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The process of investing in Bitcoin (BTCUSD) may appear complex, but it's simpler when you divide it up into steps. Investing or trading Bitcoin is easy if you have access to a bank account or exchange. However, further safe storage practices are advised.There are several things that new Bitcoin investors require the following: a cryptocurrency account or personal identification document for those who use the Know Your Customer (KYC) platform as well as a secure connection to the Internet, and a method for payment. It is also suggested to have a private wallet, separate from your exchange account. Affordable methods of making payments using these options include bank account including debit cards, banks, and credit cards. You can also obtain bitcoin through ATMs that are specifically designed and P2P transactions.KEY TAKEAWAYS"The importance of Bitcoin is due to its popularity as a storage of value, as well as a payment method and its limited supply, and the decrease in inflation.* While it's almost impossible to for Bitcoin itself to be compromised in the event of a hack, it's nevertheless possible that your bank or exchange account to be compromised. This is the reason proper storage and security measures is vital.You can also purchase bitcoin through the main services like PayPal? or Robinhood.* One way to own bitcoin in indirect ways is to invest in companies with bitcoin in their balance and balance sheets.Before You Buy BitcoinSecurity? and privacy is one of the major concerns security and privacy are important concerns for Bitcoin investors. Any person who gains the private password to a publicly accessible address using the Bitcoin blockchain can sign off on transactions.1 Private keys should be kept secret. Criminals might attempt to steal them once they know of your large assets. Be aware that anyone can check the balance on a public address used. On the other hand, the public data is that a person can set up multiple public addresses for themselves. This allows them to spread their wealth of Bitcoin among several addresses. It is a good idea to protect investments that are significant at public addresses that aren't directly connected to addresses that are used in transactions.Anyone can see a record of transactions conducted on the blockchain--even you. While transactions can be recorded publicly on the blockchainplatform, identifying individual information about the user isn't. In the Bitcoin blockchain users only have their private key appears in an activity, which makes transactions secret however not completely anonyme. In that way, Bitcoin the transactions appear more clear and traceable than cash transactions because all of them are open for public scrutiny, unlike private cash transactions. But Bitcoin transactions also include added security features that protect the privacy of the transaction in their structure. It's difficult to locate the transaction parties--i.e. the person who sends and receives bitcoin--through the blockchain used by the cryptocurrency.International researchers as well as the FBI have stated that they can trace transactions that are made on the Bitcoin blockchain to the users' other online accounts, which includes their digital wallets.2 For example, when someone registers on Coinbase they will need to supply their identification.3 This means that when that buyer purchases bitcoin, it is tied to their name. In the event that they transfer it another wallet, it may be traced to the Coinbase purchase tied to the account owner's identity. This shouldn't worry most investors as Bitcoin remains legal throughout the U.S. and most other advanced countries.Be sure to check out all the regulatory, legal and tax requirements for buying and selling bitcoin in the country where you reside prior before making any transactions.Buying BitcoinWe?'ve simplified the steps of buying bitcoin below. Remember that you still need to research the options and select the best option for your situation.Step 1: Choose a crypto trading company or a venueThe initial step in purchasing bitcoin is selecting a crypto trading company or a location. Some of the most well-known trading platforms and venues to purchase cryptocurrencies include exchanges, payment services, and brokerages. In the list, cryptocurrency exchanges are by far the most convenient option since they come with a wide range of features and cryptocurrencies for trading.In signing up for a crypto exchange will enable you to purchase, sell, and keep crypto. It is usually best to go with an exchange which lets users withdraw cryptocurrency into their private online wallet to keep safe. In the case of those wanting to trade Bitcoin or other crypto currencies, this feature isn't crucial.There are many types of exchanges for cryptocurrency. Because the Bitcoin ethos is about independence and personal sovereignty, certain exchanges permit users to remain anonymous and do not make users fill out particular information about themselves. These exchanges operate independently and are usually decentralized which means they do not have a central source of control.Although such systems are often used to fulfill evil purposes, they also provide services to the world's unbanked population. For certain groups of people, such as refugees or those who reside in nations with little to no infrastructure for government credit and banking--anonymous exchanges might help get them to join the mainstream economy.In the moment, the majority of popular exchanges aren't decentralized , and they follow regulations