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In the investment of Bitcoin (BTCUSD) might seem complicated, however it's easy to breakdown the process into steps. Investing or trading Bitcoin is easy if you have the creation of an account on a service or exchange. However, other safe storage practices are advised.There are several things that new Bitcoin investors require such as a cryptocurrency exchange account, personal identification documents that you can use with the Know Your Customer (KYC) platform along with a safe connection to the Internet as well as a method for payment. It is also suggested that you keep a personal wallet outside of the exchange account. Acceptable payment methods for these options include bank account as well as debit cards and credit cards. There is also the option to make bitcoin transactions at ATMs that are specialized and through exchanges P2P.KEY TAKEAWAYS* The value of Bitcoin comes from the fact that it is a popular store of value and payment method as well as its finite supply and decreasing inflation.Although it's almost impossible to allow Bitcoin to be compromised but it is still possible for your exchange or wallet system to suffer a breach. That's why proper security and storage practices are vital.* You can also purchase bitcoin through the main services such as PayPal? and Robinhood.* One way to invest in bitcoin indirectly is to invest into companies with bitcoin in their balance accounts.Before You Buy BitcoinSecurity? and privacy are vital issues to Bitcoin investors. Anyone who has access to the private key to the public address to the Bitcoin blockchain can be authorized to make transactions.1 Private keys should be kept secret as criminals may try to take them away in the event of learning of huge assets. Be aware that anyone can be able to see the balance at a public address you are using. One advantage of this is that it allows an individual to have multiple addresses public for themselves. So, they can share their stash of Bitcoin over a variety of addresses. An effective strategy is to invest large amounts at public addresses that are not directly connected to the addresses that are used in transactions.Anyone can check the history in transactions done on blockchain--even you. Although transactions can be publicly recorded on the Blockchain, identifying user information is not. In the Bitcoin blockchain there is no private key appears in any transaction. This makes transactions safe but not private. In this sense, Bitcoin transactions are more transparent and traceable than cash because all of transactions are public examination, unlike private transactions. However, Bitcoin transactions also include elements of anonymity incorporated into the design. It's extremely difficult to identify the transacting parties--i.e. the party who sent and received bitcoins--on the cryptocurrency's Blockchain.Researchers from around the world and the FBI have claimed to be able monitor transactions on the Bitcoin blockchain to users' other online accounts, including their digital wallets.2 For example, if one creates an account with Coinbase it is required to provide their identification.3 After that, when the buyer buys bitcoin, that is tied to their personal name. If they decide to transfer it to another account, it will still be traced back to the Coinbase purchase tied to the identity of the account holder. This should not be a concern for the majority of traders since Bitcoin may be used legally in U.S. and most other developed nations.Be sure to research the legal, regulatory, and taxation status for buying and selling bitcoin in the region where you are located prior to conducting transactions.Buying BitcoinWe?'ve broken down the steps involved in buying bitcoin below. Keep in mind that you will need study the options thoroughly and choose the most suitable option according to the specifics of your situation.Step 1: Choose one of the crypto trading services or venueThe first step in purchasing bitcoin is selecting a crypto trading company or venue. The most popular trading venues and services to buy cryptocurrencies include exchanges, payment services, and brokerages. From these, cryptocurrency exchanges are the most convenient choice due to the fact that they provide a variety of features and than cryptocurrencies to trade.When you sign up with a crypto exchange can allow you to buy, sell, or keep cryptocurrency. It is generally recommended to choose an exchange that allows its users to take crypto out of their personal online wallet for safekeeping. In the case of those wanting to trade Bitcoin or other cryptocurrency, this option may not be necessary.There are various kinds in cryptocurrency exchange. Since the Bitcoin ethos is about decentralization and individual sovereignty, certain exchanges allow users to remain anonymous and do not have to require their personal details. These exchanges operate as autonomous entities and are generally decentralized that is, they don't have a central point of control.