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The process of investing in Bitcoin (BTCUSD) may seem complex, but it's much easier when you simplify it by smaller steps. Trading or investing in Bitcoin just requires access to a bank account or exchange, but other safe storage practices are advised.There are many things potential Bitcoin investors require the following: a cryptocurrency account along with personal identification documentation to use an Know Your Customer (KYC) platform and a secure connection to the Internet and a means to pay. It is also suggested that you keep a private wallet separate from your exchange account. The most reliable methods to pay using this approach include bank accounts credit cards, debit cards, and credit cards. It is also possible to access bitcoin ATMs at special locations and also through P2P exchanges.KEY TAKEAWAYS"The price of Bitcoin is derived from its usage as a store of value, as well as a payment method and its finite supply as well as its decreasing inflation.It is almost impossible for Bitcoin itself to be compromised yet, it's possible for your wallet or exchange account to get compromised. https://www.comoqueporque.com/what-are-prime-5-cryptocurrencies-other-than-bitcoin/ 's why proper storage and security measures is vital.You can also purchase bitcoin through the main services like PayPal? or Robinhood.A way to buy bitcoin indirectly is by investing in companies that hold bitcoin on their balance statements.Before You Buy BitcoinSecurity? and privacy are essential aspects when it comes to Bitcoin investors. Anyone who gains the private secret key to a public address that is on the Bitcoin blockchain is able to authorize transactions.1 Private keys should be kept private as criminals could attempt to take them away should they learn of massive holdings. It is important to be aware that anyone can view the balance of a private address you've registered. The other side of this is that the user can have multiple addresses public for themselves. This allows them to spread their stash of Bitcoin across several addresses. A great strategy is to invest large amounts at public addresses that aren't directly connected to addresses that are used in transactions.Anyone can look up a history of transactions performed on blockchain -- even you. While transactions are recorded publicly on the blockchain, identifying individual information about the user isn't. For the Bitcoin blockchain it is the only place where a private key appears in an activity, which makes transactions secret however not completely untraceable. In that way, Bitcoin is more transparent as well as traceable in comparison to cash, as all of they are accessible for public analysis, unlike private transactions. But Bitcoin transactions also have certain aspects of anonymity built into the design. It is very difficult to trace the transacting parties--i.e. the recipient and the sender of bitcoin--through the blockchain used by the cryptocurrency.International researchers as well as the FBI claim they are able track transactions done on the Bitcoin blockchain and connect them to various online accounts, including their digital wallets.2 As an example, if someone registers on Coinbase the account holder must verify their identification.3 This means that when that buyer buys bitcoin, that is linked to their account. If they transfer the money to an alternative wallet, it could be traced to the Coinbase purchase which is tied to the identity of the account holder. This shouldn't worry most buyers since Bitcoin is legal in the U.S. and most other developed nations.Be sure to research what is legal, regulatory and tax consequences of purchasing and selling bitcoin based on where you live prior to transacting.Buying BitcoinWe?'ve broken down the steps to buying bitcoin below. You should remember study the options thoroughly and decide on the best option for your circumstances.<img width="395" src="">Step 1: Select a crypto-trading service or venueThe first step in buying bitcoin is to choose a crypto trading site or a location. Some of the most well-known trading platforms and venues for buying cryptocurrency include exchanges, payment services and brokerages. In the list, cryptocurrency exchanges offer the most practical choice due to the fact that they provide a range of features, and even more exchanges using cryptocurrencies.By signing up to a cryptocurrency exchange lets you buy, sell, or hold cryptocurrency. It is generally recommended to select an exchange provider that allows users to withdraw crypto into their personal online wallets to ensure the safety of their. For those seeking to trade Bitcoin or other cryptocurrency, this feature may not matter.There are several kinds and types of crypto exchanges. Because the Bitcoin ethos is about independence and personal sovereignty, some exchanges allow users to remain anonymous and do not demand that users enter personal information. Such exchanges operate autonomously and are usually decentralized meaning they don't have a central source of control.Although these systems can serve malicious purposes, they also provide benefits to the world's unbanked population. In certain cases, people who are refugees or those living in countries with no infrastructure for credit from the government or banking--anonymous exchanges may help bring them into the mainstream economy.The moment is, however, that most popular exchanges are not decentralized and adhere to laws