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How to buy Bitcoin? Everything about investing in BTC [Guide]
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How to buy Bitcoin? Everything about investing in BTC [Guide]

created Alice NowakJune 8 2020

How to buy Bitcoin? Everything about investing in BTC cryptocurrency

Despite the huge increase in popularity Bitcoin In recent years, not everyone knows what it really is. Bitcoin is the first and most popular of cryptocurrencies. It was created in 2009 by a person or, more likely, a team of people operating under a pseudonym Satoshi Nakamoto.

Bitcoin source code is publicly available and any programmer can join its development. Since the publication of the source code in 2009 by Satoshi Nakamoto, a community of programmers from around the world has been working on refining the project.

Bitcoin is both a means of payment and an entire, pre-designed network to support payments in this currency. If you are wondering how to buy bitcoin, what are the options and how they differ, be sure to read this article.

Bitcoin rate - Chart


The creator of Bitcoin - the mysterious Satoshi Nakamoto

satoshi nakamoto how to buy bitcoinSatoshi Nakamoto's identity is shrouded in mystery, and he withdrew from work on Bitcoin in 2010. This causes a number of speculations about his person, connections, influences and goals he had when publishing the core of the BTC source code. Most of this speculation is due to a misunderstanding of the fact that Bitcoin is an open, public project that developers from around the world are working on. It can therefore be compared to a Wikipedia project. It is an open encyclopedia project that works independently of its creator and is voluntarily co-created by people from all over the world.

Bitcoin and national currencies and central banks

Bitcoin is not supervised or issued by any country and is not subject to the regulations of any central bank. It was created as an alternative, transnational payment system, independent of the banking system.

Payment properties in Bitcoin - advantages

Transaction Security

Despite the fact that the Bitcoin payment network is not supervised by any institution, payments using this means of payment are considered very secure. Instead of a trusted institution, transaction security is supervised by a well-designed system of mutual verification and cryptographic block encryption.

Accessibility and freedom

Bitcoin is a decentralized, digital payment network. Therefore, we can pay and send BTC without time and geographical restrictions. On weekends, in the middle of the night, anywhere in the world. The blockchain network is non-stop working and processing new transactions, allowing users to freely use their funds, without any restrictions typical for the banking network.

During the 10 years of existence of the Bitcoin network, the network was active for 99,98% of the time. This means just two days off service.

Low fees

Currently, sending money on the Bitcoin network is free of charge. The exception is the transfer of many, very small amounts, which is charged in order to protect the network from overload.

Privacy protection

You do not need to provide sensitive data during Bitcoin transactions. As a result, the risk of identity theft while making payments is negligible. Transactions are encrypted and signed with an encrypted, individual key that does not contain any of our sensitive data.

Full control

Bitcoin network users have full control over transactions. It is not possible for hidden fees to appear hidden in the regulations, as may be the case when using other payment services.

Clarity

All transactions that took place using Bitcoin are available immediately to each user (you can check them out here). Once completed, the transaction cannot be changed or canceled.

Payment properties in Bitcoin - disadvantages

Low popularity

After all, Bitcoin and other cryptocurrencies are still enjoying little popularity and interest. Few people understand what cryptocurrencies are, and even fewer of them can practically use them. This means that virtual token technology still has the best times ahead when the number of users using it increases.

Susceptibility to speculation

Due to the shallowness of the Bitcoin market and the relatively small number of actively using users, the price of Bitcoin is prone to speculation. Relatively small transactions can significantly affect Bitcoin fluctuations. This vulnerability should decrease as the use of this cryptocurrency increases.

Continuous Bitcoin code development

Bitcoin is still being improved and expanded by a team of programmers voluntarily working on it. Tools that facilitate the use of Bitcoin and optimize the operation of the entire network appear on an ongoing basis.

What is blockchain?

Bitcoin works in blockchain technology, i.e. a block chain. The block chain is a digital, cryptographic version of the book of accounts, in which every transaction that has ever been made using Bitcoin is recorded.

