A Simple Guide to Buying Bitcoin

A Simple Guide to Buying Bitcoin
Finance

Bitcoin is one of the most popular cryptocurrencies in the world right now, and buying it has never been easier. However, there are still some things you need to consider, like where is the best place to purchase it. Here is a simple guide on how to buy BTC and the best platforms to do so.

Before You Buy Bitcoin, Here Is What You Must Consider

Buying Bitcoin doesn't include only searching for the best platforms to invest in. Before you decide which platform is best, you need to know what those platforms offer and how they will affect your trade. For starters, you need to consider what kind of payment methods each platform offers because paying with a credit card will have a different fee than with a bank wire. Different platforms also have different transactions, deposits, withdrawals, and network fees.    

There Are Different Types of Exchanges

Another thing you need to consider when picking the right platform is what kind of trade you want to do. There are three types of crypto exchanges: centralized, decentralized, and hybrid. Aside from the type of the exchange, you need to consider what kind of trade that platform offers. There are peer-to-peer trading platforms, classic exchange processes, and trading through brokers. So, what are the main differences between different types of exchanges? Let's find out.

Centralized Exchange or CEX  

Some of the top ten platforms are, in fact, centralized exchanges or CEXs. This type of exchange is commonly used across the world and governed by a company that offers crypto-to-crypto and fiat-to-crypto trading. On this exchange, the company acts as an intermediary or a broker between buyers and sellers of the crypto coins and charges the commissions and transaction fees for this service. On CEX, users can easily navigate the crypto market and invest in BTC for as little as $10. Here are the most popular CEX for trading BTC:

  • Binance,
  • Coinbase,
  • Kraken,
  • Gemini.

Decentralized Exchanges or DEX

As opposed to CEX, decentralized exchanges are not governed by any company. Instead, transaction fees and commissions are controlled by an automated process. These trades are considered to be peer-to-peer. Meaning you are buying BTC directly from another user. Most platforms use the Ethereum blockchain so it can provide users services and the possibility to trade by using smart contracts. However, even though these platforms are considered to be safer from hacker attacks, they do not offer high trade volumes or fiat to crypto options. Here are the most popular DEX:

Hybrid Exchanges or HEX

Hybrid exchanges simply use CEX and DEX options, offering users the best from both platforms. It is a combination of fast transactions offered by CEX and the security of DEX. Another great advantage of HEX is that there are no taker and gas fees. HEX is still under development but is promising exchanges to use in the future. Here are the most popular HEX:

  • Nash,
  • Qurrex.

You Need to Pick the Right Wallet to Store Your BTC

Even though most CEX do offer custodial wallets to their user, there is no harm from opening your own wallet as well. You will also need a wallet if you plan to use DEX. There are, in essence, two types of wallets - hot and cold. A hot wallet is an online wallet you add on your brewers as an extension or on your phone as an app. The most popular hot wallets are Metamask and Trust Wallet.

The cold wallets come in the form of a device such as a USB or hard drive. These wallets are completely offline, and here you can physically store your BTC. Since it is offline, it is the safest option for you to store your BItcoin. The most popular cold wallets are Ledger and Trezor.

Choose the Payment Method

Last but not least, when buying BTC, you need to consider the payment options that platforms allow. As you can see, some platforms only allow crypto-to-crypto trading. Although most CEX offers fiat to crypto exchange, you will have different options here as well. For example, if you are buying BTC from the UK, you would want a platform that allows you to trade GBP to BTC. Also, credit and debit card payments are done instantly but usually come with a larger fee.

So if you wish to save money on the fees, the best would be to use bank wire transfers, but this could last 1-5 business days depending on your location and the platform you are using. Here are the payments options most of the platforms offer:

  • Credit or debit card,
  • Bank Wire transfers,
  • Faster payments,
  • ACH transfers,
  • Digital wallets.

A Quick Guide on How to Buy BTC

Now that you have a base and you have chosen the platform and wallet to store your BTC, it is time to learn how to buy a BTC. No matter if you choose DEX, CEX, or HEX, the process should be similar and simple. You will need to prepare some sort of identification document because some platforms may ask for identity verification. Here is a step-by-step guide on how to buy BTC:

  • Step 1 - Go on the platform and create an account,
  • Step 2 - Finish the verification,
  • Step 3 - Deposit money into your account,
  • Step 4 - Search for BTC on the market,
  • Step 5 - Enter the amount of money you wish to invest,
  • Step 6 - Choose a payment method,
  • Step 7 - Click on buy and confirm the transaction.

How to Choose the Best Platforms to Buy Bitcoin

Even though looking at the fees, trading options, and payment methods are important things you need to know before you choose a platform, there are other features you need to consider. For example, some platforms offer no commission when you make a deposit or have excellent learning tools for beginners in crypto trading. Some exchanges have more coins you can trade, while others offer to trade with other securities, stocks, and ETFs.

When looking for a platform for you, it is important to find one with an interface that is user-friendly and available on the phone if possible. Having an app option is important if you plan to do day trading and wish to stay updated on the current market situation all the time. Here are the overall best platforms to buy BTC:

  • eToro - Is best for beginners,
  • Binance - has the lowest transaction fees,
  • Coinbase - Is the most popular one,
  • Coinmama - Have the highest  limits for buying bitcoins with a credit card,
  • Bitpanda - Have the lowest credit card fees,
  • CoinJar - Good for first-time buyers.

Is It Good to Invest in BCT

Bitcoin is one of the biggest reasons why we talk about crypto trading today. While BTC increased in value by 7,000% and is the most popular crypto coin in the world nowadays, investing in crypto is a risk, just like investing in stocks. Our globalized economy is so complex that many factors can influence the price of the coin to go up or down.

One thing is for sure - even though the BTC price is down now, there is a high chance it will go up again. If anything, the best decision would be to invest now when the price is down. Still, there are no guarantees in the crypto world, and this decision shouldn't be made lightly. It would be good to do good research about the current crypto market before you take any further steps.

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