that have users provide identification documentation. Within the United States, these exchanges comprise Coinbase, Kraken, Gemini, FTX, and Binance.US There are many others to mention. These exchanges have grown dramatically in the variety of features they provide.The cryptocurrency world has grown quickly in the past decade with a multitude of new tokens which are competing with dollars from investors. With the exception of Bitcoin and some prominent coins like Ethereum some of these tokens are offered on all exchanges. Each exchange has its own set criteria that determine whether they will include or restrict trading of certain tokens.Coinbase, Kraken, and Gemini offer Bitcoin and a steady stream of altcoins. These three are likely to be the most accessible on-ramps into crypto in the entire market. Binance is for an advanced traderand has higher-quality trading features as well as more diverse altcoin choices. FTX is a fast-growing cryptocurrency exchange that has achieved the highest valuation in terms of dollars per share, has limited number of altcoins for U.S. investors.4 However, those who are not from within the U.S. have a greater choice of tokens on its platform.One thing you should remember when setting up accounts with cryptocurrency exchange companies is the need to employ secure Internet practices. This means two-factor authentication, as well as A long, unique password that includes lowercase and capitalized letters, special characters, and numbers.El Salvador made Bitcoin legal tender on September 7, 2021. The country was the first to do so.5 Bitcoin is able to serve as a currency to pay for transactions where a business can take it. This is why the U.S. dollar continues to remain El Salvador's currency of choice.Step 2. Attach your swap to the payment optionOnce you've decided on an exchange, you will be required to gather your personal documents. It is contingent on the exchange. it could be necessary to have photos of a drivers license or Social Security card, as in addition to information about your employer and source of funds. The information you require may depend on where you reside and the laws in it. It's basically the same as opening a traditional brokerage account.Once the exchange has confirmed your identity, you'll be asked to join with a payment option. For most exchanges, you can connect your bank account straight away or you can connect a credit or debit card. While you are able to use a credit card to buy cryptocurrency, it is not a wise choice because it could cause volatility in 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 make sure that your bank is able to accept deposits at your chosen exchange.There are various charges associated with payments made via bank accounts, debit, or credit card. It is essential to study the costs for every payment method to help pick an exchange option or select which one is best for you.Exchanges also charge fees per transaction. These fees can either be a flat fee (if your trading volume is minimal) or part of the transaction amount. Credit card transactions incur a processing fee in addition to the transaction costs.Step 3: Make an orderBitcoin can be purchased (or other cryptocurrencies) after choosing an exchange as well as connecting to a payment option. In recent times crypto exchanges have slowly been gaining popularity. They have seen a significant increase in terms of their liquidity and their array of features. The operating changes that have occurred at bitcoin exchanges are similar to the change on the perception of cryptocurrency. One industry that was believed to be a scam or with questionable methods is slowly evolving into an established one that has attracted attention from the top players in the world of financial services.These days, cryptocurrency exchanges have progressed to the point where they offer the same degree of functionality as their counterparts from stock brokerages. They offer a number of order types as well as ways to invest. Many crypto exchanges have both market and limit orders. Some also offer stop-loss-orders. From the above exchanges, Kraken offers the most sorts of orders. Kraken lets you place market, limit, stop-lossand stop-limit taking-profit, and take-profit limit orders.7Apart from offering a variety of different types of orders, exchanges provide the option of setting up the possibility of recurring investments. This allows customers to integrate a dollar cost average into their chosen investments. Coinbase is one example. It lets users make recurring purchases for each day, week, or month.8Step 4: Secure storageCoins and crypto wallets provide the ideal way to store digital assets more securely. Being able to store your cryptocurrency away from the exchange but in the private wallet of your wallet ensures only you control the private key to your account. This gives you the option to save your funds out of an exchange. This will help you avoid the possibility that your exchange is hacked and the loss of your funds.Though most exchanges provide clients with wallets, security isn't their main business. We generally do not recommend the use of exchange wallets for significant or long-term investments in cryptocurrency.Certain wallets come with more options than other wallets. Some are Bitcoin only, and some provide the capability to store multiple types of altcoins. Some wallets also provide the ability to swap one token for another.When you're trying to decide on a Bitcoin wallet, you can choose