Things Every Beginner Should Know When Buying Bitcoin
Buying Bitcoin is now easier, thanks to the increasing number of crypto exchanges. However, be careful about the platform you opt to use when purchasing this virtual currency. That’s because you can lose your money buying Bitcoin. PayPal’s decision to accept Bitcoin on their platform pushed many people into considering investing in this electronic currency. However, some people don’t know much about the way this currency works. So, new to this virtual currency and you wish to start purchasing and selling it, here’s what you should know.
Essential Points to Consider
Every time you decide to buy Bitcoin, consider the following points:
- Payment method: When purchasing Bitcoin, you can use different payment methods. Prominent among them include bank transfer, credit card, payment apps like PayPal, Google Pay, Apple Pay, and Samsung Pay. You can also barter or pay with cash on a face-to-face basis. Every payment method comes with tradeoffs. Therefore, consider the associated fees, privacy, and convenience when choosing your payment method.
- Platforms: You will have many marketplaces to consider when purchasing Bitcoin. They include crypto exchanges that allow you to buy Bitcoin using fiat money. For instance, you can use Pattern Trader to buy and sell Bitcoin. 1K Profit App enables you to trade in different markets. It provides all the information a beginner needs to start trading Bitcoin. But if you don’t want to use a crypto exchange, you can purchase Bitcoin in peer-to-peer markets, over-the-counter desks, and centralized spot exchanges. You can also give a friend money in exchange for Bitcoin if you prefer buying it face-to-face. In addition to crypto exchange, you also need a digital wallet for storing your tokens. Essentially, your Bitcoin goes to a digital wallet after purchasing it.
Bitcoin Wallet Keys
Bitcoin won’t be yours if you lose the keys to your wallet. Holding Bitcoin in a digital wallet means you control the funds. That means you don’t need permission from anybody to use your Bitcoin. Essentially, you won’t wait for a centralized exchange or any other third party to approve your transaction when receiving Bitcoin. What’s more, you can send Bitcoin to another user at any time.
On the other hand, you can use a custodial wallet that may impose restrictions on receiving and using your Bitcoin. For instance, a custodial wallet might ask you to register your address before receiving or sending Bitcoin. Also, you may have to wait for several days to withdraw Bitcoin. Some platforms might not allow you to complete any withdrawal. The service provider can even freeze your account. For instance, if the platform sees you as a fraud or security risk, it can lock you out of the wallet account without recourse.
For these and other reasons, most people opt for non-custodial Bitcoin wallets. That’s because this option enables the user to customize the wallet, including the network fee for sending funds. Thus, you can save money when transacting with Bitcoin and send funds faster.
What’s more, non-custodial wallets provide more security. That’s because all you need is to exercise the best practices for managing your keys. That way, nobody can hack your wallet or expose you to counter-party risks like a centralized exchange that criminals can hack.
In addition to these considerations, choose a crypto exchange that complies with Anti-Money Laundering and Know Your Customer regulations. That means you may have to verify your identity when purchasing and selling Bitcoin. What’s more, consider fees for buying Bitcoin, which vary from one crypto exchange to another. The payment method you decide to use will also influence the costs of purchasing this virtual currency. Nevertheless, always prioritize security when buying this virtual currency
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