that require users to supply identifying documents. In the United States, these exchanges include Coinbase, Kraken, Gemini, FTX, and Binance.US These are just a few. These exchanges have grown significantly in terms of the features they offer.The crypto-currency market has grown rapidly over the last decade, with many new tokens fighting for the investor's dollars. The exception is Bitcoin and a few other prominent coins, such as Ethereum but not all of these coins are sold on all exchanges. Each exchange has its own set of standards to determine whether to include or not allow trading of specific tokens.Coinbase, Kraken, and Gemini offer Bitcoin and a rising number of altcoins. These three are probably the most user-friendly on-ramps of crypto that exist in the market. Binance targets a more advanced marketer, providing the most sophisticated trading features and a better variety of altcoin options. FTX is a rapidly expanding crypto exchange that has garnered the highest valuation in terms of dollars per share, has only a limited amount of altcoins to U.S. investors.4 However, those who are not from within the U.S. have a greater variety of tokens available on its platform.The most important thing to consider when creating your cryptocurrency exchange account is to make use of secure Internet practices. This means two-factor authentication, as well as an extensive, unique password which includes a variety of lowercase letters, capitalized and capitalized letters or 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 Bitcoin is able to serve as currency for any transaction that a business is able to accept it. However, U.S. dollar continues to be El Salvador's main currency.Step 2. Connnect your exchange with an option for paymentOnce you've decided on an exchange, you will need to gather your personal documents. Depending on the exchange, this could include images from a driver's license and/or Social Security card, as in addition to information about your employer and the source of funds. The information you'll require will vary depending on the area that you reside in as well as the laws that apply to it. The process is almost similar to creating a typical brokerage account.Once the exchange has confirmed the authenticity of your account, you will be asked to join the payment option. For most exchanges, you can connect your bank account directly or you can connect a debit or credit card. However, if you want to use a credit card to buy cryptocurrency, it's not advisable because cryptocurrency price volatility could inflate the total cost of purchasing coins.Bitcoin has been legalized in the United States, but some banks may be suspicious of or restrict deposits to crypto-related sites or exchanges.6 It is important to research whether your bank permits deposits to the exchange you have chosen.There are various charges for deposits to a bank account in the form of debit, credit, or card. It is important to learn about the costs for each payment option in order to determine the best exchange for you or choose which payment option works best for you.Exchanges may also charge fees for each transaction. The fees may be a flat fee (if the trading amount is low) or an % of the trading amount. Credit cards incur processing fees in addition to the transaction fees.Step 3. Place an orderBitcoin can be purchased (or other cryptocurrencies) when you select an exchange option and connecting a payment method. In recent years cryptocurrency exchanges slowly becoming more prevalent. They have grown considerably in terms if liquidity and their number of features. The operational changes of cryptocurrency exchanges are in line with the shift in the perception of cryptocurrencies. One industry that was thought of as a scam or one that was based on questionable practices is gradually becoming legitimate and is attracting the attention of all of the major players in the financial services sector.Now, cryptocurrency exchanges ' offerings have developed to a point where they provide the same quality of features as their counterparts from stock brokerages. These exchanges provide several types of orders and ways to invest. Most exchanges in the crypto space offer both limit and market orders. A few provide stop-loss transactions. The exchanges listed above, Kraken offers the most different types of orders. Kraken lets you place market, limit, stoploss or stop-limit take-profit, and take profit limit orders.7Apart from offering a variety of sorts of orders, exchanges offer ways to set up an investment program that allows investors to incorporate a dollar-cost average into their investment options. Coinbase is one example. It allows users to make recurring purchases for every day, week, or month.8Step 4: Secure storageBlockchains, cryptocurrency or Bitcoin are a place to store digital assets with greater security. By keeping your crypto away from the exchange and inside your personal wallet means that only you are the only person who has control over the private key for your funds. Also, it gives you ability to secure your funds to an exchange without the risk of your exchange being hacked and causing loss of funds.Although many exchanges offer wallets for their users, security isn't their main business. We generally don't recommend using an exchange's wallet for big or long-term cryptocurrency investments.Some wallets provide more features than others. Some are Bitcoin exclusive, while others have the capacity to store multiple altcoins. Some wallets are also equipped with the ability to swap one token for another.When you're trying