from several options. First, you'll need to learn about crypto wallets is hot wallets (online wallets) and cold wallets (paper or physical wallets).Hot walletsThese wallets may also be referred to as hot wallets. Hot accounts run via Internet-connected devices, including phones, computers or tablets. The risk of vulnerability is that these wallets produce private keys for your coins on these devices with Internet connectivity. Although a digital wallet can be extremely convenient in the method that you can get access to and transactions made with your assets quickly, storing your private key via an Internet-connected device could make it more susceptible to a attack.This may sound ridiculous however, hot wallet owners with inadequate security have the possibility of being robbed of their funds. It's not a rare occurrence, and it can occur in a variety of ways. For instance, boasting in a public forum, like Reddit about how much bitcoins you've stored while you're using very little to no security and keeping it in a hot bank account would not be prudent. In reality, the wallets can be made secure so long as precautions are taken. Strong logins that require two authentication and secure Internet browsing are essential requirements.These wallets can be used when you have a small amount of cryptocurrency or currency you are active trading on exchanges. You can think of a hot wallet to a checking account. Conventional financial wisdom would say not to place money you use in a savings or checking account, but most of your money is in savings account or other investment accounts. Similar can be said regarding hot wallets. Hot wallets consist of mobile, desktop, web and exchange account custody wallets.As we have mentioned before, exchange wallets function as custodial accounts supplied by exchanges. The user of this wallet form is not holder for the secret key for the cryptocurrency that is held in the wallet. If an event should happen where the exchange gets compromised or the account of yours is compromised, it would be lost your funds. The phrase "not your key, not your coin" is often frequented in cryptocurrency forums and communities.Cold walletsThe simplest description of a cold or cold-weather wallet is that it is not tied to Internet so it has a far lesser risk of being compromised. These wallets can be known as offline wallets or hardware wallets. These wallets save a user's private key on something but isn't connected the internet. They are also equipped using software that works in parallel so that the user can look at their portfolio without putting their private keys at risk.The most secure way to save cryptocurrency offline is by using a physical wallet. A paper wallet is a wallet that you can create by visiting certain websites. It generates both public and private keys that you print on paper. Access to crypto currency in these wallets is only possible if you possess the piece of paper that contains the private key. A lot of people laminate their wallets in paper and put them in safe deposit boxes in their banks or in a safe in their home. These wallets are designed to be the highest security and for long-term investments, as they are not able to quickly sell or trade bitcoin stored such a way.The most popular type of cold money wallet is a hard-copy wallet. A hardware wallet is typically an USB drive device that stores the user's private keys offline. These wallets offer significant advantages over hot wallets , as they aren't affected by viruses that could infect one's computer. With hardware walletsyour private keys are not in contact with your computer's network or any software that may be vulnerable. The majority of these devices are open source, allowing the community to verify the safety of these devices by performing codes audits rather than a company claiming that they are secured to work with.The cold wallet is the best and most safe method of keeping your bitcoin or other cryptos. But they require more technical understanding to setup.A great way to set up your wallets is by having three items one of which is an exchange bank account for trading and buying an exchange account, a hot bank account to keep small to moderate amounts of cryptocurrency you wish to trade or sell or trade, and a cold wallet to store larger holdings to last for a long time.How to Buy Bitcoin With PayPalBitcoin? can also be purchased through the payment processor PayPal? Holdings, Inc. (PYPL). There are two options to buy bitcoin through PayPal?. The first , and the most convenient method is purchasing cryptocurrencies by using your PayPal? account, which is linked with a payment instrument like a cash card or debit card. The other option is to use the balance on one's PayPal? account to purchase crypto by a third party. This option is not more convenient than the first because a few sites allow users to buy bitcoin by clicking Paypal. 