A Step-by-step Guide to Buying Bitcoin
Yesterday I pointed out two of the most direct ways in which it’s easy to get scammed in crypto. And the solution to avoiding these scammers is simple; just do it yourself.
That’s the best way to avoid the rip-off merchants.
Now in years gone by it has been pretty difficult to get bitcoin. When I first got involved in it all in 2010 and 2011, it was really hard. Prohibitively hard, for many.
But over the years it’s developed in a way where it’s not as hard anymore. This tells us the space is maturing fast, but also that we’re knocking on the door for real widespread mass adoption. And that, for us, is another catalyst as to why we believe every investor should consider holding some bitcoin in their portfolio.
But if you want to get it, how do you get it?
Read on and find out…
How to get started with bitcoin
The best way to get started with bitcoin is to just buy it outright yourself. Then store it in a secure wallet which you control access to. Today, that process is really just like downloading an online banking app to access your accounts.
Crypto is designed so you can do it yourself. And you should. If you want to take that first step and for example start with buying $100 of bitcoin, then that’s what you should do. Today we’ll cover how to do it easily and simply.
Note: this isn’t the only way to get bitcoin. This is the way I use because for me, it’s fast and easy. And in a world where bitcoin’s price can skyrocket $1,000 now in the space of minutes, you want things to be fast and easy.
Step 1. Go set up an account with Coinbase. The website is www.coinbase.com
Step 2. Get started by setting up an account and providing the requested details.
Step 3. Verify your ID and set up a payment method.
Step 4. There’s also a mobile application for Coinbase. Download that and you can do this all on your smartphone.
Step 5. Buy bitcoin through your Coinbase account.
That’s it. That’s all you need to do to get bitcoin.
Now this does put your bitcoin in a wallet that is effectively controlled and secured by Coinbase, if you decide to use that system. However there’s a saying in crypto, ‘not your keys, not your crypto’.
That means if you don’t control the private keys to your wallet, then in theory whoever does could simply take your crypto.
I know this is the case because in 2014 the world’s largest bitcoin exchange, Mt.Gox, closed down without notice. Before this time there had been situations of the exchange locking people out of their account and freezing funds. There were also reports of weird and unauthorised trading in accounts.
I had several issues with frozen funds and withdrawal requests that were sat pending for weeks in May 2013. That should have been a warning sign then that things weren’t all kosher at Mt.Gox.
Luckily I got most of my BTC moved off Mt.Gox — yep that’s right, I said ‘most’.
I ended up with around 0.11 BTC remaining in my Mt.Gox account.
When the exchange failed due to a massive hack and theft of funds, my BTC, along with everyone else’s, just vanished. I wasn’t affected too badly. But 0.11 BTC today is still worth around $1,980. Not exactly chump change.
Now we’re not saying Coinbase is about to ‘do a Mt.Gox’. But crypto exchanges fail, and we’ve seen several over the years disappear.
That means our view has always been to apply the best security practices. Once you’ve bought something like bitcoin, it’s a good idea to transfer it into a wallet which you hold the secret seed for, and which you control.
This might seem daunting at first, but it’s actually quite simple and empowering once you’ve done it the first time.
There are a couple ways to set up a wallet which you control. We suggest the best way is to buy a little device known as a hardware wallet. Two companies, Ledger and Trezor, make the most popular hardware wallets on the market.
They typically need a computer or smartphone to open their interface. But when you do get one of these little devices (a Ledger for example costs about $110 from their official site) you can set up your own bitcoin wallet (and wallets for other crypto) and then send your bitcoin from your Coinbase account to your Ledger wallet.
Again, this might be a little daunting for first time users. But then again, the first time you used Android Pay or Apple Pay, it was probably a little daunting too.
Once you’ve got your first buy, transfer and storage on a hardware wallet under your belt, you’ll be more comfortable doing it again.
Of course if you’re still not 100% comfortable with that level of responsibility, you can always chance it and just leave your crypto in your Coinbase wallet. That’s not something we suggest long-term, though.
But that’s it. These are all the things you need to do to get a little crypto and not get ripped off by scammers.
Once you’ve got it, just sit on it for a while. Or buy more periodically. Do whatever you want, what you’re comfortable doing.
The point here is that if you want to get into bitcoin for the reasons we’ve pointed out last week, then we say just do it and stop procrastinating. Every day of inaction could cost you a slice of upside.
Start small…but at least start. It’s not hard, not anymore.
Of course there are other things to consider when getting into crypto. And once you get a taste of it, there’s a good chance you’ll want more. That’s why I started my entry level crypto advisory, Sam Volkering’s Secret Crypto Network. It’s also why in 2016 I started writing the first edition of my book, Crypto Revolution: Bitcoin, Cryptocurrency and the Future of Money.
But like I point out above, if you can’t wait and just want a slice of this action, then consider setting up a Coinbase account. It’s not the only way to buy bitcoin, but for me, it’s the easiest and fastest. And it’s what I use.
Good luck with your crypto adventure. Even if it’s just to dip your toe in slightly to start with. I think it’s the most exciting, revolutionary development to finance and money that we’ve ever seen, and I can’t wait to see how the future pans out for it, and for those who’ve decided to get in on the action.
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