to decide on the best Bitcoin wallet, you have several choices. The first thing you will have to know about crypto wallets is the concept of hot wallets (online wallets) and cold wallets (paper or hardware wallets).Hot walletsThese wallets may also be referred to as "hot" wallets. Hot wallets are wallets that run using Internet-connected devices such computers, phones or tablets. It is possible for them to be vulnerable since these wallets generate the secret keys to your currency in these devices connected to the Internet. While a hot wallet could be very convenient in the way it lets you access and make transactions with your assets in a short time, storing your private key with an internet-connected device makes it more susceptible to a attack.It might sound like a lot of work even to some, but people that don't put in place enough security have the possibility of losing funds to theft. It's not a rare occurrence, and it can occur in a variety of ways. For instance, boasting on a popular forum like Reddit about the amount of bitcoins you've got, even though your wallet is essentially no security and storing it inside a hot wallet will make sense. That said, these wallets are safe as you take the proper precautions. Secure secure passwords, 2-factor authentication and safe Internet browsing are as minimum requirements.These wallets are suitable when you have a small amount of cryptocurrency or any cryptocurrency that you're already trading on an exchange. A hot wallet to a bank account. According to conventional wisdom, you should to keep only your spending money in a checking account , whereas the majority of your funds are in savings and other investments accounts. Similar advice can be made on hot wallets. Hot wallets consist of mobile, desktop, web, and exchange account custody wallets.As stated previously, exchange clients are custodial wallets that are offered by exchange. The person who uses this wallet form is not holder to the encryption key to the cryptocurrency that is held in this wallet. If an event were to occur that the exchange breached or your account is compromised, you would lose your funds. The phrase "not your key, not your coin" is heavily repeated on cryptocurrency forums and communities.Cold walletsThe most simple way to describe"cold" wallets is that it's not interconnected to the Internet and therefore stands at greater risk of being affected. These wallets can be referred to as offline wallets or hardware wallets. These wallets store a user's private key on something remote from the internet and can come with software operating in parallel, so that users can see the account without putting his private keys at risk.Perhaps the most secure way to store digital currency offline is to use a papier wallet. A paper wallet is a account that can be generated using certain websites. It creates both private and public keys which are printed out on a piece of paper. Access to bitcoin and other digital currencies is only possible when you've got the piece paper with the private code. Many people laminate these wallets in paper and put them in safe storage boxes at the bank or even in a secure in their home. These wallets are for the highest security and for long-term investments, as they cannot be sold or trade bitcoins stored in with these wallets.The most popular type of cold card is a a Hardware wallet. It is one that is a USB drive device that keeps the user's private keys offline. These types of wallets have distinct advantages when compared to hot wallets as they are not affected by viruses that can infect one's computer. With hardware wallets, your private keys are not in contact with your computer's network or software that might be vulnerable. These devices are typically open source, allowing people to check their safety via code audits rather than a company that declares that they're suitable for use.They are by far the most secured way to store bitcoin or any other cryptocurrency. However, they require more technical understanding to setup.An excellent way to set up your wallets is by having three things three things: an exchange account to use to buy and sell an exchange account, a hot bank account to hold small to moderate amounts of cryptocurrency you want to trade or sell, and a cold hardware bank account to store larger amounts for long-term time periods.How to Buy Bitcoin With PayPalYou? can also purchase bitcoin through the payment processor PayPal? Holdings, Inc. (PYPL). There are two options to buy bitcoin with PayPal?. The first , and the most convenient way is to buy bitcoin through your PayPal? account that is connected to a financial institution, such as a debit card or bank account. The other alternative is to use the balance in one's PayPal? account to purchase crypto through a third-party service. This isn't much as user-friendly since a small percentage of third-party websites permit users to buy bitcoin by using by clicking 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. You can also make use of your cryptocurrency to buy products as well as services via"Checkout With Coin "Checkout With Crypto" feature.10To create a crypto account with PayPal? The following information is required: name, physical address, date of birth, along with a tax identification number.11It isn't possible to use a credit card to purchase Bitcoin through PayPal?. During the buying process, PayPal? will display a price for the cryptocurrency. However, this price can be subject to rapid changes due to the volatility of cryptocurrency markets. It's best to ensure that you've got more than