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An investment in Bitcoin (BTCUSD) can seem complex, but it's easier to understand if you reduce it into smaller steps. It is possible to invest in or trade Bitcoin only requires an account at a third party or an exchange, although additional storage methods that are safe are suggested.There are a variety of things aspiring Bitcoin investors should have such as a cryptocurrency exchange account in addition to personal identification documents If you're using a Know Your Customer (KYC) platform in addition to a secure connection the Internet, and a method of payment. It is recommended that you use your own private wallet separate from your exchange account. Payment methods that are accepted on these options include bank account that accept debit cards, as well as credit cards. It is also possible to access bitcoin ATMs at special locations and also through P2P exchanges.KEY TAKEAWAYS"The importance of Bitcoin is derived from its popularity as a storage of value and payment method along with its limited supply, and the decrease in inflation.* Although it is nearly impossible to for Bitcoin itself to be hacked but it is still possible for your wallet or exchange user account to compromise. This is why practicing proper storage and security measures is essential.* You can also buy bitcoin through mainstream services such as PayPal? or Robinhood.One way to get bitcoin is to invest in businesses that have bitcoin in their balance reports.Before You Buy BitcoinSecurity? and privacy is one of the major aspects in the lives of Bitcoin investors. Anyone who has access to the private password to a publicly accessible address via the Bitcoin blockchain can then authorize transactions.1 Private keys must be kept in secret. Criminals may attempt to take them away in the event of learning of huge accounts. Remember that anyone is able look up the balance for a public address you've created. On https://www.ted.com/profiles/33359894 , this kind of information is that one can make multiple public accounts for themselves. This means they can spread their wealth of Bitcoin over a variety of addresses. One good option is to hold large investments at public addresses that aren't directly connected to addresses that are used in transactions.Anyone can access a history of transactions on the blockchain, even you. Although transactions are recorded publicly on the blockchainsystem, identifying the user's information isn't. In the Bitcoin blockchain only the private key appears in each transaction. Thus, transactions are private but not in any way anonymous. In this regard, Bitcoin operations are more transparent and trackable in comparison to cash, as all of them are open for public access, unlike private cash transactions. But Bitcoin transactions also have the element of anonymity built as part of their design. It's difficult to find the transacting parties--i.e. the sender and recipient of bitcoins on the cryptocurrency's own blockchain.International researchers as well as the FBI claim they are able track transactions made on the Bitcoin blockchain with users' other online accounts, such as their digital wallets.2 For example, if someone opens an account at Coinbase you must supply their identification.3 If that user purchases bitcoin, it is linked to the account holder's name. In the event that they transfer it an alternative wallet, it could be traced back to the Coinbase purchase that is connected to the identity of the account's owner. This shouldn't be a problem for most buyers since Bitcoin is legal in the U.S. and most other developed nations.You should be sure to verify regulations, laws, and tax implications of buying or selling bitcoin in your area of reside prior to making a transaction.Buying BitcoinWe? have detailed the steps to buying bitcoin below. Be aware that you need to do your homework and pick the most appropriate option for your specific circumstances.Step 1: Select a cryptocurrency trading service or a venueThe first step in buying bitcoin is selecting a crypto trading site or venue. Most popular venues and trading services that allow the purchase of cryptocurrencies comprise cryptocurrency exchanges, payment service providers, and brokerages. In all of them, cryptocurrency exchanges are by far the most convenient choice due to the fact that they provide a breadth of features and more different cryptocurrencies that can be traded.Joining a cryptocurrency exchange can allow you to buy, sell and hold crypto. It is usually best to select an exchange provider that lets users withdraw crypto into their account online for safe keeping. If you're planning to trade Bitcoin or other crypto currencies, this feature may not matter.There are many kinds and types of crypto exchanges. Because the Bitcoin principle is independence and personal sovereignty, some exchanges allow users to remain anonymous and don't need users to input particular information about themselves. These exchanges are autonomous and are often decentralized which means that they do not have a central point of control.Although these systems could serve harmful purposes, they also provide services to vast majority of people without banking. In certain cases, people who are refugees and those living in countries with a lack of infrastructure for credit from the government or banking, anonymized exchanges can integrate them into the mainstream economy.In the moment, all of the top exchanges in the world are decentralized , and they follow regulations that have users provide identification documentation. As for the United States, these exchanges comprise