Bitcoin has been getting lots of media attention lately, both positive and negative. If you’re interested in trading Bitcoin but aren’t sure where to start, we can help you out! Here are some of the most important things to know about buying, selling, and trading Bitcoin online.
Step 1) Get a wallet
Buying and selling cryptocurrency will only work if you have a place to store it. There are different types of wallets out there; desktop wallets connect directly to your computer and let you store cryptocurrency as well as manage transactions. Mobile wallets connect via an app on your phone or tablet, while hardware wallets are physical devices that store private keys (the code needed to access certain cryptocurrencies) in encrypted form. Regardless of which type of wallet you get—or whether you go with a wallet at all—make sure it’s stored somewhere safe and secure like a bank vault or safety deposit box. In addition, don’t put all your eggs in one basket; having two or three forms of backup is never a bad idea with digital currencies. The most popular options include
Step 2) Find an exchange
There are several places you can go to purchase bitcoin in exchange for fiat currency. The most popular exchanges are Coinbase, Kraken, Bitstamp, and Poloniex. Remember that you don’t have to buy one whole coin at once—you can purchase part of a coin if you don’t have enough money on hand. Or use an exchange like GDAX where you can trade USD for Bitcoin (and vice versa) without actually having your own cryptocurrency wallet with Coinbase.
Step 3) Transfer BTC from exchange to wallet
You’ve probably heard a lot about Bitcoin in the news. And if you haven’t, you may have been living under a rock! All jokes aside though, Bitcoin is taking over as an alternative currency. But what do you do with it once you have some? Read on to find out how to use your digital currency. It’s not that different from using normal money – because at its core it really isn’t any different. You can either spend it or save it. How easy it is to spend your Bitcoins depends largely on where you live.
Step 4) Buy Bitcoin (or another cryptocurrency)
There are a few places where you can use cash to purchase cryptocurrency. You can find an online exchange (like Coinbase) that allows you to use a bank account or credit card. The primary benefit of these exchanges is ease of use; if you’re new to digital currency, it can be intimidating. Other sites allow you set up a direct transfer from your bank account. Either way, make sure that your money goes into your own personal wallet—not one owned by an exchange—and keep track of any purchases made on behalf of someone else. If somebody sends digital currency from their account without your permission or knowledge (known as incident reporting), don’t take responsibility for their transactions . . . just report them and move on.
Step 5) Complete transactions on exchanges
Exchanges are a fantastic way to get started trading bitcoins, but because you’re trading with other users of the exchange, prices may be higher than average. (Your average price will even out as more transactions go through.) The best way to avoid getting a bad deal is by having a game plan going in: know how much you’re willing to spend before you start looking at bids and offers. Once you know that number (and only once you know it!), then it’s time to pick your poison: You can select either a market order or limit order.
Step 6) Participate in ICOs (optional)
Participating in ICOs (or initial coin offerings) is a great way to participate in projects you think have potential. It can also be extremely lucrative if done properly. In short, participating in an ICO is a bit like gambling with one exception: people are much more willing to invest their money into these new ventures compared to your run-of-the-mill slots game or poker tournament. There’s still a great deal of risk involved though!
Step 7) Store your Bitcoin or other cryptocurrencies offline (optional but recommended).
You may want or need to store your Bitcoin offline on a USB drive. In case you lose your wallet (and therefore access to your money), having a backup will help you regain control of it. You may want or need to store your Bitcoin offline on a USB drive. In case you lose your wallet (and therefore access to your money), having a backup will help you regain control of it.