Bitcoin has been around for a decade now but they are still a technological complexity which many people fail to understand. Most people want to know the arious options of buying bitcoin and several of them get into an analysis paralysis of sorts which prevents them from proceeding. Many people have even had their bitcoin stolen while several have got scammed during the process as well. So today we will be looking at ways to buy bitcoin safely and without getting scammed.
1. Acquire a bitcoin wallet (it’s free!)
Bitcoin wallets are nothing but a place to store the bitcoins. This step itself can be very complicated as there are well over 20 different bitcoin wallets so you need to know which type to purchase. In a sense, wallets are nothing but a software tool or website where you can ‘store’ your crypto-currency. You can choose from independent, multiple-user or third party wallets. Likewise you can choose between paper or physical wallets. The choice of wallets can be pretty overwhelming but note that you can change the wallet anytime you wish. The choice of your wallet also depends on other factors such as whether you are going to need access to the wallet on your mobile, or whether you will be a heavy user of bitcoins. Some reliable bitcoin wallets to subscribe to are Trezor, CoinBase, Coin Mama and BlockChain. A wallet basically is a public key-you need not hide it. You can also download a wallet.
2. Choose a payment method
The key in selecting the right payment method for buying bitcoins lies in understanding about charge-backs. Charge backs are the guarantee given by transaction websites like PayPal to buyers who claim that they did not receive their commodity, in this case bitcoins. Understand that when it comes to crypto currency, you do not have a physical commodity. This means that as a buyer, you might pay for one via PayPal, get the coin and then, after a few days, complain to PayPal that you never received the coin. PayPal will have no means of verifying this for a fact. Thus, this exchange of currency is fraught with risks. Today there are different methods of buying bitcoins with credit or debit cards, PayPal and Skrill and also via wire transfers. Note that most sellers prefer selling bitcoins through wire transfer. The upside to using wire transfer is that many exchanges sell bitcoins for a lot less this way than that on PayPal. However, the downside to this method of purchasing bitcoins is that you’d have to wait longer for the coins to come through. You can also buy bitcoins with cash. This is a quickest and cheapest way to buy bitcoins. There are some sites which allow nearby buyers and sellers to come face to face. This method however requires you to physically meet a stranger. So always be very careful when using this method of buying bitcoins.
3. Tips to buy bitcoins with PayPal
- Go through VirWox or virtual world exchange. They indirectly let you buy bitcoins by first buying Second Life Linden Dollars which is a virtual currency.
- Open a Circle account. You can also use PayPal debit MasterCard. Connect Circle and PayPal accounts.
- Buy bitcoins using Local Bitcoins.
4. Choose an exchange
There are various exchanges where you can buy your bitcoin. You can choose from Trading Platforms, Brokers, or Non Executable exchange. Always read reviews of the exchanges before you select. You can easily do so using search engines. Make sure you read the About Us page of that exchange. It is a good idea to go with an exchange that enlists its team members. If possible, check out the exchange’s rank using Alexa-the lower the rank, the better. Also find out how much fees these exchanges charge, processing time and withdrawal time.
5. Use Bitcoin Forums to learn
Bitcoin forums are a great place to ask questions, raise doubts and concerns. Many members of these forums help guide newbies in this matter. Bitcoin Talk is a great forum for this purpose.
6. Mine bitcoins
Bitcoin mining allows you to generate bitcons without having to buy them. Any computer can be used to mine coins. This is a very technical process-so read up a bit about it. There are some technical terms you should learn. Also, you need a computer with internet access and Java installed. Once you have this, go to this website. Create an account here. Go to tools- and get latest updates. This will download files to your computers so you can start mining bitcoins. Once downloaded, follow the simple instructions. The program will run smoothly on any operating system. However, this method of mining bitcoins is very slow and can overheat or damage your device. For speeding up things, you can invest in ASIC bit coin miners that are ultra powerful processors specifically for mining purpose.
7. Start small
If you are planning to buy bitcoins using credit card, use Coinbase or CoinMama. These websites are intuitive and easy to use. You can also use Circle – another popular and easy to use startup that allows buying bitcoins with ease. Always start small.
Never hack and steal bitcoins
This is an unethical way of acquiring bitcoins. As a buyer you need to be aware that hackers can use this method to steal your bitcoins. They resort to clone websites, mobile apps, Wi-Fi hacking, and phishing to acquire your bitcoins. The bottom line: you do not want to acquire bitcoins in this manner nor would you want to lose your hard earned coins to hackers who use these tactics. So make sure you follow security rules, and not fall prey to them by downloading funky software. Protect your device using PIN or touch or face IDs to prevent downloading some stuff on it.
To summarize
- Always check the credibility of your bitcoin seller
- Document everything
- When dealing with sellers/individuals, wait for confirmation before paying.
- Use escrow or third party services
- If you use an exchange, never leave your money there. Move it to your private wallet as soon as possible.
This brief guide will probably not answer all of your questions about bitcoins, but it will prepare you for the journey to the digital world.