Coinbase, Kraken, Gemini, FTX, and Binance.US To name a few. These exchanges have seen significant growth in terms of the features they offer.The cryptocurrency world has grown rapidly in the last decade as a number of new coins have been seeking investor dollars. The exception is Bitcoin and a few other prominent coins, such as Ethereum there are a few exceptions to the fact that not all the tokens listed are on all exchanges. Each exchange has its own set of criteria to determine whether to include or not allow trading of specific tokens.Coinbase, Kraken, and Gemini provide Bitcoin and a variety of altcoins. They're probably the easiest crypto on-ramps that exist in the market. Binance is designed for the more sophisticated marketer, and provides greater trading capabilities and more altcoin choices. FTX is a rapidly-growing crypto exchange that has earned a multibillion-dollar valuation, offers limited number of altcoins to U.S. investors.4 However, those who are not from that U.S. have a greater variety of coins available on its platform.One of the most important things to remember when creating the account for a cryptocurrency exchange that you use secure Internet procedures. This means two-factor authentication, as well as an extensive, unique password that can include a variety of lowercase characters, capitalized letters in addition to special characters, as well as numbers.El Salvador made Bitcoin legal tender on September 7, 2021. It was the only country to do so.5 The cryptocurrency can serve as a currency to pay for transactions that the company can accept it. However, U.S. dollar continues to serve as El Salvador's main currency.Step 2: Attach your swap to an alternative payment methodAfter you've picked an exchangeoption, you'll have to collect your personal documents. If you are using an exchange, this could include images of a driver's license or Social Security card, as well as information about your employer and source of funds. The details you'll need may depend on where that you reside in as well as the regulations within it. The process is in general the same as creating a typical brokerage account.Once the exchange has confirmed your identity, you'll be required to connect to a payment service. Most exchanges can connect your bank account straight away or connect a credit or debit card. Even though you can use a credit card to buy cryptocurrency, it's not a good idea because cryptocurrency price volatility could inflate the cost of buying the coin.Bitcoin remains legal across the United States, but some banks may question or refuse deposits to crypto-related web sites or exchanges.6 It is an excellent idea to confirm to confirm that your bank allows deposits to the exchange you prefer.<img width="415" src="">There are varying fees for transactions made with a banking account or debit card. It is important to learn about the costs that come with each payment option in order to determine the best exchange for you or choose the option that is most effectively for you.Exchanges can also charge fees per transaction. These charges can be an all-inclusive fee (if the amount traded is small) or it could be a percentage of trading amount. Credit card transactions incur fees for processing as well as transaction charges.Step 3: Place an orderIt is possible to purchase bitcoin (or other cryptocurrency) when you select an exchange and connecting to a payment method. In recent years Bitcoin exchanges have slowly becoming more prevalent. They have grown dramatically in terms both of liquidity and their array of features. The operational changes at crypto exchanges have been accompanied by a change in the perception of cryptocurrencies. A sector that was previously dismissed as a fraud or one that had questionable techniques is slowly changing into a legitimate business that has attracted interest from all the big players in the financial services sector.The cryptocurrency exchanges of today have become so popular that they're almost the same range of features that they have as their stock brokerage counterparts. Exchanges for cryptocurrency today offer various types of orders and options to invest. Almost all crypto exchanges offer limits and market orders. Some even provide stop-loss orders. From the above exchanges, Kraken offers the most available order types. Kraken supports market, limits, stop-loss orders, stop limit also known as take-profit as well as limit orders.7Alongside a wide range of different types of orders, exchanges offer ways to set up indefinite investments, allowing customers to create a dollar-cost-average into their investment of choice. Coinbase, for example, lets users create recurring purchases to be made every day, week, or month.8Step 4: Secure storageCoins and crypto wallets are an ideal place to store digital assets more safely. With your cryptocurrency out of the exchange and stored in your personal wallet ensures that only you have control over the private keys to your accounts. Additionally, it allows you to have the ability to store funds away from exchanges and eliminate the risk that your exchange's security being compromised and causing loss of funds.While many exchanges provide users with wallets, security is not their primary business. We do not generally recommend using an exchange wallet for big or long-term cryptocurrency investments.Some wallets have more features than other wallets. Some are Bitcoin only, and others can store multiple types of altcoins. Certain wallets also have the ability to swap one token for another.When it comes down to picking an Bitcoin wallet, you can choose from many options. The first thing you must