Bitcoin and other forms of P2P electronic cash systems are taking off because transactions are unregulated, cheaper and international payments using the currency are easy and convenient to do. Other people buy Bitcoin because, with these advantages over traditional currencies, it is likely to go up in value. If you feel like taking a bit of risk by buying Bitcoin, here’s how you can do so.
Sign up for a wallet service
You can sign up for a wallet service which is the easiest way to get started with Bitcoin for the total beginner. The most popular are Coinbase, Block Chain, and Xapo. These Bitcoin services are accessible via desktop and mobile and signing up is similar to signing up for a regular online service: just provide your name, email, and password and you are ready to go.
Secure your account.
Exchanges like Coinbase use a two-step verification security system to secure your account. You can also use Google Authenticator or a security or private key like YubiKey.
You can log in to your Coinbase account where you can see how Bitcoin values have changed over time. You can select an amount to buy, input the address where you want the Bitcoin to be sent and check out. Online wallet services like Coinbase allow users to use a credit or debit card to make purchases.
You can also purchase Bitcoin by joining an exchange. You need to provide your country of residence as well as your desired exchange currency. The exchange may also require you to present one or more proofs of identification before you can proceed.
The next step is to connect your bank account. Any purchases or sales of Bitcoin that you do will be deducted or deposited to your bank account. Once this is done, you can choose how much you want to purchase and confirm your purchase.
With services like CoinBase, you can set alerts that tell you when the BTC price has climbed or dipped to a certain amount. This is a good way to keep tabs on values and help you decide whether you want to sell or not. You can complete the sale of Bitcoin through the same wallet service. All these transactions are completed in a process called mining where transactions are verified and added to the public record or ledger. Verification is done with the use of a digital signature which facilitates non-repudiation because it means that the person who sent the message is the holder of the key and therefore the owner of the Bitcoins.
Safety of Buying Bitcoin
While buying Bitcoin can be a breeze, financial experts caution buyers into putting too much money into cryptocurrency especially since Bitcoin and other cryptocurrencies have proven to be very volatile. Prices can surge up then plummet in a matter of hours. Bitcoin accounts are also a favorite target of criminal hackers. Phishing attacks are common and scammers promising quick returns prey on those who are new to cryptocurrency trading. It is therefore very important to ensure that you are dealing with legitimate websites and to use common sense when faced with deals that seem too good to be true.