the amount that you planned for the purchase in your bank account.When you buy bitcoin online through PayPal?, it makes money off the crypto spread or the differences between Bitcoin's value and exchange rate with USD. The company may also charge an transaction cost per transaction. These charges are based on value of the purchase. For instance an all-inclusive fee of $0.50 is charged for purchases between $100 to $200. Following that, it is an amount of the total dollar amount. For example, a fee of 2 percent from the total amount applied to purchases made with cryptos between $100 to $200.12A disadvantage to buying cryptocurrency via PayPal? is that you are not able to transfer the crypto outside of the payment processor's platform. Therefore, it's possible to transfer bitcoin purchased through PayPal?'s bank account to an alternative crypto wallet or your personal wallet.11Another drawback to using PayPal? is the fact that very few merchants and exchanges allow it to be used in order to buy payment. eToro is one of the very few online trader that allows the use of PayPal? to purchase bitcoins on its platform.13How to Buy Bitcoin With a Credit CardThe? procedure for buying bitcoin with credit card is similar to the procedure to purchase it using debit cards as well as through the automated clearing house (ACH) transfers. The buyer must enter your credit card's details into the exchange or online trading firm , and then sign off on the transaction. In general, , it's not an ideal decision to buy bitcoin using credit cards. There are a couple of factors to consider.First of all, not all exchanges allow bitcoin buying with credit cards due to the associated processing fees as well as the risk of fraud. https://www.lastgreatliar.com/cryptocurrencys-difficult-street-chinas-ico-ban/ could be in the best interests of the customers. This is because credit card processing will add additional charges to transactions. So, in addition to paying transaction fees the customer will be charged having processing charges that the exchange can pass onto you.The third reason is that credit card purchases are expensive. The issuers of credit cards treat bitcoin purchases as cash advances and add significant fees and interest rates on such advances. For example, American Express and Chase both view purchases of cryptocurrency as transactions that are cash advances. For instance, if you buy $100 worth of bitcoin using an American Express card, you will pay 10% (current cash advance fee for these transactions) plus an annual percentage of 25 percent. Additionally, the credit card company is also able to limit you to making $1,000 worth of bitcoin transactions per month.14An alternative way to purchase bitcoin with credit card is to acquire the Bitcoin Rewards credit card. These cards function similarly to your typical rewards credit card except they grant rewards in shape of bitcoin. This means that they invest cash back that is earned from purchases into Bitcoin. One illustration of the Bitcoin loyalty card, which is also known as the BlockFi? Bitcoin Rewards Credit Card.15 Be aware, however that the annual charges for these cards could be high and there may be additional costs associated to the conversion of fiat currencies to crypto.Exchanges like Coinbase and Binance remain among the most used methods to buy Bitcoin but they're not the only options.Alternative Ways to Buy BitcoinBitcoin? ATMsBitcoin? ATMs act like in-person bitcoin exchanges. Users can place cash in machines and use it to purchase bitcoin, which is later transmitted to web-based wallets for users. Bitcoin ATMs are becoming more commonplace in recent years. Retail company Walmart Inc. (WMT) is testing a trial program that offers its customers the option of purchasing bitcoin. Coin ATM Radar can help to locate the closest ATMs.However ATMs are expensive option. There are two fees that are associated with ATM bitcoin purchases they charge a cost for the purchase as well as an exchange fee to convert money from fiat into bitcoin. Both of these fees are quite expensive in comparison to other options. For example, in the world, the standard purchase price on Bitcoin ATMs amounts to 8.4% (of the purchase amount) and 5.4 percent for sales at ATMs.16Be aware, however, that Bitcoin ATMs have increasingly required government-issued IDs as of early 2020.<img width="300" src="https://preview.redd.it/qmzwmeaujnhz.png?auto=webp&s=853e98b1e42bba14a8a72d9acdcecca246690b7a">Exchanges between P2PDifferent from decentralized exchanges that are able to match sellers and buyers anonymously and make it easy for both parties to the transaction, there are some peer-to-peer (P2P) exchanges which provide a direct relationship between users. LocalBitcoins? is one of these exchange. Once they have created an account, users can make requests to purchase and sell bitcoin, as well as details regarding payment methods and costs. Users can also browse through listings of buy and sale offers, choosing the trading partners with whom they wish to do business.LocalBitcoins? simplifies certain aspects of trading. Although P2P exchanges don't provide the same security as decentralized exchanges, they give users the opportunity to search to find the most affordable deal. A majority of these exchanges have rating systems in place so that buyers are able evaluate potential trading partners prior to making a transaction.Mainstream brokeragesOnly a handful of mainstream brokerages have bitcoin trading and purchase capabilities due to uncertainty about the regulatory status of cryptocurrencies. Robinhood