Buying Bitcoin can be a little daunting for anyone who is not a computer programmer, or involved in the world of cryptography so we are going to guide you through how to buy your first bitcoin.
The problem is that not much information exists to explain each step for beginners. We feel that there should be a straightforward guide available for people looking to purchase bitcoin using standard payment methods like debit card, credit card or bank transfer.
We’re going to guide you through the process of buying and looking after your first ever Bitcoin. There are hundreds of ways to purchase and store bitcoin, but in this article we’ll show you what we consider to be one of the easiest ways to do it.
First Step In Buying Your First Bitcoin
Buying and storing your first Bitcoin is possible in a very wide variety of ways. In fact there are dozens of ways to buy cryptocurrencies: you can buy direct from friends or family, you can use a local merchant service like LocalBitcoins, or you can sign up to a cryptocurrency exchange and this is what we would recommend.
Buying From A Cryptocurrency Exchange
Cryptocurrency exchanges are the services you can use to purchase Bitcoin with a debit or credit card, or transfer from your bank account. Like any other currency exchange, Bitcoin exchanges buy and sell cryptocurrencies (in exchange for fiat money like £ or $) in order to turn a profit.
Bitcoin exchanges are pretty similar to a service like PayPal. You can deposit from your credit or debit card, you can store money online, and you can make online payments.
If you do a quick Google search for “cryptocurrency exchange”, you’ll see there are dozens (if not hundreds!) of cryptocurrency exchanges ready to take your money. While there are a good number of scams to watch out for, there’s also a surprising number of legitimate exchanges that will show you how to buy your first bitcoin
It’s up to you to choose your cryptocurrency exchange, but today we’ll walk you through the steps of using Coinbase — without a doubt, the cryptocurrency space’s most reputable and easy to use fiat on-ramp. Fiat on-ramp just means a place where you exchange pounds, euros, or dollars for bitcoin, or other cryptocurrencies.
How to Buy Your Bitcoin
Coinbase is actually really easy to use. Simply sign up for an account with your email address and you can start buying with credit or debit card right away. Since Coinbase is a regulatory-compliant exchange, you might also have to complete some basic KYC (Know Your Customer steps), like inputting your address. This is just the same process you would go through to open a normal bank account.
The Three Essential Bitcoin Buying Steps
- Sign up to the exchange. If you’ve never used an exchange before, you’ll have to sign up. Navigate to your exchange of choice, press the “Sign up” (or equivalent) button, and follow the steps provided. Most exchanges will just need your name, email address, and a password to start with.
- Connect your credit card. Next up, you’ll need to add your credit or debit card as a payment method. For this, find your “Account” or “Settings” page and press the “Payment Methods” (or equivalent) button. Click to add a new debit/credit card and enter your details.
- Purchase your Bitcoin! With any luck, your card will already be set up. Make your way to the “Buy” page and purchase away at the exchange’s rate.
Here are the steps for Coinbase in particular:
Buying Bitcoin at Coinbase with a Credit/Debit Card
- Sign up at Coinbase
Navigate to https://www.coinbase.com/ and press the “Sign Up” button at the top right corner. Fill in your details and verify your email address.
- You’ll need to verify your phone number
You’ll then receive an email from Coinbase asking you to verify your phone number. Click the link in the email and enter your phone number. Finally, grab your phone, wait for an SMS verification code, and enter it on the Coinbase website.
- Then add your payment method
Head to the Coinbase dashboard and click the button labelled “Buy/Sell” (top left corner). Press “Verify Payment Method”, and then press “Add Payment Method” on the page you are taken to. Now click “Credit/Debit Card (3D-Secure)”.
- Verify your ID.
Choose an ID type (passport, driver’s license, or other photo ID) which you are able to verify. Use the Coinbase interface to take a photo of the front and back of your ID, using your webcam.
- Connect your credit card.
On the next page, enter the details of your credit or debit card and proceed back to the dashboard.
- Purchase your Bitcoin!
Press the “Buy/Sell” button to buy your Bitcoin as and when you please, using your card. Watch out though, there are purchase limits that you might have to lift with more verification and/or a good trading history!
If you want to buy large amounts, Coinbase asks you to verify your identity through a range of methods. The most popular is to take a photo of your ID document, like a passport. Thankfully, the Coinbase system works really well for this approval process — it’s literally taken me minutes before.
Please note if you use our referral link below:
then you can get an extra $10 (£8) when buy $100 (£80) or more of bitcoin.
Storing Your First Bitcoin
Don’t forget that big part of cryptocurrency ownership is the storage aspect, and that’s what we’re going to cover in the next chapter.
Where to Store Your Cryptocurrency
Storing cryptocurrencies like Bitcoin is a bit different from storing regular fiat currencies. You can store cryptocurrencies on almost any electronic device — your laptop, desktop, mobile phone, or even tablet — as well as with a handful of alternative methods, like storing them on an online portal or even on a piece of paper.
The basics of storing cryptocurrencies is that you have to protect a secret, password-like string of numbers and letters called your private key. Your private key is what gives you access to the cryptocurrencies you claim to own. If you lose it, you lose access to your cryptos, and if someone else finds it, they gain access to your cryptos.
Cryptocurrency wallets are designed to make your private key storage a safe and smooth experience. The easiest cryptocurrency wallets to use are online wallets — and in fact, Coinbase has a built-in online wallet so you can keep your bitcoin on there if it is not a large amount.
However, it’s advised that you do move your cryptocurrencies off of whatever exchange you purchased them from, so that you have complete access to them. The best places to store your cryptocurrencies are on your computer, with a verified wallet like Bitcoin Core, on your mobile phone, or on a hardware wallet — a specialist device for storing cryptocurrencies. For now, let’s look at the first of those three options.
Best Bitcoin Desktop Wallets
Desktop wallets are programs that store and manage the private key for your Bitcoins on your computer’s hard drive.
By design, desktop wallets are more secure than mobile wallets (since they’re harder to steal) and less secure than hardware wallets. If you’re new to the world of Bitcoin and wallets.
Desktop wallets are considered “hot wallets”, since they are connected to the Internet. This makes them inherently insecure. However, for small amounts of bitcoin, they are a good solution.
For large amounts of bitcoin we recommend ALWAYS using cold storage wallets (i.e. wallets that aren’t connected to the Internet) like a paper wallet or hardware wallet.
There’s a wide variety of Bitcoin desktop wallets around, each one has different advantages and these are our 3 favourites:
For beginner’s the best wallet would probably be Exodus: https://www.exodus.io/
The wallet with most security options would be Armory: https://www.bitcoinarmory.com/
However, the overall winner in all categories is Electrum: https://electrum.org/#home
That’s it — you’re done! You’ve successfully purchased and stored your first Bitcoin ever. From here, it’ll only get easier, and you can experiment with new exchanges and wallets to decrease costs and improve security.
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