Since 2009, Bitcoin’s popularity has been steadily rising. After a decade of its existence, the original cryptocurrency has surpassed the status of a temporary fad and has become one of the most coveted assets on the planet.
Consequently, institutional and retail investors want to buy bitcoin and participate in this financial revolution created by the cryptocurrency market. If you are one of them, you’ve come to the right place to learn how to purchase Bitcoin safely.
In this article, we explore the main advantages of Bitcoin and the best places where you can acquire some in the safest way possible. Additionally, we will take a look at some of the most common wallet types that should help you keep your bitcoin safe.
Why buy Bitcoin?
Bitcoin is the cryptocurrency that started it all. Created in 2009 by the mysterious Satoshi Nakamoto, this digital coin spurred a movement, making people understand the importance of a decentralized currency, away from the control of the banks and governments.
Bitcoin has proven to be a solid store of value throughout the years, thanks to some features that are coded into its protocol. One of the biggest advantages of Bitcoin over traditional money is its deflationary model.
Two properties play in favour of the price of Bitcoin:
- Limited quantity – Bitcoin is limited to 21 million coins, of which almost 19 million are already in circulation. In contrast, FIAT currencies like the USD or EUR have no cap, allowing governments to print more money as they see fit, diluting the value of the money already in circulation.
- Controlled distribution – Every 4 years, the amount of Bitcoins miners receive upon discovering a new block is reduced by half. This increases the scarcity of Bitcoin even further, driving up prices higher.
How to buy Bitcoin safely and where?
Luckily, there are multiple safe ways to buy Bitcoin and start “staking the sats”. However, before you make your initial purchase, make sure you follow our short guide on creating a Bitcoin wallet.
Before you buy – create a Bitcoin wallet
You see, cryptocurrencies like Bitcoin do not exist in any physical shape or form. Instead, they are records of transactions on the blockchain and can be represented by a private key (used to sign transactions) and a public address (used to receive Bitcoins).
Because of this, you will need a special piece of software called a Bitcoin wallet to safeguard your keys. There are several types of wallets on the market, serving different purposes. The most common types are:
- Mobile wallets – which are smartphone apps that allow you to send and receive Bitcoin. Great for small amounts of Bitcoin. Example: Exodus Wallet.
- Desktop wallets – software solutions for your PC that help you encrypt your keys safely on your computer. Great for moderate amounts of Bitcoin. Example: Guarda Wallet.
- Hardware wallets – specialized hardware solutions that allow for cold storage of your keys, while at the same time providing for some day-to-day convenience with their user-friendly interfaces. Great for large amounts of Bitcoin. Example: Ledger.
Once you have created your Bitcoin wallet, you can proceed with your purchase using one of the three main methods depicted below.
Centralized exchanges are the most popular way to buy and trade Bitcoin. Exchanges such as Binance and Coinbase allow you to purchase cryptocurrencies using a wide variety of payment methods including credit cards, bank transfers, or other cryptos.
However, there is a caveat to this convenience. Centralized exchanges will keep your coins on an online wallet, where you don’t have control over your funds. To remedy this issue, transfer your Bitcoin onto your previously created Bitcoin wallet to retain custody over your coins.
Crypto brokers are a great way to purchase Bitcoin quickly and safely. Platforms like Coinmama or Paybis will require a KYC procedure prior to purchase, but once this is done, you will be free to buy Bitcoin at will.
The advantage here is that these types of brokers will usually send you your crypto directly onto your wallet, avoiding any third-party custodianship.
Exchanges like Paxful or LocalBitcoins act like the middleman between bitcoin users. They allow you to find other users that wish to sell their Bitcoins using dozens of methods of payment, including credit and debit cards, digital wallets such as Paypal, or even popular gift cards for e-commerce giants like Amazon.
Finally, Bitcoin ATMs are yet another decent method for purchasing Bitcoin if there are machines in your region. They require minimal KYC (phone number is enough in most cases) and you can use credit, debit, or cash to buy Bitcoin. CoinATMradar will help you find the closest Bitcoin ATM to your location.
Bitcoin is an increasingly appreciating asset that offers some great advantages. It offers fast and cheap transactions and can be a decent hedge against inflation. By using one of the methods depicted in this article, you will be able to buy Bitcoin quickly and safely, from almost anywhere on the planet.