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 buy products as well as services via PayPal?'s "Checkout With Crypto" feature.10To establish a Crypto account through PayPal?, the following information is needed for registration: name, physical address and birth date plus tax identification number.11It isn't possible for a credit card to buy Bitcoin through PayPal?. In the course of purchasing, PayPal? will display a price for the cryptocurrency. But , the price can be subject fluctuation due to the fluctuation of markets for cryptocurrency. It is a good idea to ensure that you've got more than the price you planned for the purchase in your bank account.If you purchase bitcoin straight through PayPal? it earns you money on the crypto spread or the variance between Bitcoin's current market price along with its currency exchange with USD. PayPal? may also charge an transaction cost for every purchase. The fees are based on the amount in dollars of the purchase. For example there is a flat rate of $0.50 is assessed for purchases between $110 to $200. After that, fees are in the form of a percentage of total dollar amount. For instance, a charge of 2% of the purchase price is charged for crypto purchases between $100 to $200.12One of the disadvantages of buying cryptocurrency through PayPal? is that you are unable to transfer the cryptocurrency outside of the transaction processor's network. Therefore, it is not possible for you to transfer your bitcoin purchase from PayPal?'s wallet to any other crypto account, or your personal wallet.11The other disadvantage of using PayPal? is that very few trader and exchanges accept you to make use of the payments processor to purchase payments. eToro is among the few online marketplaces that allow users to use PayPal? to buy bitcoin on its platform.13How to Buy Bitcoin With a Credit CardThe? procedure of purchasing bitcoin with credit card follows the same procedure when buying it through debit cards as well as through the automated clearing house (ACH) the transfer. The buyer must enter your credit card's information into the online trading or exchange company, and then you can authorize the purchase. In general, however, it's not a great idea to make purchases with bitcoin credit cards. There are a few reasons for this.First, there are some exchanges that do not permit bitcoin purchase with credit card due to processing charges and the risk of committing fraud. This decision may work out in the best interests of customers. This is because credit card processing will add additional charges onto transactions. So, in addition paying transaction fees you'll be left with processing fees that an exchange could charge you.Another reason is that credit card purchases can be costly. Issuers of credit cards view bitcoin purchases as cash advances, and charge substantial fees and rates for advances. For example, American Express and Chase both consider cryptocurrency purchases as cash advance transactions. Thus, if you purchase $100 worth worth of bitcoin using an American Express card, you must pay $10 (current cash advance charges for these transactions) and an annual percentage rate of 25 percent. Furthermore, the credit card firm also limits you to $1,000 worth of bitcoin purchases per month.14A more indirect way of purchasing bitcoin with a credit or debit card is to get an Bitcoin reward credit card. Such cards function like your typical rewards credit , but they offer rewards in the Bitcoin form. So, they invest the cash-back earned from purchases into Bitcoin. One illustration of a Bitcoin loyalty card, which is also known as the BlockFi? Bitcoin Rewards Credit Card.15 Take note, however, of the fact that annual fees for such cards can be high and there could be additional costs associated to the conversion of fiat currencies in crypto.While exchanges like Coinbase and Binance remain among the most used methods to purchase Bitcoin, they are not the only choice.Alternative Ways to Buy BitcoinBitcoin? ATMsBitcoin? ATMs act like in-person bitcoin exchanges. Customers can put cash into an ATM and use it to purchase bitcoin. Bitcoin is then sent to digital wallets of users. Bitcoin ATMs have been more frequent in recent years. Even the retail large Walmart Inc. (WMT) is testing a trial program that will give customers the option of buying bitcoin. Coin ATM Radar can help to track down the closest machines.However, ATMs are an expensive alternative. There are two fees that are associated with ATM bitcoin purchases in the form of a purchase fee as well as an exchange fee to convert cash to bitcoin. Both of these fees are quite expensive compared to those of other options. In the case of Bitcoin, for instance, the average fee for transactions of Bitcoin ATMs is 8.4 percent (of the amount of purchase) and 5.4 percent for sales at ATMs.16Be aware that Bitcoin ATMs are increasingly required to have Government-issued IDs starting in 2020.P2P exchangesWhile decentralized exchanges are able to match sellers and buyers anonymously and allow for all aspects of the transaction, there are peer-to-peer (P2P) exchange services which provide a direct connection between the users. LocalBitcoins? is one such exchange. Once an account has been created, customers can post their requests to buy or sell bitcoin. They can also provide details about payment methods and prices. After that, they can browse through the lists for buy-sell offers to select the trading partners with whom they want to transact.LocalBitcoins? can facilitate certain aspects of the trade. While P2P exchanges may not provide the same protections as decentralized exchanges, they give users the chance to shop around to find the most affordable deal. Some of these exchanges have rating systems that allow users to are able to review prospective trade partners prior to committing.Mainstream brokeragesThe majority of brokerages do not offer bitcoin trading and purchase capabilities due to the uncertainty surrounding the regulation status of crypto currencies. Robinhood Markets, Inc. (HOOD) is an application that is