How To Buy Bitcoins – Everything You Need To Know
How To Buy Bitcoins – Everything You Need To Know
I will briefly describe How To Buy Bitcoins The prices of bitcoin skyrocketed in late 2017 and first quarter of 2018. Although the prices of the cryptocurrency have downed again still it has the charm for investors to invest. Therefore many people tend to know how to buy bitcoins. Bitcoins are considered as the currency of future. But due to sudden fluctuations in its rate, this currency is very uncertain.
It started from $1000 per bitcoin to almost $14000 per coin within months. That shows the potential of the investment.
In this article, I will tell you how to buy bitcoins with cash, PayPal or even by credit card. First of all, you should know what bitcoin actually is and how its technology works.
What is bitcoin
Bitcoin an online cryptocurrency. It does not have any solid or materialized shape. Therefore it is also called as volatile currency. It is created by series of calculations done by computer power. Bitcoin is also a decentralized currency, which means it is not governed by any of the body or department. These characteristics make bitcoin more vulnerable to the investors.
You can buy every type of goods like pizza, car or even software online by bitcoin. It is considered a commodity and can be traded also. No central authority controls bitcoin. Due to its peer-to-peer technology bitcoin is much different than regular currency. Bitcoin actually works on block-chain technology.
What is blockchain
The blockchain is the state of the art technology working behind every online cryptocurrency. You may consider blockchain as a public ledger. Like a public ledger is used to record the public transactions. Every transaction is stored in the public ledger for everyone to see. Same is the case with the blockchain. The blockchain is an online version of public ledger. It is the primary mechanism used in various financial systems from all around the world. In fact, blockchain is the backbone of cryptography.
What is cryptography
The new question is being arisen from every question. But let assure you guys that you should have a handsome knowledge of all the technology working behind the bitcoins before you buy. It will give you a firm grip over the coins you have and will assist you to take decisions of buying and selling wisely.
Back to cryptography. Cryptography is a digital technique to make transactions secure. It does not matter where the people are living who are making transactions online around the world. Cryptography creates a shell to encrypt the cryptocurrency.
What is rest of the bitcoin
Bitcoin was invented back in 2009. It is the oldest cryptocurrency. Many cryptocurrencies evolved and merged after the invention of bitcoin. But bitcoin still dominates the online currency. There are many other cryptocurrencies working around like Ehtrium, Ripple etc. but no one can compete the bitcoin.
What is the unit of bitcoin
A single bitcoin has a market value of thousands of dollars. The value may vary with the passage of the time but it is being precious day by day. A bitcoin is one unit of this cryptocurrency. But due to high value, small fractions like a penny of the dollar are also used to denote bitcoin. The smallest fraction of bitcoin is called Satoshi. It is 1000th part of the main unit.
How bitcoins are generated
As I stated earlier, blockchain technology works behind the bitcoin and all other cryptocurrencies. But blockchain is only the way to record the transactions in a sequence. The process that actually works to generate bitcoins is called mining.
What is mining
Mining is a computational process to verify the transactions recorded by blockchain. It involves the solution of some mathematical problems varying at different levels of difficulty. Mining also ensures that these solutions are done on a regulated basis.
You may think that mining creates solutions. Every solution creates a block. The series of blocks is blockchain. These blocks cannot be moved once they are created and added to the network. It is impossible to make an alteration after the adjustment.
How many bitcoins have been made
Maximum six blocked can be made in one hour. As the times passes, it becomes more and more difficult to generate bitcoins. Actually, the creator or creators (whoever knows?) have structured the system to work under limits. Every year the bitcoin generated are almost half from that of the generated last year.
A cap of 21 million bitcoin has been set already. It means that maximum 21 million bitcoins can be generated. So far 16.7 million coins have been generated as of December 2017.
What is the current value of bitcoin
The price of bitcoin varies at daily basis. As these lines are being written, the price of one bitcoin or BTC is $7070 per bitcoin. BTC is the unit of one bitcoin.
Where to but the bitcoins
Here comes the actual answer to the question asked by most of you people. Where, How to buy the bitcoins?
The answer is, you can buy bitcoins directly from the people who have the coins. But beware of the scammer’s guys. There are hundreds of thousands of the people who lie about the coins and making frauds. Instead, you should try to buy coins from online exchanges of bitcoins. There are many exchanges working online and selling the bitcoins at a defined rate. These exchanges include coinbase, bitsamp, kraken, and gatehub etc.
What is a most reliable exchange of bitcoin
Coinbase is considered as biggest US cryptocurrency exchange. If you are a beginner, definitely you should start from coinbase. It is most reliable exchange out there and provides relevant software and hardware like wallet etc also.
What is a wallet
Like any other paper currency, bitcoin also needs a wallet to store the coins. This is actually a software. A wallet contains a 256 bits private key. Every user has its unique private key. This key gives the user an access to his coins. A wallet key works for every marketplace or exchange. It allows you make transactions anonymously.
There are different kinds of wallets i.e hardware wallets and software wallets. Hardware wallets are like a flash drive stick and only can be purchased from specific exchanges. The software wallets are like apps which we use to complete our normal bank transactions,
How to get a wallet
The software wallets are very easy to get. As I wrote earlier, these are apps. You can download them from the concerned app store on your device. Many companies are offering different wallets. I will advise you to get a wallet of the exchange from where you want to buy coins. Being a beginner I would recommend you to chose the wallet of coinbase. There are some other popular wallets like mycelium, Electrum etc.
Now once you have a thorough knowledge of bitcoins and know how to get a wallet. Here are the actual steps you should take to buy bitcoins. Follow these steps one by one:
Setup your wallet
The easiest way to create your wallet is to chose a third part wallet providing company like coinbase etc. you can go to blockchain.info website. Create an account. Provide your details like email, name etc. and last but not least signup to your account.
Download wallet app
As I wrote earlier that software wallets are available in the apps store. It depends which type of the wallet you have chosen. You should have to download the same kind of app. Wallets apps are available on both Apple store of iOS devices and Google play store of Android devices. There are some wallets, specially designed for the desktop computers. You should download the one accordingly.
Create an account on the exchange
Now visit the exchange you have chosen How to buy bitcoins. Again, you may select different than coinbase. There are many exchanges working our there like Poloniex, Kraken, Bitfinax, Bitpanda, Bitstamp, and CEX.io etc. it’s your choice of which exchange you choose to buy bitcoins. Every exchange has its pros and cons. You should have to provide your email, name and some other details during the account signup. Some exchanges may require your Bank Account details to charge the substitute amount of bitcoins.
There are some apps who work as both exchange and wallets. Remember it is not necessary to have the wallet of same exchange from where you want to buy coins. You may use a different wallet rather than the exchange.
How To Buy Bitcoins
Now you can know How To Buy Bitcoins. Go to the “Buy” section of the exchange. Select how many coins you want to buy. You can Purchase as more coins as you like. You can buy infraction. Depending on your budget, you can minimum buy a Satoshi which is 0.0000001 of BTC.
To buy the required bitcoins you should have to submit your account details from where the exchange may deduct the required amount. You will get a private key in return for your wallet. Import the key to your wallet and here it goes. You are the owner of bitcoins now.
The more you spend the money, the more you will get the coins. My last advice is if you want to buy a huge amount of bitcoins than try to use hardware wallet. It is safer than online software wallets.