Interested in learning how to buy bitcoin? The most popular cryptocurrency is now accepted around the world and has a growing number of applications — but you need to know where to go to purchase and store it.
Let’s walk through how to set up a bitcoin account and make your first purchase!
Step 1: Find a good bitcoin wallet
Specific digital wallets are used to store bitcoin until you are ready to spend them or exchange them for another currency. Wallets range in terms of features, platforms they can be used on, and security, so it’s important to choose one that works for you.
When you find a wallet that checks off all your important features, download it to the appropriate platform. For beginners, we recommend starting off with a simple wallet that makes transfers easy. These wallets can be downloaded for free, but fees may apply to currency exchanges when moving money to other accounts.
Here are a few good options:
Coinbase wallet comes with a friendly wallet that ties directly into its exchange services and is simple to use, making it one of the most popular American Bitcoin wallets. When you sign up, you get a certain amount of insurance for the bitcoin you store, and you can go online from any device to check up on your amounts or make a change.
Mycelium is a popular mobile wallet known for being compatible with more advanced tech, like Trezor hardware wallets (for maximum security) and Tor.
Electrum is primarily to be used on desktop computers, and provides you with your own encryption key for security. If you plan on storing a large amount of bitcoin online and want one of the safer options, it’s worth a look.
Note: Although an online wallet is fine for your first bitcoin purchase, if you find yourself with a lot of valuable cryptocurrency because of trading or an upswing in value, make sure to store it in an offline “cold storage” wallet for maximum protection.
Step 2: Choose the right bitcoin trader
If you want to know how to buy bitcoin without a broker, the easiest way is to use an exchange. There are a whole lot of exchanges out there, with varying performance. Some are untrustworthy and others are very limited, so it’s important to pick the right exchange to start with. When comparing exchanges, remember to look at the fees charged for buying bitcoin and what payment methods are offered. Few exchanges will offer to turn bitcoin directly into cash for you, but here are a few to try out:
Coinbase is the most obvious suggestion for people buying their first bitcoin. It’s very simple to use, has a great interface, and shows consistently high quality when it comes to taking care of customers — without pushing fees too high. It’s also available on both desktop and mobile devices. We highly suggest you start here if you’re not sure where to go.
CEX offers even more simplicity for those who are a bit more used to exchanges in general. It gives you immediate exchange rates and basic buy/sell options without any hoops to jump through. However, its payment options are a bit limited.
Bitcoin exchange search is own exchange search. Put in your country, and you can take a look at available exchanges, as well as check out the current “featured exchange.” It’s a good option to investigate more choices, but remember to check reviews and history before choosing any particular exchange.
If you would rather take a more direct route in buying bitcoin, you can opt to use a peer to peer service, such as LocalBitcoin or BitQuick. They offer a wider array of payment options and let you purchase bitcoin directly from a seller without the exchange middle man. That said, make sure to be safe if you plan to do a trade for cash in person.
Step 3: Select your payment method
Exchanges accept a variety of payment options based on what they are willing to use. This is sort of a sore point for many exchanges, since some payment methods have been used to scam sellers for a quick buck in the past. Bank account and credit card transfers are typically accepted by most exchanges, with some limitations. Wire transfers are a bit more hit or miss, and PayPal transfers may not be allowed. Coinbase, however, allows for all these payment methods, which is it remains an easy recommendation for beginners.
Note: bitcoin ATMs allow you to exchange bitcoin in compatible wallets for cash. These ATMs are available in a limited number of cities, but do provide an alternative to withdrawing money using an exchange. Again, most exchanges and online wallets will not deal directly with cash.
Step 4: Buy some bitcoin and store them in your wallet
You will notice that exchanges provide you with information on how many Bitcoin you can buy for specific sums of money. However, due to its volatile nature, bitcoin prices can vary dramatically by exchange and from moment to moment — especially lately. That means that even if you have a lot of money to burn, you’ll probably be buying a fraction of a bitcoin — for example, paying $500 for 0.026 bitcoin. That’s where the market is right now, and nothing to worry about as long as you keep an eye on the numbers.
Start small and make your first trade. This will typically store your bitcoin into an automatically generated account on your exchange. You should then seek out the option to transfer these funds to the address of the bitcoin wallet you have created. The exchange may charge for the transfer, especially if you want it expedited.
Important note: bitcoin transfers can be a bit sporadic. Unlike other currency trades, when you buy bitcoin funds. the transaction needs to be recorded in the blockchain and affirmed. This can take time, especially during busy trading hours. It’s not uncommon for a trade to take an hour or two to complete, so you may not want to immediately leap over to your account and start moving funds around.
Step 5: Get ready to use it
Whether you plan to ultimately sell your bitcoin (hopefully at a profit) or use it to purchase something, be ready to do so at a moment’s notice. The way bitcoin value fluctuates it’s important to have your end-game planned our early on. Be prepared by setting up a seller account now, or figure out how to buy what you want with it before you actually plan to. That way when the time comes, you’ll not have a panicked rush while everyone else is trying to do the same.
For a look at where you can spend your bitcoin, here’s a list of compatible online stores. Always read reviews and fine print before making any purchase or exchange with your bitcoin.
Updated on December 18, 2017 by Jon Martindale on the current state of bitcoin.