popular among retail investors, is an exchange that provides the ability to trade in crypto. It charges no commission for cryptocurrency trades and purchases , and earns money from the transaction flow that it receives, passing its trading volume onto the other platforms for trading or brokerages.17The absence of a commission-based fee is a tempting option in the beginning, but there are some issues with that. Primarily, Robinhood does not have an array of features and coins provided by prominent cryptocurrency exchanges like Coinbase. Robinhood had made trading possible on its platform, which supports seven cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, Bitcoin SV, Dogecoin, and Ethereum Classic.18 Contrary to Coinbase, you can exchange more than 100 cryptocurrency with Coinbase.19 It also has various order types in order to limit risk and offset losses during trading.The Robinhood platform does not have an online wallet. Therefore, if you intend to buy cryptocurrencies on Robinhood then you'll have to take into consideration additional expenses for an online wallet provider.Bitcoin and other cryptocurrency investments aren't secured by insurance provided by The Securities Investor Protection Corporation (SIPC). At regular brokerages, the insurance company protects against the loss of cash and securities in brokerage accounts with up to $500,000and a $250,000 cash limit.20 This service isn't accessible to clients at cryptocurrency exchanges. Cryptocurrency exchanges such as Coinbase have crime insurance to protect their infrastructure against hacks. But , this type of insurance cannot protect individual customers from password theft.21How to Sell BitcoinYou? can sell bitcoin at similar places to where you bought the cryptocurrency including cryptocurrency exchanges, and P2P platforms. Usually, the process of selling bitcoin through these platforms is similar to purchasing it.For example, you may only have to press in a button to specify an order type (i.e. that you must specify whether the cryptocurrency should be sold instantly at the current price or if the sale should be made to limit losses) to make the sale. Based on the composition of the market and the demand at the location the price of offering for Bitcoin can vary. As an example, the exchanges in South Korea traded bitcoin at Kimchi's premium, also known as the rise in bitcoin prices back in 2018.Coinbase and other cryptocurrency exchanges charge a certain percentage of the amount sold 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 limitations. Thus, cash from an extensive sale may not be immediately available to the seller. There aren't any limitations on the amount of cryptocurrency you are able to sell however.What Are the Steps for Purchasing Bitcoin?The process to purchase bitcoin is made up of 4 steps: choosing an exchange or a location for your order choosing a payment method in order to secure the storage for your cryptocurrency purchase. According to the location chosen in the very first step, there may be additional steps involved in the procedure. For instance, if, for example, you purchase the cryptocurrency from Robinhood you might need to factor in additional costs for an online wallet or custody of your bitcoin because it does not offer these services.What Are the Most Popular Venues for Buying Bitcoin?Most popular locations for buying Bitcoin are cryptocurrency exchanges brokering companies (crypto and mainstream) and payment service like PayPal?. It is also possible to purchase Bitcoin through P2P platforms. In order to acquire bitcoin in indirect form you can 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?Typically, the cost of buying bitcoin is the fee for each trade as well as the cost for converting a foreign currency (generally dollars) to bitcoin. (Cryptocurrency exchanges and payment providers earn revenue on this conversion spread.) The price per trade is a function of the dollar amount of the trade. A larger trade volume will carry higher fees. The total cost for purchase depends on the services offered by the store. For instance, Robinhood does not currently offer an online wallet service for the storage of bitcoin. This means that you'll have to budget for expenses for an online wallet purchase.Besides Cryptocurrency Exchanges, Where Else Can I Buy Bitcoin?You can also buy bitcoin at these places:* Through Bitcoin ATMs* Through online payment services like PayPal?* At mainstream brokerages like RobinhoodIs? My Bitcoin Purchase Protected by SIPC?It's true that your purchase made with bitcoin is not covered by SIPC.20 In certain exchanges, such as Coinbase accounts, the balance of your fiat in individual accounts may be FDIC-insured to the tune of $250,000 per account.21The Bottom LineThe? process for purchasing bitcoin is more involved than purchasing the stock or equity that you normally purchase. This is due to the ecosystem and infrastructure for bitcoin are not as well developed similar to the one used in traditional trading.A bitcoin purchase process consists from four steps: choosing an option or a place to make the purchase, connecting with the payment method of your choice, placing an order, as well as ensuring that your purchase is safe in cryptocurrency. Each step requires extensive research and careful assessment of the pros and cons of each service. You can also purchase bitcoin through Bitcoin ATMs, as well as from payment services such as PayPal? and more traditional brokerages like Robinhood.