Buying and selling bitcoin is very straightforward. It’s like buying and selling stocks and may in some ways be easier… At least, for now. The steps are:
1. Educate Yourself
2. Choose What Wallet to Use
3. Start Buying/Selling
Step 1: Educate yourself
Buying and selling Bitcoin is easier than ever. It should be fairly secure as long as you keep your wallet or exchange account to yourself. There is no need to brag about your holdings, you might become a target by thieves looking for some quick bucks. As discussed in our earlier article, public addresses are available for everyone to scrutinize since Bitcoin’s transaction history are publicized on the blockchain, every will be able to see how much each public address has and all the transactions that went into it.
To buy Bitcoin, you will be required to have a digital/crypto wallet. Part of the requirements are IDs (if you’ve decided to go for Know Your Customer services), internet, and a payment method of (debit card, credit card, etc). There are Bitcoin ATMs and P2P exchanges in some countries too. In this article, we will focus on digital exchanges.
Step 2: Choose What Exchange to Use
The cryptocurrency exchange allows you to buy and sell cryptocurrencies pretty much like a broker does. You will want to choose an exchange that can be easily connected to your digital wallet for easy withdrawal. There are many exchanges to choose from. Some offer anonymous transactions and some don’t. But, if you prefer the more secure exchange go for ones that require KYC (Know Your Customer), The most popular ones are Coinbase, Binance, Gemini and Kraken. You will have to do research of your own on which platform would match your needs since these exchanges offer different charges for each trade.
Once you finish signing up for these exchanges, make sure you’d follow basic security measures like two-factor authentication and using unique passwords.
Once you’re in the exchange interface, connect your payment options. Depending on the exchange, you will be required to provide a few things like personal data, IDs, social security number, source of funds etc. Again, every exchange is different and some will require more than the others. This is pretty much just like setting up your basic trading account. Along with this step is the option to connect your debit and/or credit card.
Step 3: Start Buying/Selling
From here on in, it’s pretty much just getting used to the platform you chose. You can start buying and selling Bitcoin now!
Extra Step:
It’s good practice to have a separate digital wallet outside your exchange. The cryptocurrency wallet will enable you to securely keep your cryptocurrencies. There have been hacking incidences on exchanges in the past so this extra step might save you in the future.
There are two kinds of wallets, hot wallets, and cold wallets. Hot wallets are wallets available online while cold wallets are either hardware based (usb type device) or paper based.
Hot wallets are the more convenient option of the two. You just have to bear in mind that anything digital is subject to more safety concerns. It’s good practice not to store your private key on a device connected to the internet. Most exchanges will provide a hot wallet for you to keep your cryptocurrencies.
Cold wallets on the other hand use paper or flash drives. Paper wallets can be generated via websites that produce public and private keys for you. The generated key can them be printed out. This print out will allow you to access your exchange. Some or most people will have these laminated and kept in secure places.
Flash drives are cold wallets that are in between digital and paper wallets in terms of convenience. Flash drives can be kept away from the internet and therefore away from cybercrime. Cold wallets are the more secure option for crypto safekeeping.
Not it’s time to decide if Bitcoin is right for you!
What do you think?