Bitcoin, also known as BTC, is a peer-to-peer virtual currency payment system developed by a software developer under the pseudonym of Satoshi Nakamoto. Although it didn’t initially become known to the general public, Bitcoin has garnered immense attention in the world of finance as of late.
With the growing popularity, investing in Bitcoin today is also more straightforward and convenient than it was only a few years ago. But it’s worth mentioning that Bitcoin is different from a traditional investment such as investing in stocks due to the volatile nature of the commodity, which is why it is crucial to acknowledge the risks before buying bitcoins.
#1 Purchasing and Exchanging Bitcoin with a Bitcoin Wallet
Exchanging Bitcoin is so much easier for beginners today, but first, you will need what is known as a Bitcoin wallet. As you may infer from the name, a Bitcoin wallet is where you store your bitcoins and through which you make all of your BTC transactions. Simply put, a Bitcoin wallet is sort of an online checking account for your virtual currency. The process of creating a Bitcoin wallet is also fairly easy and can be completed online in a matter of minutes. Platforms such as Coinbase and Hivewallet are good starting points to get your first Bitcoin wallet.
#2 Connect Your Bank Account to Your BTC Wallet
After creating your Bitcoin wallet, the next step is to store your bitcoin. The process isn’t unlike signing up for a PayPal account where you provide the pertinent financial information associated with your actual, conventional bank account. In most cases, you will be required to put in your full name, account number, and account routing number. In some cases, you might also need to enter a phone number.
And in case this all sounds very dubious and risky to you, the process in which you connect your actual bank account to your Bitcoin wallet is no different than online shopping. Practically most Bitcoin exchange platforms have high-level security and encryption measures in place to protect your information and funds against hacks and scams.
#3 Purchase Bitcoin with Funds Available in Your Bank Account
Once you have connected your bank account with your BTC wallet, which then typically needs to be verified by your BTC platform, buying Bitcoin and storing it in your wallet is a piece of cake. Your BTC wallet page typically has a straightforward menu for buying and selling BTC, and once you click the option to purchase Bitcoin, funds in your bank account are used to buy BTC. While the value of BTC is in constant flux, you should always see the exchange rate before you make any BTC purchases.
#4 You Can Use Bitcoin for All Purchases Where It Is Accepted
With the increasing popularity of Bitcoin and other cryptocurrencies, the number of retailers that accept Bitcoin as a legitimate method of payment has also been on the rise. While this is still not a great number, some huge names have already gotten on the BTC bandwagon, including WordPress, Amazon, Victoria’s Secret, Subway, Whole Foods, and more.
Those who are well-versed in how the market works can easily make a profit by purchasing Bitcoin when its value isn’t high, then buying products when the price of BTC goes up to get a good deal on products to sell the products later for a profit.
#5 Exchange BTC with Other Users
Sadly, selling Bitcoin is not as simple as purchasing it as there is no clear-cut route to get the cash value of your BTC in your actual bank account. How it works is that you need to find a user who is interested in exchanging money for your BTC. Usually, the most convenient way to get this done is through a Bitcoin exchange platform. Upon finding a buyer, the transaction takes places on the platform while you’re in direct contact with an interested buyer.
Of course, this process involves creating an account to sell BTC which also often entails ID verification unrelated to the one you completed while acquiring your BTC wallet. Where selling is concerned, CoinBase and CoinCola are some well-established platforms you can make use of to find buyers.
#6 Use an Exchange Platform to Sell Your Bitcoin
An alternative for those interested in selling BTC is signing up for a Bitcoin trading platform. Exchange platforms operate by connecting sellers with interested buyers. When there is a party interested in buying your BTC, the platform acts as the middleman and stores the funds during the process verification and completion of the transaction. These platforms typically charge a small fee for their service, and this process is not exactly the fastest, which is the main downside of such services.
Some well-established and popular trading platforms to consider for selling using this method are Kraken and Virtex. There are also some trading platforms where users can exchange Bitcoin for other cryptocurrencies such as Litecoin and Ethereum.
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