How to buy bitcoin: a detailed guide for beginners
1. What do I need to buy bitcoin?
2. Where is the best place to buy the first bitcoin?
3. How to buy BTC on a cryptocurrency exchange?
4. How else can I buy bitcoin?
5. What are the advantages of a P2P transaction?
6. What are the fees for buying bitcoin?
- Bitcoin is the most coveted and largest cryptocurrency by capitalization. There are various ways to buy it, but for beginners the most convenient and safe option is the popular and well-known cryptocurrency exchange.
- To buy your first cryptocurrency, you will need a registered account on one of the trading platforms, a cryptocurrency wallet and a bank card or account.
- Now is the best time to understand cryptocurrencies and buy your first bitcoin. If you are a beginner and don’t know where to start, this guide is for you.
What do I need to buy bitcoin?
- First, you must decide where you will store the cryptocurrency. There are two main ways – in a custodial wallet on a trading platform or in your own non-custodial wallet, which only you will have access to.
- Then you need to choose an app to purchase from. For your first transaction, we recommend using a centralized cryptocurrency exchange with high trading volume, such as FTX, Huobi, Binance or Kraken.
- As soon as you sign up for an exchange, you will have your own cryptocurrency wallet in your profile. It’s worth increasing your profile security in advance by setting up two-factor authentication for login and withdrawals, and going through Know Your Customer (KYC) identity verification.
Today, all major exchanges comply with financial laws, so they have implemented KYC. Those who have not passed the procedure are limited in their access to trading and available functions. Although usually the ability to trade a small amount of money is still available. If you are satisfied with the limit set, you don’t have to go through KYC.
For the first transaction, you will also need to fund your account on the exchange with a card or bank transfer. The largest trading platforms support multiple fiat currencies at once.
Where is the best place to buy the first bitcoin?
- Bitcoin is traded almost everywhere: on cryptocurrency exchanges, P2P platforms, online exchanges. In some countries, bitcoins can even be bought through a similar to an ATM – a crypto-machine.
- But the most suitable option for beginners is a centralized cryptocurrency exchange. These platforms provide a large selection of crypto-assets and profile settings, they have tech support and many additional services. An exchange account can be funded in a large number of ways, including by card or bank transfer. The current ranking of the most popular centralized exchanges can be found on the CoinMarketCap website.
- However, centralization is their main drawback. The administration of the site has full access to the accounts of its users, can transfer personal data at the request of law enforcement agencies or freeze the account altogether.
How to buy BTC on a cryptocurrency exchange?
- Let’s take a closer look at the process of buying bitcoin on the example of the centralized platform KuCoin.
- First, you need to register, fill in information about yourself and pass KYC. Without identity confirmation on KuCoin some important functions are not available, for example, you can’t deposit fiat money (in particular, from the card) and withdraw coins over 1 BTC per day.
- The exchange offers P2P exchange service, purchase through third-party services BTC Direct, Banxa and Simplex, and a simplified way to trade – “Fast Trade”. The last option we will use. To do this, you need to select it in the “Buy Cryptocurrency” tab on the top menu.
- You will go to the page with the transaction window. Select in it the fiat currency with which you want to buy bitcoin. KuCoin supports more than 40 national currencies, including hryvnia and ruble. If you pay in hryvnias, you can buy bitcoins with Visa or MasterCard. Enter the amount you want to buy, then click the green button “Buy BTC”. (Buy BTC).
- When the card payment is completed, the cryptocurrency will be credited to your KuCoin account. You can check your balance in the wallet, located in the top right corner of the screen, in the “Main Account” tab. Cryptocurrency can be stored on the exchange, but the safest way is to transfer it to an external address that only you have access to.
How else can I buy bitcoin?
- You can buy and sell cryptocurrency not only on exchanges. The advantage of this method is that prices on the exchange are formed by supply and demand, and outside the exchange, participants can agree on their own terms, transaction volume and price.
- There are various OTC services for trading bitcoin and other crypto-assets: P2P-platforms and exchange sites, offline exchangers and even crypto-machines.
- Physical cryptocurrency exchanges can be found in many countries. They don’t differ much from traditional currency exchanges, except that they exchange cash for digital assets. Each exchanger usually generates a rate for cryptocurrencies based on quotations on the world’s leading exchanges, but may take into account current circumstances, risks, additional costs, and so on in the exchange price.
- The same applies to online exchangers, although some of them may have even better rates than the market average. However, you should use only verified sites; the risk of fraud is quite high. A catalog of exchangers and reviews about them can be found on the website of the Bestchange aggregator.
- You can also use the services of cryptomats. These are special ATM-type terminals that allow you to buy and sell bitcoins and other cryptocurrencies for cash or by card.
- These devices send bitcoins to a cryptocurrency wallet in exchange for fiat. All you have to do is enter money or a card into the ATM and then provide an account number or scan the cryptocurrency wallet’s QR code. Crypto machines charge a fairly hefty fee. The closest BTC machine can be found at Coin ATM Radar.
What are the advantages of a P2P transaction?
- There are many platforms and services on the Internet that allow you to exchange bitcoins directly with each other online. Any user can view and respond to announcements, or post their own after registering.
- P2P services provide protection to all participants in the transaction with their website, feedback system, and escrow accounts. Each user has a rating that other platform members give him or her when making transactions. Consequently, it is worth paying attention to, the higher it is, the more reliable the exchanger is. To make a transaction, both the seller and the buyer must lock in the service, the amount required for the exchange, only then the transaction will be executed.
- Among the largest P2P platforms: LocalBitcoins, Paxful, Binance P2P and others.
What are the fees for buying bitcoin?
- When buying bitcoin on an exchange, each user will face 3 types of commissions: for adding fiat money, for a trade transaction, and for withdrawing BTC to the user’s cryptocurrency wallet.
- For example, the Binance cryptocurrency exchange provides different levels of commissions and trading conditions depending on the amount of funds in the account. The standard commission is 0.1%. There is an opportunity to get an additional discount on commissions if you pay in native coins of the ecosystem called BNB. Other exchanges – OKX (OKB), Huobi (HB), FTX Token (FTT), KuCoin Token (KCS), GateToken (GT), etc. have a similar feature.
- Some P2P venues charge for transactions, but it is usually lower than the standard transaction fee for an exchange. For example, on the Binance P2P marketplace, users who place bids on bitcoin ads pay no fee at all.
- Physical and online exchangers are simple and easy to use, but are far inferior to exchanges in terms of the number of features and are considered the riskiest way to exchange. In addition, they often use a system of hidden commissions: they do not formally charge a fee for exchange and other transactions, but they put their profits in the prices.