Each new transaction must be confirmed by the network and saved in the block chain.

Where do Bitcoins come from?

Bitcoins get into circulation thanks to "miners", i.e. people and companies that use the computing power of their devices to "dig" Bitcoins. Bitcoin mining is actually a computer solving complex cryptographic problems. After the computer solves a certain number of mathematical tasks, a "block" is dug out, for which the miner gets paid (at this time 6.25 BTC per block). Once all the planned Bitcoins (21 million) have been dug up, the miners' task will be to maintain the network to confirm transactions and keep this digital cryptographic accounting book. They will also receive remuneration for this.

Bitcoin and inflation

Bitcoin was created as an inflation-resistant cryptocurrency. The system was designed so that a maximum of 21 Bitcoins appear in circulation. It is estimated that the full amount of BTC will go into circulation in 000.

Therefore, after extraction of every 210 blocks (approximately every 000 years), the reward for mining subsequent blocks is reduced by half. In this way, the cryptocurrency is protected against depreciation (inflation).

How to buy Bitcoin?

Currently, there are at least several different ways how to buy bitcoin. Which one should you choose? It all depends on our goal and the so-called risk appetite. For speculative and profit-making purposes using volatility, the best way is to choose options that allow you to use the leverage mechanism and provide great transparency in handling transactions. In this situation, investors most often choose Cryptocurrency exchanges and/ or Forex brokers offering Bitcoin.

In the event that our priority is the "stability" of investments, we are not interested in the financial leverage and the transaction platform or we want to use cryptocurrencies for payments or direct exchange with other network users, it is best to equip ourselves with the so-called wallet and use the services of an online currency exchange.

Internet exchange offices

They are characterized by simple operation and relatively low commissions. In most exchange offices you need to set up an account and verify your identity by posting your ID card scan. Some exchange offices require additional verification by doing Selfie with the document and the date written on a sheet of paper (or other form of photo authorization). Verification usually takes up to one business day.

Popular bitcoin online exchange offices on the web include flyingatom.com, bitcan.pl, bitcantor.com, coinbase.com or 4coins.pl.

Official commissions for buying and selling in these exchange offices vary from 1,5% to 3,5%. The exception is Coinbase, which always charges a fixed commission of 0,99 €, regardless of the transaction amount.

When choosing an online currency exchange service, it's worth checking out on the Internet what real commissions are charged when buying and selling cryptomonets and what is the real time of completing the order. Especially in the case of smaller bureaux de change they can be drastically different from those officially listed. If you're wondering how to buy Bitcoin quickly and cheaply, it's definitely better to bet on the large and popular cryptocurrency exchange.

Cryptocurrency exchanges

What is the difference between an exchange and an exchange office? When buying cryptocurrencies in an exchange office, we buy them directly from an exchange office. We buy them from other users on the stock exchange. The rate is set in real time based on the offers to buy and sell all users using the exchange and buying or selling their cryptocurrencies.

How to buy bitcoin on the cryptocurrency exchange? Nothing easier. All you need to do is create an account, pass the data verification, pay the deposit and ... ready! We can purchase any token (from those offered by a given exchange).

bybit opinions logo cryptocurrency exchange binance
Country of Registration British Virgin Islands (BVI) Malta
Foundation year 2018 2017
Commission 0.075% (or less)
0,03% (MT4)
approx. 400
Financial leverage 1:100 (futures) 1:20 - 1: 125 (futures)
The number of cryptocurrencies approx. 300 approx. 380
website www.bybit.com www.binance.com
 

bybit

One of the most recognizable cryptocurrency exchanges in the world. In many respects, it has already overtaken its biggest competitor – Binance. It offers many instruments as well as additional services such as trading via the platform MetaTrader 4, API, Crypto Loans, Staking, NFT, Auto Invest, Copy Trading, HandelGPT, Options and trading bots.

To set up an account, you must verify your identity by sending scans of your ID card and a document confirming your place of residence. An interesting and useful option is the possibility of obtaining a payment card associated with the account.