Markets, Inc. (HOOD) is an app popular with retail investors, is one exchange offering crypto-based trading. It charges no fee for cryptocurrency trades or purchases . It also earns money from cash flow for orders, transferring its trading volume to additional trading platforms as brokerages.17The absence of a commission fee might sound appealing for those who are new to crypto, however there are a few downsides to the offer. The first is that Robinhood cannot offer the number of features or the coins offered by some of the top crypto exchanges like Coinbase. Robinhood has allowed trading on its platform for seven different cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, Bitcoin SV, Dogecoin, and Ethereum Classic.18 However, you can trade over 100 cryptocurrencies through Coinbase.19 The exchange also offers different types of orders to reduce potential risk and limit losses when trading.The Robinhood platform doesn't have a hosted wallet. Therefore, if you intend to purchase cryptocurrencies using Robinhood you'll need add additional costs for an online wallet provider.Bitcoin and different cryptocurrency investments aren't covered by insurance coverage from Insurance companies such as the Securities Investor Protection Corporation (SIPC). In regular brokerages the organization protects against the loss of cash and securities brokerage accounts up to $500,000and a $250,000 cash limit.20 This isn't accessible to clients trading on crypto-currency exchanges. Coinbase and other cryptocurrency exchanges Coinbase have insurance for crime to protect their infrastructure against hacks. But , this type of insurance cannot shield individual customers from password theft.21How to Sell BitcoinIt? is possible to sell bitcoin on the same places where you purchased the cryptocurrency, like cryptocurrency exchanges or P2P platforms. Typically, the process of selling bitcoin through these platforms is similar to how you purchase it.In this case, for instance, you could only need to click one button and indicate the type of order (i.e. to decide if the cryptocurrency should be sold instantly at the most competitive prices or it is to be sold to reduce losses) in order to conclude the sale. Depending on the market composition and the level of demand at the site the price of offering for Bitcoin may vary. Exchanges for example in South Korea traded bitcoin at an amount known as kimchi prices during the run-up in its prices back in 2018.Coinbase and other cryptocurrency exchanges charge a certain percentage of the crypto sale amount in fees. For example, Coinbase charges 2.49% of the total transaction value as fees.22Exchanges generally have monthly and daily withdrawal limits. Therefore, cash from an extensive sale may not be immediately available to the trader. There are no restrictions on the number of coins you can sell, however.What Are the Steps for Purchasing Bitcoin?The process to purchase bitcoin consists of four parts: selecting the best location or exchange to make your purchase then selecting a method of payment and making sure that you have secure storage to store your bitcoin. Depending on the venue you select in the first section, there may be more steps involved in this process. For instance, if you purchase the cryptocurrency from Robinhood you could need to calculate additional costs for an online wallet and custody of your bitcoin because it does not offer these services.What Are the Most Popular Venues for Buying Bitcoin?Most popular locations to buy bitcoins are exchanges brokers (crypto along with mainstream) and payment processing services such as PayPal?. You can also purchase Bitcoin through P2P trading platforms. For indirect ownership of bitcoin you can also be a shareholder in companies who hold the cryptocurrency on their balance sheets, like Tesla, Inc. (TSLA) or MicroStrategy? Incorporated (MSTR).2324How Much Should I Expect to Pay to Purchase Bitcoin?In general, the cost of purchasing bitcoin consists of one fee per trade in addition to the cost to convert fiat currency (generally dollars) to bitcoin. (Cryptocurrency exchanges and payment solutions make money from this spread.) The fee per trade is a function of an amount in dollars that is associated with the trade. A greater amount of trades will be charged more. The total cost of purchase depends on the features available by the retailer. For instance, Robinhood does not currently provide an online account for keeping bitcoin. Thus, you'll have be prepared for online wallet fees for your purchase.Besides Cryptocurrency Exchanges, Where Else Can I Buy Bitcoin?Bitcoin can also be purchased 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?The purchase of bitcoin is not covered by SIPC.20 For certain exchanges like Coinbase bitcoin, balances in fiat on individual accounts can be insured by FDIC in the amount of $250,000 per account.21The Bottom LineThe? process for purchasing bitcoin is slightly more complicated than buying normal equity or stock. This is due to the fact that the cryptocurrency's infrastructure and ecosystem aren't as robust as those of mainstream trading.A process to purchase bitcoin consists from four steps: choosing an appropriate location or service for purchasing, connecting with an option for payment, placing an orderand providing an appropriate storage space for your cryptocurrency. Each step involves a lot of research and careful analysis of both the pros and advantages of each one. You can also purchase bitcoin through Bitcoin ATMs, as well as from payment services like PayPal? and mainstream brokerages like Robinhood.