<img width="477" src="">Although these systems could serve criminal purposes, they also provide services to people who are not banked. Particularly for refugees or those living in countries without a sufficient infrastructure for credit from the government and banking--anonymous exchanges might help connect them to the world's economy.Right now, however, the most well-known exchanges aren't decentralized , and they follow regulations that require users to provide identifying documentation. For instance, in the United States, these exchanges include Coinbase, Kraken, Gemini, FTX, and Binance.US To name a few. The number of exchanges has increased in the variety of features they offer.The world of crypto has expanded rapidly in the last decade with a multitude of new tokens to compete for investors' dollars. Except for Bitcoin and a few other prominent coins like Ethereum, not all of these tokens are available at all exchanges. Each exchange has its own set-of criteria to decide whether to allow or deny trading certain tokens.Coinbase, Kraken, and Gemini provide Bitcoin and a growing amount of altcoins. These three are probably ones of the easiest ways to get into crypto across the industry. Binance is for an advanced trader, and offers advanced trading tools and an array of alternative currency options. FTX is a booming crypto exchange with a multibillion-dollar valuation, offers limited amounts of altcoins for U.S. investors.4 However, investors outside of to the U.S. have a greater range of cryptos available on its platform.A crucial thing to keep in mind when creating accounts for cryptocurrency exchanges is the need to employ secure Internet procedures. This includes two factor authentication and having a unique and long password with a mix of lowercase and capitalized letters or special characters as well as numbers.El Salvador made Bitcoin legal tender on September 7, 2021. It was the very first country to do so.5 The cryptocurrency can serve as a currency to pay for transactions in which businesses are able to accept it. It is the U.S. dollar continues to be the currency of El Salvador.Step 2: connect your account to an alternative payment methodOnce you've decided on an exchangeoption, you'll be required to gather your personal documents. Dependent on the exchange, the documents could include a photo of a driver's licence or Social Security card, as well as information about your employer and the source of money. The information you need will depend on the area you reside in and the regulations that are in place within it. It's basically similar to the process of setting up a standard brokerage account.After the exchange has verified the authenticity of your account, you will be required to connect an option for payment. At most exchanges, you can connect your bank account with a single click or connect a debit or credit card. Although you can utilize a credit card to purchase cryptocurrency, it's not a wise choice because the volatility of prices for cryptocurrency can boost the price of buying a coin.Bitcoin exists in legal form in United States, but some banks might question or block deposits to crypto-related websites or exchanges.6 It is a good idea to check to confirm that your bank allows deposits to the exchange you choose.There are different fees for transactions made with a banking account debit or credit card. It is important to research the costs for each payment option to help choose an exchange or to decide which one works best for you.Exchanges also charge fees per transaction. These fees can either be an all-inclusive fee (if the amount traded is small) or it could be a percentage of trading amount. Credit cards incur fees for processing in addition to transaction fee.Step 3. Make an orderYou can purchase bitcoin (or other cryptocurrencies) after choosing an exchange and connecting a payment option. In recent times bitcoin exchanges have steadily become more popular. They have grown considerably in terms both of liquidity and the range of features they offer. The operations of cryptocurrency exchanges coincide with the change in the perception of cryptocurrencies. An industry that was once considered to be a scam or with unreliable practices is slowly morphing into an honest one which has attracted attention from the top players in the financial services industry.The cryptocurrency exchanges of today have advanced to the point that they're able to provide nearly the exact range of features that they have as their counterparts in the stock brokerage industry. Exchanges for cryptocurrency today offer different types of orders and options to invest. A majority of cryptocurrency exchanges offer both limit and market orders. A few offer stop-loss orders. Of the exchanges discussed above, Kraken offers the most available order types. Kraken can accommodate market, limit, stoploss stop-limit as well as take-profit and limit orders.7Alongside the variety of options for orders, the exchanges offer methods to set up ongoing investments, allowing investors to add a dollar-cost average to their investment options. Coinbase, for example, lets users make recurring purchases for every day, week or month.8Step 4: Safe storageBlockchains, cryptocurrency or Bitcoin are the perfect place to keep digital assets more securely. By keeping your crypto away from the exchange and inside your own wallet will ensure that only you hold the private key to the funds. This also gives you the ability to keep your funds separate from an exchange and avoid the possibility that your exchange is hacked and losing your funds.Although the majority of exchanges offer user-friendly wallets, security is not their primary business. We generally do not recommend using an exchange's wallet for huge or long-term crypto holdings.Some wallets are more advanced than other wallets. Some are Bitcoin only, and others are able to store various altcoins. Some wallets even offer the possibility of swapping one token with another.When you're trying to decide on the best Bitcoin wallet, you can choose from many options. The first thing you will have to know about crypto wallets