Bitcoin has experienced a remarkably strong start in 2020. Analysts believe it could be a blockbuster year for Bitcoin and for the crypto market in general. In January, the Bitcoin market gained steam and has finally broken through the level of $9,000 for the first time in 2020.
Step 1. How to buy BTC: choose a trustworthy Bitcoin trading app
There is a whole bunch of crypto exchanges out there with different performance and levels of credibility. You should focus on an award-winning and regulated crypto exchange.
An online crypto exchange is a marketplace that operates similarly to platforms that traders use to buy stocks. The BTC exchange connects you directly to the Bitcoin marketplace, where you can exchange traditional fiat currencies for Bitcoin.
Bitcoin exchanges resemble Forex markets. These are digital platforms where you can exchange BTC to USD, BTC to EUR, BTC to GBP or choose any other crypto-to-fiat currency pair.
Although the crypto exchange serves as a one-stop solution compliant with the most stringent security standards and AML rules, you should note that it is not recommended to store large amounts of Bitcoins on your account for a long time. While the in-built wallets are secure enough to ensure smooth trading, it is advisable to transfer your crypto holdings to an external wallet.
This leads us to the next step of our journey – choosing a Bitcoin wallet. Experts believe you should stick to the one with a multi-signature facility.
Step 2. How to buy Bitcoin safely: choose the right wallet.
Since Bitcoins are not literally coins they need a special place to be kept securely. You should choose a digital wallet to store your Bitcoin holdings until you are ready to spend them or exchange to another currency.
The major challenge is to choose a crypto wallet you can trust. Crypto wallets operate through private and public keys, which represent long strings of numbers and letters, created through a mathematical encryption algorithm.
- Public key works as a location where Bitcoin transactions are deposited to and withdrawn from. These keys appear on the Blockchain ledger as a user’s digital signature.
- Private key is a password necessary to buy, sell and trade the Bitcoin in a wallet. This key should be protected and used only to authorise Bitcoin transactions.
Some traders prefer to encrypt a Bitcoin wallet with a strong password, and in some cases choose a cold storage option.
What exactly do we mean by saying a ‘cold’ and ‘hot’ wallet? In-built or ‘hot’ wallets offered by some exchanges are regarded as more agile and safe for exchanging crypto to fiat. Although they guarantee the highest level of security for clients’ assets, they still incur some external risks.
That is why many traders stick to offline or ‘cold’ wallets, when it comes to storing significant amounts of crypto assets. Cold wallets, representing special hardware devices, are not vulnerable to fraudulent activity when they are offline.
Step 3. How to buy Bitcoin easily: choose a payment method you want
Bitcoin exchanges accept different payment options. Today you can use traditional payment methods, such as a bank transfer, credit and debit card transactions or even Apple Pay to fund your account and buy Bitcoins.
Step 4. Buy Bitcoin now
Once you have set up your account on the crypto exchange, decided where to store your Bitcoins and what payment method to choose – you are ready to buy some Bitcoins or its fractions.
The crypto exchange will provide you with the real-time streaming Bitcoin price rate and show how much of a Bitcoin (or how many Bitcoins) you can buy for a particular sum of money.
Note that Bitcoin is used to skyrocketing and drastically sinking throughout its history. And even if you do not have enough funds to buy a Bitcoin, you can buy a fraction and trade it further to earn more.