Initially, when the Internet first came out, the public never thought they would even use it. It felt way too sophisticated and complicated for regular users but once the ‘bankability’ and security issues were resolved, all those people were proved wrong. In the current state of affairs, almost everything can and is done via the Internet. The same goes with Bitcoin and Cryptocurrency.
There’s nothing you can’t do with digital coins. Charity, travel, food, business all of it is possible using bitcoin. Right now, the market has more than 1900 different cryptocurrencies and hundreds more will be upon us even before we know it.
But when it started, the word “Cryptocurrency” itself was synonymous with “Bitcoin,” as it was the only player in the space and still continues to be one of the biggest players.
This mysterious ‘money of the internet’, Bitcoin has steadily gained popularity over the past few years. While there are people who are using bitcoin for various transactions and mundane activities too, there are some who have not even started acquiring bitcoin.
Generally, it’s because they don’t know much about it and are afraid to take that risky plunge. So if you’re one of those people who would like to start with Bitcoin here’s a little help for you.
How to buy bitcoin?
So, after reading my previous 10 articles, you probably have a good idea of what bitcoin are and are excited about their potential. Interested in buying some now?
Well, the rule of thumb would be don’t invest more than you can afford to lose. I always have in my mind “only invest once you accepted the risk of losing money”. You lose, you gain. Cryptocurrencies are very volatile and there’s no telling which wave will hit you.
You can buy Bitcoin directly from other people via marketplaces or on exchanges. Platforms such as Localbitcoin will help you to find individuals near you who are willing to exchange Bitcoin for cash.
Localbitcoin is a peer-to-peer cryptocurrency exchange platform. It was founded in Finland back in 2012. The platform allows for safe and anonymous transactions with Bitcoin between the retailer and the customer without any involvement by an exchange. You can use this service in 224 countries and pay for bitcoin with a wide range of national currencies. For your own safety, it’s necessary to research all the information about the sellers before purchasing bitcoin.
You can pay for them in numerous ways too. Right from credit to cash or debit cards to wire transfers, or even with other cryptocurrencies, you can pay with them all but that depends on where you live and who you’re buying them from. Localbitcoin fees are considerably low compared with other exchanges and are only 1% of any operation made by the seller.
How to Store bitcoin?
Before you do anything, you have to set up a wallet. No matter what your means of purchase is, you’re still going to need one to store your digital coins.
It could be an online wallet (hot wallet) that is a part of an exchange platform, or a desktop wallet, a mobile wallet or even an offline one (cold wallet) for that matter i.e. a hardware device or a paper wallet. But even from these wallets, there is a wide variety to choose from. So do some research before deciding on which version suits your needs the best.
These wallets are generally safe but it all depends on the version and format that you’ve chosen and how you go about using it.
The least secure wallet is the online wallet since your keys (which are basically what you require to gain access to your account or make any transactions) are held by a third party. It also happens to be the easiest to set up and use, thus presenting you with a choice that’s all-too-familiar: convenience vs safety.
What is next?
The next step you’ll have to do is open an account at cryptocurrency exchange. There are hundreds of cryptocurrency exchanges operating currently. They buy and sell your bitcoin on your behalf. Just like the wallets these too will require research on your end. You may be lucky and have some reputable exchanges to choose from or you may even be limited to one or two based on your geographical area.
The largest Bitcoin exchange as of now in terms of US$ is Bitfinex which is actually aimed at spot trading. Some of the other high volume exchanges are Bitstamp, Coinbase, and Poloniex. My favorite cryptocurrency exchanges that I use for trading are Kraken, Bittrex, and Binance.
Most exchanges accept payment via bank transfer or credit card, and some are even willing to work with Paypal transfers. They charge fees which in most cases include the fees for using the Bitcoin network. So, after the exchange receives payment from you, the corresponding amount of Bitcoin will be purchased on your behalf.
It will deposit them in an automatically generated wallet on the exchange. This can take varying amount of time from minutes to hours. You can keep these bitcoin there or simply transfer them to your other (much safer) wallet.
How to Sell bitcoin?
Are you trying to opt out of the whole Bitcoin frenzy? Not up for the risks that come with it anymore? Or maybe just sell it because you gained a profit and need to cash it? Well, let’s brake it down into a couple of easy steps.
Sign up for a cryptocurrency exchange platform. Whichever one you choose, the process for selling your bitcoin on each of their platforms is much the same. Create an account and a wallet with the exchange platform that you’ve chosen and link your bank account with it, or in some cases a local currency wallet.
Next send your bitcoin there just as you would while conducting a transaction with just any other person. From the exchange wallet, you take your deposit address wallet and you send the bitcoin you want to sell to it.
• Place a sell order
While placing the sell order, just enter the amount of Bitcoin you’d like in cash and choose a method of payment. You’ll be provided with a wallet address and a QR code to which you can transfer the coins.
• Send Bitcoin
There are exchanges that let you set a limit on your sale, so if the coin’s price were to drop below a particular point the sale would not go through. After the sale has been completed, the funds will be transferred to your linked bank account in the relevant currency or to your exchange currency account. You can then withdraw it from there whenever it is convenient for you.
Don’t forget to declare any profit you make on the sale to your relevant tax authority!
How to transfer bitcoin?
Now, sending bitcoin to another wallet or user varies from each exchange platform. Each platform has a different set of instructions but each of them is not very different. Since Coinbase happens to be one of the more popular ones, given below are the ways through which you can transfer bitcoin using their platform. Also, the set of instructions will vary for Android and iOS users.
These are the set of instructions if you’re just using the web.
- Go to the Accounts link on the main navigation bar
- Click the Send button for the digital currency wallet that you’d like to send from
- On the send dialog, select Wallet Address if you’re sending to a digital currency wallet external to Coinbase or Email Address if you’re sending via email
- Enter the amount of digital currency you’d like to send in the Amount field. Alternatively, you can specify the amount you would like to send in your local currency. Note that the funds will always be sent as digital currency, not your local currency
- Click Continue
- Confirm the details of the transaction and complete the send
How and where to spend bitcoin?
In the beginning, there was pizza and that was all you could buy with bitcoin! Literally! But now, you can spend your Bitcoin on much more than pizza, in a wide variety of places, both online and offline that you are literally spoilt for choice. We hope to point you in in the right direction and shows you the diversity of options available.
Right from tipping to gift cards, paying for dinner to shopping, paying for your flights, furniture gold all of this is now possible. Even some musicians allow you to buy their albums using bitcoin! You can pay for school or college or even download movies and games using Bitcoin. The list is endless. There are a few legal and accounting firms that accept bitcoin as payments too. The UK based trading platform Etoro has signed recently an advertising deal with seven Premier League football clubs paid in Bitcoin for the first time.
bitcoin are a valuable asset, some even calling it ‘the new gold’. That’s because only 21 million of them will ever come into the world—and most of them are already here. The ones familiar with Bitcoin probably know that the number of coins created by the mining process drops by half every four years, thereby increasing the demand and scarcity even more. Especially, since it was rumoured that central banks are planning to use them as foreign currency reserves. Just be careful if you do decide to buy. Play safe and don’t risk money you can’t afford to lose.