INVESTMENT

Step-By-Step: How to Buy Bitcoin on the Internet

WORDS: Ocean Road Magazine Editorial Staff PHOTOGRAPHY Supplied

Bitcoin and altcoins, despite their volatility, have developed into alternative forms of investments and even currencies with which people pay for goods and services. However, there are some things you need to know, including what to consider when picking an exchange, the type of documents you might need, and the payment option available to you. If you are interested in finding the answers, keep reading as we provide a step-by-step guide on how to buy Bitcoin online. Let’s dive right in!

Choose an Exchange

There are many cryptocurrency exchanges, so choosing the right one may take time and effort. However, you need to consider several factors before deciding, including its location and understanding the various types of exchanges available.

The location of a crypto-trading service is important because various countries have different laws and regulations regarding cryptocurrency transactions and exchanges, some of which require personal information.

There are three main types of exchanges: decentralized, centralized, and P2P. A decentralized exchange is one where there is no central authority, and users can transact using smart contracts. A centralized exchange, on the other hand, is maintained by a single authority and is the most popular type of exchange. Platforms under this category also provide additional features to help traders make better financial decisions, such as advanced charting. In P2P exchanges, users disregard the need for any form of intermediaries and trade directly with each other.

You should also ensure that your choice of exchange has a good reputation. Some of the best exchanges include Independent Reserve, Kraken, Coinbase, and crypto.com.

Pick a Payment Option

Different crypto-trading platforms also offer various payment options. While few accept PayPal payments, many renowned exchanges allow you to connect your credit card, debit card, and even bank account.

Also, for many of these exchanges, you’ll be required to provide information such as a state-issued ID scan, your source of income, and a picture of your driver’s license. You may be required to submit additional information depending on your chosen platform.

Note that fees may vary depending on your chosen payment option. Also, depending on your region and choice of exchange, you may need help to make deposits from your bank to cryptocurrency platforms.

Place Your Order

Once you have deposited money in your account, it is time to buy Bitcoin. Many crypto-trading platforms offer traders different ways to invest and an impressive variety of order types, with the most common types being market order, limit order, and stop order.

A market order, also known as a spot order, is the easiest crypto order and is usually executed instantly. It functions as an instruction to trade crypto at the market’s most attractive price, which is usually the most recent price.

Another popular order type is the limit order, which functions as a command to buy or sell cryptocurrency at a specific price the trader sets. It allows traders to trade crypto without constantly monitoring the market.

Lastly, stop orders are activated when the market price hits the “stop” price. These orders are hidden from the market until the price is met.

Understanding the different orders will help you be more flexible and adapt to market situations.

Store Your Bitcoin

One of Bitcoin’s main features is decentralization, meaning there is no third-party institution to guarantee the safety of your coins. So, you have to be careful with how you decide to store your cryptocurrencies.

You can store your coins on the exchange you use. However, this means you’re keeping your Bitcoin in the exchange’s custody and cannot access your private keys, which is not a bad idea. However, these platforms may be subject to the whims of hackers.

You can also store your Bitcoin in personal hot or cold wallets, which gives you more freedom to use your coins as you please without being restricted by an exchange platform.

You can store your Bitcoin using a crypto-trading platform, but preferably for smaller investments and a short period. However, a personal wallet is better in the long term and for more significant investments.

Ways to Buy Bitcoin on The Internet

Many exchanges support different payment options for buying Bitcoin. Some of them include

A Credit Card

Many crypto-trading platforms allow traders to buy Bitcoin using a credit card, so using it as your payment option depends on you. It depends on whether your credit card issuer permits its use for purchasing cryptocurrencies and whether you are ready to incur the additional fees, including transaction fees, processing fees, and broker fees, that come with using the credit card payment option. Using a credit card to buy Bitcoin is relatively easy and similar to Bulk Electronic Clearing System (BECS) transfers.

PayPal

To buy Bitcoin using PayPal, you can use an existing account or create one if you don’t. You can use funds in your PayPal or link your account to a debit card or bank account. You can use PayPal to purchase very few coins, including Bitcoin and Ethereum; you only need to locate the crypto icon and select BTC. You should note that PayPal also charges transaction fees for trading cryptocurrencies, usually proportional to the amount bought. Platforms like eToro allow traders to use PayPal to buy Bitcoin.

P2P Exchanges

P2P trading allows for decentralized trade between people trying to buy and sell cryptocurrencies. People can interact, buy, and sell coins more directly using such platforms. The process usually involves sellers creating listings that include their selling price and payment method. Then, if a buyer finds the price and terms agreeable and initiates a purchase, the Bitcoin is secured in escrow (a third party guaranteeing the interests of both parties involved in a trade) until payment is confirmed. After that, the buyer gets the Bitcoin. P2P exchanges provide ample opportunities for traders to shop for excellent deals before buying.

Conclusion

Now, you know how to purchase Bitcoin online. Ensure you choose an exchange with a solid reputation, and remember to invest only what you can afford to lose, as the crypto market is highly volatile.