know about crypto wallets is the concept of hot wallets (online wallets) and cold wallets (paper or physical wallets).Hot walletsThey are referred to as "hot wallets. Hot wallets operate with Internet-connected devices, like phones, computers, or tablets. These wallets can pose security risks because these wallets generate the secret keys to your currency in these devices connected to the Internet. Although a digital wallet can provide convenience in the ways that you can access and transact with your money quickly, keeping your private key on an Internet-connected device can make it more susceptible to a attack.This may seem absurd although hot wallet users that don't put in place enough security could be at risk of being robbed of their funds. It's not a rare occurrence, and it can occur in several ways. You can, for example, brag on forums such as Reddit about how much bitcoins you have in your account when you have little or nothing secure and storing it in a hot bank account would not be the best idea. However, these wallets can be made secure as long as the necessary precautions are in place. Secure encryption, strong passwords and two factor authentication, and safe Internet browsing should be considered as minimum specifications.These wallets work best when you have a small amount of cryptocurrency or cryptocurrency that you're currently trading on an exchange. You could think of a hot wallet to a bank account. The conventional wisdom of finance is not to place money you use in a checking account , whereas the bulk of your money is held in savings accounts or other investments accounts. The same can be said on hot wallets. Hot wallets can be described as mobile, desktop, web and exchange account custody wallets.As mentioned previously, exchange clients are custodial wallets that are offered by exchange. The user of this wallet of this type does not hold the owner of the public key for the cryptocurrency that is held in this wallet. If an event should occur , where the exchange becomes hacked or your account becomes compromised, then you'd lose your money. The expression "not your key, not your coin" is heavily repeated on cryptocurrency forums and communities.Cold walletsThe simplest description of"cold" wallets is that it isn't interconnected to the Internet so it has significantly lower risk being compromised. These wallets can be called offline wallets or even hardware wallets. They save the user's private key in a device that isn't connected to the internet. They come with software which operates in parallel, so that the user can look at their entire portfolio without putting personal key at risk.The most secure way to keep your money offline is via a paper wallet. A paper wallet is a wallet that you can generate from certain websites. Then, it generates public and private keys that can be printed on paper. Access to the cryptocurrency within these addresses is only possible when you've got the piece paper with the private key. A lot of people laminate their paper wallets and store them in safe deposit boxes in their banks or even in a safe at home. These wallets are intended for the highest security and for long-term investments, as you can't quickly sell or trade bitcoins stored in using this method.A more frequent type of cold wallet is one that is a physical wallet. A hardware wallet is usually an USB drive that is used to store a user's private keys securely offline. The advantages of these wallets are significant over hot wallets as they are unaffected by viruses that could harm a computer. With hardware wallets, your private keys are never in contact with your computer's network or software that could be vulnerable. They're also open source, allowing the community to gauge their safety through audits of code rather than a corporation stating they're secure to be used.Cold-wallets are among the most safe way to store your bitcoin or other cryptocurrencies. But they require more technical knowledge to setup.An excellent way to set your wallets is having three things: an exchange account to buy and sell with a hot or hot wallet that will hold small to medium amounts of crypto which you'd like to trade sell along with a cold and secure hardware wallet that can store more substantial holdings over a longer period of time.How to Buy Bitcoin With PayPalYou? can also purchase bitcoin through a payment processor PayPal? Holdings, Inc. (PYPL). There are two methods to buy bitcoin with PayPal?. The most efficient and convenient method is to purchase bitcoin with your PayPal? account that is connected to a financial institution such as a cash card or debit card. The second option is to make use of the balance on you PayPal? account to purchase crypto via a third-party supplier. This option is not as easy as the first because a few sites allow users to buy bitcoin using the PayPal? button.Four cryptocurrencies--Bitcoin, Ethereum, Litecoin, and Bitcoin Cash--can be purchased directly through PayPal?.9 With the exception of those who live in Hawaii, residents of all states can either use their existing PayPal? accounts or set up new ones. It is also possible to use your cryptocurrency to purchase goods and services with"Checkout With Bitcoin" or the "Checkout With Crypto" feature.10To set up a bitcoin account with PayPal?, the following information is required for registration: name, physical address and date of birth or tax identification number.11It is not possible to use credit cards to buy Bitcoin via PayPal?. In the course of purchasing, PayPal? will display a price for the cryptocurrency. However, this price can be subject fluctuation due to the volatility