is the concept of hot wallets (online wallets) and cold wallets (paper or physical wallets).Hot walletsDigital wallets also known as "hot" wallets. Hot wallets work via Internet-connected devices, including computers, phones, or tablets. This poses a risk because they create private keys to the coins in these devices connected to the Internet. While a wallet that is hot can be quite convenient in the way that it allows you to access and make transactions with your funds quickly, the storage of your private key on an Internet-connected device makes it more vulnerable to attack.This may seem absurd, but hot wallet holders who haven't set up enough security have the possibility of being robbed of their funds. This is not an infrequent incident, and it can occur in several ways. For instance, bragging in a public forum, such as Reddit about the amount of bitcoins you have in your account when you're using little to no security and keeping it in a hot bank account would make sense. That said, these wallets can be secured as long as precautions are taken. Secure encryption, strong passwords and two factor authentication, and secure Internet browsing should be considered as minimum necessities.The best wallets for hot wallets are for smaller amounts or cryptocurrency you're involved in trading with an exchange. You can think of a hot wallet to a checking account. Financial wisdom is generally believed to only put money spent in a check account while the majority of your money is in savings accounts or other investments accounts. Similar can be said of hot wallets. Hot wallets consist of mobile, desktop, web and exchange account custody wallets.The exchange wallets function as custodial accounts supplied by exchanges. The owner of this type is not the holder of the public key for the cryptocurrency held in the wallet. If an event should happen where the exchange gets breached or your account is compromised, then you'd lose your funds. The expression "not your key, not your coin" is often repeated on cryptocurrency forums and communities.Cold walletsThe most simple way to describe a cold wallet is that it is not linked to the Internet and therefore has the lowest risk of being affected. These wallets might also be known as offline wallets or hardware wallets. They keep a user's private key on something which is not connected to the internet. They are also equipped with software that operates in parallel so that the user has access to their portfolio , without putting their private keys in danger.The most secure way to store cryptocurrency offline is through a paper wallet. Paper wallets are account that can be generated through certain websites. It generates both public and private keys that are printed out on paper. The ability to access bitcoin and other digital currencies is only possible if you've got the piece paper that is protected by the private key. A lot of people laminate their wallets in paper and put them in safe storage boxes at the bank or in a safe at home. They are intended for long-term investments and high security because it is impossible to quickly sell or trade bitcoins stored in the way.The most popular type of cold wallet is one that is a physical wallet. A hardware wallet is typically made up of a USB drive device that keeps your private keys offline. The benefits of such wallets are substantial over hot wallets since they are immune to viruses that can infect one's computer. With hardware walletsyour private keys don't come in contact with your computer's network or any software that may be vulnerable. The devices are usually open source, which allows the community to gauge their security by conducting code audits rather than a company claiming that they are suitable for use.Cold wallets are the best and most safe method of keeping your bitcoin or any other cryptocurrency. But they require additional technical knowledge to setup.A great method to set up your wallets is to include three items that you need: an exchange account to buy and sell an exchange account, a hot bank account to keep small to medium amounts of crypto they want to trade with or sell as well as a cold hardware wallet that can store more substantial holdings for long-term durations.How to Buy Bitcoin With PayPalYou? can also buy bitcoin via the payment processor PayPal? Holdings, Inc. (PYPL). There are two methods to purchase bitcoin using PayPal?. The first and most convenient option is to purchase cryptocurrency through your PayPal? account, which is linked to a payment system that accepts banking account, debit card or credit card. Another alternative is to use the balance on one's PayPal? account to purchase cryptocurrencies from a third-party company. This option is not as easy as the first because a few sites allow users to buy bitcoin through Paypal. https://www.openlearning.com/u/jennycoduti-r71gk6/about/?share=1 .