wallets. Online wallets will only require a password to log in and access to the bitcoin whereas offline wallets have private keys. Some online wallets might have the two-factor authentication option. Offline wallets are hard to penetrate because hackers will find it impossible to access your private keys.
After following the above-mentioned perquisites buying bitcoins will become a straight forward and hassle-free process. You will need to sign up to an exchange, register your details, add a payment method and make an order. This process hardly takes 20 minutes to complete. However, if there is a need for identity verification it might take longer depending on the broker.
Different exchanges will usually have different price quotes for bitcoin. It is important to have an analysis of the exchange that will give you the best price. That means you will be able to get the maximum number of coins for your money. You should also consider the fees charged by the exchanges, some exchanges will charge exorbitant fees making your investment attract high charges and getting less value than you expected.
It is important to know that Bitcoin prices are quoted against the price of one bitcoin. However, that doesn’t mean that if you have an amount less than the price for one bitcoin that you can’t buy. You can always buy fractions of bitcoins/milli-bitcoins (mBTC) up to the threshold that an exchange allows.