Binance

Cryptocurrency exchange founded by Chinese Changpeng Zhao. Offers trade in a very wide range of digital currencies. In June 2020 on Binance, we can trade over 1200 different cryptocurrencies outside of Bitcoin. 

The Binance Exchange also offers a dividend system for sharing your funds in cryptocurrencies for lending to other users. He also regularly organizes various competitions.

In 2017, the stock market fell victim to hackers, as a result of which 7000 Bitcoins worth about $ 40 million were stolen. The Exchange has committed to returning stolen funds to users from its guarantee fund.

CFDs

An indirect method of speculation on the price of Bitcoin is investing in CFDs at a Forex broker. In this way, we can earn on the difference of Bitcoin exchange rate (daily exchange rate volatility can be 10%) without physically having this cryptocurrency, but only contracts reflecting its price.

CFDs are leveraged, i.e. we have leverage (usually 1: 2), which allows us to increase profits (although it also involves the risk of a larger loss). When choosing a Forex broker, we de facto decide to take a half-measure, because we do not become the owners of any cryptocurrency, but we gain security (deposit guarantees, companies regulated by national financial supervision, protection against the creation of overdraft), as well as investment comfort (advanced transaction platforms ). The downside is the limited amount of cryptocurrency instruments.

xtb forex brokers fxpro bitcoin broker fpmarkets vps logo
Country of Registration Poland Cyprus, UK Cyprus, Australia, St. Vincent & Grenadines
Min. Deposit PLN 0
(recommended min. PLN 2000 or USD 500, EUR)
PLN 500 50 USD
Tool MT4, xStation MT4, MT5, cTrader MT4, MT5, cTrader
Financial leverage 1:2 1:2 1:2
The number of cryptocurrencies approx. 25 4 12
website www.xtb.com fxpro.com www.fpmarkets.com
 

How to buy Bitcoin - Cryptocurrency wallets

Storing funds on the cryptocurrency exchange involves the risk of losing funds as a result of the bankruptcy of the stock exchange or a hacker attack. For this reason, wallets are considered the safest form of cryptocurrency storage. They do not give too much speculation, but if you are not interested, this is the best choice.

Desktop wallets

They resemble most of the programs that you install on your computer. In the desktop wallet, private keys are stored on your private computer. Popular desktop wallets are Exodus or Electrum.

Browser wallets

Unlike desktop wallets, in the case of a browser wallet, the private keys of our cryptocurrencies are stored online on the wallet website. It is a less secure solution due to the possibility of a hacking attack and entrusting the private keys of cryptocurrencies to a third party - the owners of the website that is a browser wallet. The degree of security of cryptocurrencies stored in such a way can be compared to the security of storing funds on cryptocurrency exchanges.

Hardware wallet

The safest form of cryptocurrency storage. Funds are stored outside of internet access. The wallet itself resembles a pendrive, but it is equipped with a dedicated operating system and certified chips. An example of a hardware wallet is Ledger.

Mobile wallet

It works on a similar principle as a desktop wallet, but is a dedicated application for a smartphone, not a computer. A popular mobile wallet is Mycelium or Exodus.


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About the Author
Alice Nowak
An active trader on an individual Forex account since 2014, keenly interested in the subject of economy, business and capital markets. For over 10 years closely associated with the world of IT and new technologies, programmer, internet marketing enthusiast. Enthusiast of spending time outdoors surrounded by nature and greenery or practicing yoga.
1 Comments
  • Raphael FX
    10 June 2020 at 16: 40

    it has been said that forex brokers are protected against debit entry. it probably results from European regulations. but I began to wonder how it is on cryptocurrency exchanges with a jack? when I buy bitcoin on a bin, where there is a jackpot and a flash crash will happen, there is a good chance that I will fall into debit. and then what? will binance want to pay extra for me? but all in all, on what basis 😛 I don't have such a dilemma, because I play xtb mainly due to the lack of tax problem and a good platform, but binance looks good also from this list so I would like to know what it is like?

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