of the cryptocurrency market. It's a good idea to ensure that you've got more money than the amount which you budgeted in your savings account.When you purchase bitcoin from PayPal? the company earns money by selling the crypto spread, or the differential between Bitcoin's market rate along with its currency exchange USD. The company additionally charges you a transaction fee for each purchase. The amount of the fee depends on the amount in dollars that the purchase is. For example the flat rate of $0.50 is payable for purchases of between $100 to $200. Thereafter, the fee is in the form of a percentage of total dollar amount. In this case, for instance, a cost of 2% of the total value is charged for crypto purchases between $100 to $200.12The main drawback of buying cryptocurrencies through PayPal? is that it is not possible to transfer the currency outside the pay processor's website. So, it's not possible to transfer the bitcoin you purchased through PayPal?'s bank account to your external wallet for crypto, or your personal wallet.11The second disadvantage of using PayPal? is that very few trading platforms and exchanges allow users to utilize the credit card processor in order to buy payments. eToro is among the few online brokers that allow you to make use of PayPal? to purchase bitcoins on its platform.13How to Buy Bitcoin With a Credit CardThe? procedure to purchase bitcoin with credit cards will be similar to the process for purchasing it via debit cards , or through electronic clearinghouse (ACH) transfer. You'll have to input your credit card's details with the exchange or online trading firm and sign the transaction. In general, , it's not a wise idea to purchase bitcoin with credit cards. There are a few reasons to this.First, most exchanges will not allow Bitcoin buying with credit cards due to the associated processing fees and the possibility of fraud. This decision may work out in the best interests of customers. This is since credit card processing can add additional charges onto transactions. So, in addition paying transaction fees the customer will be charged with processing fees that an exchange could pass on to you.The other reason is that purchases made with credit cards can be expensive. Issuers of credit cards view bitcoin transactions as cash advances and have to charge high-cost fees and rates for these advances. For example, American Express and Chase each count cryptocurrency purchases into cash advance transaction. Therefore, if, for example, you purchase the equivalent of $100 in bitcoin using an American Express card, you are required to pay just $10 (current cash advance fee applicable to such transactions) and an annual fee of 25 percent. What's more, the credit card provider also restricts you to $1,000 worth of bitcoin transactions per month.14An alternative way to purchase bitcoin using a credit card is by acquiring a Bitcoin rewards credit card. These cards work like a regular rewards credit or debit card, however, they grant rewards in cryptocurrency bitcoin. This means that they invest profits from purchases into Bitcoin. One illustration of the Bitcoin points card for rewards is the BlockFi? Bitcoin Rewards Credit Card.15 Be aware, however that the annual fees for these cards could be expensive and there could be additional costs associated with the transformation of fiat currencies in crypto.Although exchanges like Coinbase and Binance remain among the most popular ways to purchase Bitcoin but they're not the only method.Alternative Ways to Buy BitcoinBitcoin? ATMsBitcoin? ATMs act like in-person bitcoin exchanges. Individuals can plug cash into the machine and use it to buy bitcoin that is then stored in online wallets of users. Bitcoin ATMs have become increasingly widespread in recent times. Retail big Walmart Inc. (WMT) is testing a pilot program which provides customers with the option of buying bitcoin. Coin ATM Radar can help in locating the nearest ATMs.However ATMs can be expensive option. There are two expenses associated with ATM bitcoin transactions one of which is a purchase cost and the other a conversion fee for converting cash to bitcoin. Both are quite high relative to the other alternatives. The world average cost for purchases from Bitcoin ATMs starts at 8.4% (of the amount of purchase) and 5.4 percent for sales at ATMs.16Be aware, however, that Bitcoin ATMs have been increasingly requiring government-issued IDs beginning in 2020.Exchanges P2PUnlike decentralized exchanges, which allow sellers and buyers to meet anonymously and handle all aspects of the trade, there's peer-to-peer (P2P) exchange services that facilitate a better connections between users. LocalBitcoins? is an example of this type of exchange. Once an account has been created, users can post requests to buy or sell bitcoin. They can also provide details on payment methods and prices. The users can then look through the listings of offers to buy and sell by selecting the partners with whom they wish to conduct business.LocalBitcoins? provides a variety of benefits to the trade. While P2P exchanges may not provide an identical level of security and privacy as decentralized exchanges, they allow users the ability to shop around to find the best price. A majority of these exchanges have rating systems that allow users to can assess potential trade partners prior to transacting.Mainstream brokeragesA few major brokerages provide bitcoin-based trading and purchasing capabilities because of the uncertainty regarding the legal status of cryptocurrency. Robinhood Markets, Inc. (HOOD) which is an app widely used by retail investors is an exchange that