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 cryptocurrencies to purchase products or services by using PayPal?'s "Checkout With Crypto" feature.10To open a crypto account with PayPal?, the following information is required in order to set up a PayPal? account: name; physical address or address, birth date along with a tax identification number.11It isn't possible using credit cards to buy Bitcoin via PayPal?. When you purchase, PayPal? will display a price for the cryptocurrency. But that price is subject for rapid change because of the volatility of the cryptocurrency market. It's a good idea in order to ensure you have more money than the amount you had budgeted to purchase in your account at the bank.When you purchase bitcoin directly through PayPal? it earns profit through the crypto spread or the difference between the market price of Bitcoin or exchange rates USD. PayPal? may also charge an transaction fee for each transaction. The fee is based on the amount of money spent. For instance, a flat charge of $0.50 is payable for purchases of between $100 and $200. Following that, the cost is a percentage of the overall dollar amount. In this case, for instance, a cost of 2% of the amount total is charged for crypto purchases between $100 to $200.12The disadvantage of buying cryptocurrency via PayPal? is that you are not able to transfer the crypto away from the transaction processor's network. Therefore, it's possible to transfer your bitcoin purchase from PayPal?'s wallet to an external crypto wallet, or your personal wallet.11Another disadvantage to using PayPal? is that only a few exchanges and online traders allow using the processor in order to buy payments. eToro is one of the few online brokers that allow users to use PayPal? to purchase bitcoin through its platform.13How to Buy Bitcoin With a Credit CardThe? process of buying bitcoin using credit cards is similar to the process for purchasing it via debit cards or automatic clearing houses (ACH) payments. The buyer must enter your credit card's details with the exchange or online trading company, and then you can authorize the purchase. However, generally speaking, it's not a great option to buy bitcoin using credit cards. There are several reasons to this.First, none of the exchanges permit bitcoin purchase using credit cards due to the associated processing fees and the risk of committing fraud. This decision may work out in the best interests of consumers. This is because credit cards can tack additional charges onto such transactions. So, in addition to paying transaction fees you'll end up with processing costs which the exchange will pass on to you.The second reason is because the purchases made using credit cards are expensive. Some credit card companies treat bitcoin purchases as cash advances, and have to charge high-cost fees and rates for such advances. For example, American Express and Chase each count cryptocurrency purchases being cash advance purchases. In other words, if one purchases 100 dollars worth of bitcoin with an American Express card, you will pay just $10 (current cash advance charge for the transactions) plus an annual percentage fee of 25 percent. In addition, the credit card company also limits customers to only $1,000 worth of bitcoin purchases per month.14An alternative way to purchase bitcoin with a credit card is to use an Bitcoin rewards credit card. These cards function as a typical rewards credit credit card except they reward you in the way of bitcoin. In other words, they convert the earnings from purchase into Bitcoin. One example of the Bitcoin Rewards card to use is BlockFi? Bitcoin Rewards Credit Card.15 Be aware, however that the annual fees for such cards can be high as well as the expenses associated with the conversion from fiat currency to crypto.Although exchanges such as Coinbase as well as Binance remain one of the most well-known ways to purchase Bitcoin but they're certainly not the only option.Alternative Ways to Buy BitcoinBitcoin? ATMsBitcoin? ATMs act like in-person bitcoin exchanges. The user can add cash to an ATM and use it for the purchase of bitcoin. It is then moved to online accounts for users. Bitcoin ATMs are becoming more popular in recent years--even retail massive Walmart Inc. (WMT) is conducting a test program that offers its customers the option of purchasing bitcoin. Coin ATM Radar can help to find the closest ATMs.However ATMs aren't cheap alternative. There are two costs that come along with ATM bitcoin transactions they charge a cost for the purchase as well as an exchange fee to convert any fiat currency to bitcoin. Both fees are fairly steep when compared to other options. As an example, the average charge for purchase at Bitcoin ATMs is 8.4 percent (of the amount of purchase) and 5.4% for sales at ATMs.16Be aware, however, that Bitcoin ATMs have been increasingly requiring government-issued IDs as of early 2020.Exchanges P2PWhile decentralized exchanges allow sellers and buyers to meet anonymously and manage all aspects of the transaction, there's peer-to-peer (P2P) exchange services which facilitate a faster connection between customers. LocalBitcoins? is an example of such an exchange. After registering an account, users can request to purchase or sell bitcoin. It also includes details regarding payment methods as well as costs. Users can also browse through listings of buy and sale offers by selecting the partners with whom they wish to conduct business.LocalBitcoins? helps with certain aspects of trading. While P2P exchanges don't have the same level of privacy as decentralized exchanges but they provide users with the option of shopping around for the best deal. A majority of these exchanges have rating systems, so that customers can review potential trade partners before transacting.Mainstream brokeragesThe majority of brokerages do not offer the ability to buy and trade bitcoin due to the uncertainty over regulation of cryptocurrency. Robinhood Markets, Inc. (HOOD) A mobile app very popular among investors from retail, is one exchange that offers crypto trading capabilities. It charges no commission for crypto trades and purchases . It earns its money through payment for order flow, transferring its trading volume to the other platforms for