has cryptocurrency trading services. It charges no commissions for cryptocurrency transactions and purchases , and earns money from money received for order flow and transferring its trading volume to the other platforms for trading or brokerages.17The absence of a commission fee might be an appealing option for newbies, but there are a couple of limitations to the service. For one, Robinhood can't offer the number of features or coins that are offered by the most prominent crypto exchanges like Coinbase. Robinhood has made it possible to trade on its platform for seven different cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, Bitcoin SV, Dogecoin, and Ethereum Classic.18 As a contrast, you can trade more cryptocurrencies than 100 with Coinbase.19 It also offers several types of orders to limit risk and offset losses during trading.The Robinhood platform doesn't have a hosted wallet. If you are looking to buy cryptocurrency on Robinhood you'll need add additional costs for an online wallet provider.Bitcoin and other cryptocurrency investments aren't protected by insurance policies from the Securities Investor Protection Corporation (SIPC). At traditional brokerages, this firm is responsible for the loss of cash or securities brokerage accounts containing up to $500,000and a $250,000 cash limit.20 That facility is not available to customers that use crypto exchanges. Exchanges for cryptocurrency like Coinbase are covered by insurance against crime to safeguard their infrastructure from hacks. However, the insurance does not shield individual customers from password theft.21How to Sell BitcoinBitcoin? can be sold at the same venues where you bought the cryptocurrency, such as cryptocurrency exchanges and P2P platforms. Usually, the process for selling bitcoin through these platforms is similar to the procedure for buying it.In this case, for instance, you could only be required to click the button and choose an order type (i.e. what type of order, whether the cryptocurrency will be sold immediately at the cheapest price or it is necessary to sell it to be able to limit losses) to conduct the sale. Depending on the market composition and the demand at the location the price of offering for Bitcoin will vary. For instance, exchanges in South Korea traded bitcoin at a so-called kimchi premium during the run-up in its prices in the year 2018.The cryptocurrency exchanges charge a portion percent of the price for crypto in the form of fees. For example, Coinbase charges 2.49% of the total transaction value as fees.22Exchanges generally have daily and monthly withdrawal limits. Therefore, money from the sale may not immediately be available to the buyer. There aren't any limits to the amount of bitcoin you can sell, however.What Are the Steps for Purchasing Bitcoin?The process to buy bitcoin is made up consisting of four steps: selecting an exchange or venue to make your purchase and selecting a payment method and then making sure you have a safe place to store for your purchase. It is dependent on the location you choose in the initial step, there are additional steps required in the process. For instance, if, for example, you choose to purchase the cryptocurrency through Robinhood there may be a need to consider additional costs to get an online account as well as custody of your bitcoin because it doesn't offer these services.What Are the Most Popular Venues for Buying Bitcoin?The most popular options to purchase bitcoins are exchanges brokers (crypto and standard) along with payment services like PayPal?. It is also possible to purchase Bitcoin through P2P trading platforms. For the indirect ownership of bitcoin you may buy shares in companies that keep the cryptocurrency on their balance sheets, like Tesla, Inc. (TSLA) or MicroStrategy? Incorporated (MSTR).2324How Much Should I Expect to Pay to Purchase Bitcoin?Typically, the price for buying bitcoin includes one fee per trade in addition to the cost to convert a non-fiat currency (generally dollars) to bitcoin. (Cryptocurrency exchanges and payment companies make money out of this conversion spread.) Fees per trade are a function of the amount in dollars of the trade. A greater value of trade will attract higher fees. The total cost for purchase depends on features offered by the location. For example, Robinhood does not currently offer an online wallet for the storage of bitcoin. This means that you'll have to budget for costs associated with an online wallet purchase.Besides Cryptocurrency Exchanges, Where Else Can I Buy Bitcoin?You can also buy bitcoin in the following locations:* Through Bitcoin ATMs* Through online payments services such as PayPal?* At mainstream brokerages like RobinhoodIs? My Bitcoin Purchase Protected by SIPC?No, your bitcoin purchase is not protected by SIPC.20 In certain exchanges, like Coinbase Bitcoin, the balances of the fiat currency in individual accounts may be insured by FDIC at $250,000 per account.21The Bottom LineThe? process for purchasing bitcoin is somewhat more complicated than purchasing regular equity or stock. This is mainly because the ecosystem and infrastructure for bitcoin aren't as robust similar to the one used in traditional trading.A bitcoin purchase process consists from four steps: choosing an option or a place to make purchasing, connecting to a payment option, placing an order, and ensuring secure storage for the purchased cryptocurrency. Each of these steps involves a lot of research and careful study of the pros & advantages of each one. You can also purchase bitcoin at Bitcoin ATMs or pay companies like PayPal? and more traditional brokerages like Robinhood.