trading or brokerages.17The absence of a commission fee could be an attractive proposition for newbies, but there are some downsides to the offer. The first is that Robinhood can't offer the variety of features and cryptocurrency offered by popular crypto exchanges like Coinbase. Robinhood has allowed trading on its platform to trade seven cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, Bitcoin SV, Dogecoin, and Ethereum Classic.18 But, in contrast, you can exchange more than 100 cryptocurrency through Coinbase.19 The exchange also provides different types of orders to reduce risk and offset losses during trading.The Robinhood platform does not have an online wallet. Therefore, if you intend to purchase cryptocurrency using Robinhood you'll need to consider additional fees for an online wallet provider.Bitcoin and other cryptocurrency investments are not covered by insurance under insurance companies like the Securities Investor Protection Corporation (SIPC). For regular brokerages, the agency protects against the loss of securities and cash in account with brokerages that are up to $500,000, which includes a $250,000 cash limit.20 This insurance option isn't available to customers on cryptocurrency exchanges. Cryptocurrency exchanges such as Coinbase have insurance for crime to protect their infrastructure against attacks. However, the insurance does not guarantee protection for individual customers against password theft.21How to Sell BitcoinThere? are ways to sell bitcoin at the same locations where you purchased the cryptocurrency, such as cryptocurrency exchanges and P2P platforms. In general, the process of selling bitcoin through these platforms is similar to buying it.For example, you may only be required to click to select the type of order (i.e. how much, if the cryptocurrency should be offered immediately at the lowest price, or whether it should be sold to prevent losses) in order to conclude the sale. Depending on the market composition and the level of demand at the site the cost of selling Bitcoin can be different. In the case of exchanges, for instance, South Korea traded bitcoin at what is known as a kimchi cost during the peak in prices in the year 2018.A percentage of cryptocurrency exchanges will charge you a fraction of the crypto sale amount in the form of fees. For instance, Coinbase charges 2.49% of the total amount for transactions as fees.22Exchanges typically have daily and monthly withdrawal limitations. Therefore, the proceeds from an enormous transaction may not be immediately available to the trader. There are no restrictions on the amount of crypto you can sell, however.What Are the Steps for Purchasing Bitcoin?The procedure to buy bitcoin is made up of four parts: selecting the location and exchange you want for your order as well as selecting a payment option and then ensuring a secure storage for your purchased cryptocurrency. Based on the option you pick in the initial stage, there could be additional steps involved in the procedure. For instance, if you are purchasing the cryptocurrency with Robinhood there may be a need to take into account additional costs for an online wallet and custody of your bitcoins since they do not provide these services.What Are the Most Popular Venues for Buying Bitcoin?The most widely used venues for purchasing bitcoins include cryptocurrency exchanges brokering companies (crypto and mainstream) as well as payment solutions like PayPal?. There is also the option of buying Bitcoin through P2P exchanges. For the indirect ownership of bitcoin it is possible to put money into companies that own bitcoin on their balance sheets. For instance, Tesla, Inc. (TSLA) or MicroStrategy? Incorporated (MSTR).2324How Much Should I Expect to Pay to Purchase Bitcoin?Typically, the price for purchasing bitcoin includes a transaction fee plus the cost to convert a cash currency (generally dollars) to bitcoin. (Cryptocurrency exchanges and payment companies make money off of this conversion spread.) The fee per trade is a function of the dollar value of the trade. The larger the amount of the trade will cost more. Cost of purchasing will depend on the features offered by the provider. For example, Robinhood does not currently provide an online wallet to saving bitcoin. Thus, you'll have to budget online wallet fees for your purchase.Besides Cryptocurrency Exchanges, Where Else Can I Buy Bitcoin?You can also buy bitcoin at these locations:* Through Bitcoin ATMs* Through online payment services such as PayPal?* At mainstream brokerages like RobinhoodIs? My Bitcoin Purchase Protected by SIPC?You are not protected by your bitcoin purchase. is not covered by SIPC.20 At certain exchanges, such as Coinbase accounts, the balance of your fiat in private accounts can be insured under FDIC in the amount of $250,000 per account.21The Bottom LineThe? process for purchasing bitcoin is more involved when compared to purchasing regular stocks or equity. This is due to the fact that the blockchain and cryptocurrency infrastructure are not as well developed as the traditional trading.A bitcoin purchase process consists of four stages: choosing the best option for a location or service for your purchase, joining to an online payment system, making an order, as well as ensuring an appropriate storage space for your cryptocurrency. Each of these steps requires extensive research and careful examination of the pros as well as negatives of each service. Bitcoin can be purchased through Bitcoin ATMs or pay services such as PayPal? and other major brokerages, such as Robinhood.