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Investments in Bitcoin (BTCUSD) might seem complicated, but it is much simpler if you breakdown the process into steps. Trading or investing in Bitcoin only requires an account at a third party or exchange, however additional storage methods that are safe are advised.There are a number of things hopeful Bitcoin investors need such as a cryptocurrency exchange account in addition to personal identification documents for those who use a Know Your Customer (KYC) platform along with a safe connection to the Internet and a method of payment. It is also suggested that you use your own personal account outside of the exchange account. Alternative payment options for these options include bank account along with debit cards and credit cards. It is also possible to get bitcoin at specialized ATMs and P2P transactions.KEY TAKEAWAYSIts value Bitcoin is due to its use as a store of value as well as a payment system in addition to its limited supply and declining inflation.It is almost impossible for Bitcoin itself to be compromised in the event of a hack, it's nevertheless possible for your exchange or wallet bank account to have been compromised. That's why using secure protection and storage measures are essential.You can also purchase bitcoin using mainstream services like PayPal? as well as Robinhood.* One method to hold bitcoin is to invest in businesses with bitcoin on their balance statements.Before You Buy BitcoinSecurity? and privacy are essential issues for Bitcoin investors. Anyone who obtains the private password to a publicly accessible address on the Bitcoin blockchain can authorize transactions.1 Private keys must be kept secret as criminals may try to take them away should they learn of massive holdings. You should be aware that anyone is able to see the balance of a publicly accessible address. But the upside to this information being public is that an individual can set up multiple public addresses for themselves. This means they can spread their wealth of Bitcoin across multiple addresses. The best strategy is to protect investments that are significant at public addresses that are not directly connected to ones that are used in transactions.Anyone can check the history of transactions on the blockchain -- even you. Though transactions are publically documented on the blockchainplatform, identifying personal information of the user isn't. When using the Bitcoin blockchain there is only one public key is recorded next to any transaction. This makes transactions safe but not confidential. However, transactions are not. In that way, Bitcoin is more transparent as well as traceable than cash due to the fact that all of them are available for public viewing, in contrast with private cash transactions. However, Bitcoin transactions also come with an element of anonymity built inside their code. It's very difficult find the transacting parties--i.e., both the parties who are sending and receiving the bitcoin--on the cryptocurrency's blockchain.Researchers from around the world and the FBI have claimed to be able verify transactions carried out on the Bitcoin blockchain to users' various online accounts, including their digital wallets.2 For example, when someone creates an account on Coinbase and then registers, they need to show their identification.3 When that buyer buys bitcoin, that is linked to the account holder's name. When they transfer it to another account, it can be traced back the Coinbase purchase tied to the identity of the account holder. This should not be a concern for the majority of buyers since Bitcoin has been legalized in U.S. and most other advanced countries.Check out the legal, regulatory and tax implications of buying and selling bitcoin where you live prior to doing any transaction.Buying BitcoinWe?'ve laid out the steps to buying bitcoin below. Remember that you still need to do your research and decide on the best option according to your situation.Step 1: Select a crypto trading company or venueThe first step to purchase bitcoin is choosing an exchange service that is crypto-related or a location. A variety of popular services and venues for buying cryptocurrencies are cryptocurrency exchanges, payment services, and brokerages. The cryptocurrency exchanges are the most reliable option since they come with a variety of features and than cryptocurrencies to trade.When you sign up with a crypto exchange lets you buy, sell, or hold crypto. It is usually best to use an exchange that allows users to withdraw crypto into their personal online wallet for safekeeping. When it comes to trading Bitcoin or other cryptocurrencies, this feature isn't crucial.There are https://www.chanelnavi.com/why-should-you-business-in-cryptocurrency/ that offer cryptocurrency exchanges. Since the Bitcoin principle of personal sovereignty and decentralization, some exchanges permit users to remain anonymous and do not require users to enter their personal details. These exchanges operate as autonomous entities and are usually decentralized so they don't have a central source of control.Though these systems can be used for malicious purposes, they also be a source of assistance to the people who are not banked. In certain cases, people who are refugees as well as those living in nations with no infrastructure for government credit or banking--anonymous exchanges may help get them to join the mainstream economy.However, at present, the most well-known exchanges aren't decentralized , and they follow regulations that make users submit identifying documents. If you're in the United States, these exchanges comprise Coinbase, Kraken, Gemini, FTX, and Binance.US just to mention a few. These exchanges have risen significantly in the number of options they provide.The crypto world has grown rapidly in the last 10 years and there are a myriad of new tokens that are competing for dollars from investors. With the exception of Bitcoin as well as a few prominent coins like Ethereum but not all of the tokens listed are on all exchanges. Each exchange has different criteria to determine whether to include or disallow trading of specific tokens.Coinbase, Kraken, and Gemini provide Bitcoin and a rising number of altcoins. These three are probably the most convenient on-ramps to cryptocurrency in the entire industry. Binance is geared towards an sophisticated trader, with more sophisticated trading options and an extensive selection of altcoin choices. FTX has been a rapid-growing crypto exchange that has earned the valuation of a multibillion dollar, provides an exclusive number of altcoins for U.S. investors.4 However, customers outside of these countries 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 it is to utilize secure Internet practices. This includes two-factor authentication . using a long, unique username that includes a wide range of lowercase and capitalized letters in addition to special characters, as well as numbers.El Salvador made Bitcoin legal tender on September 7, 2021. It was the first country to do so.5 Bitcoin can be used as currency for any transaction that a business is able to accept it. It is the U.S. dollar continues to be the currency of El Salvador.Step 2: Then connect the exchange your payment optionAfter you have chosen an exchange, you'll be required to gather your personal documents. Based on the exchange, this could include images of a driver's permit or Social Security card, as well as information about your employer and the source of your funds. Information you'll need may depend on where that you reside in, as well as the regulations within it. It's basically similar to creating a typical brokerage account.After the exchange has verified your identity, you'll be asked to join with a payment option. At most exchanges, you can connect your bank account directly or you can connect a credit or debit card. However, if you want to use a credit card to buy cryptocurrency, it is not a good idea because fluctuation in the price of cryptocurrency can raise the overall cost of purchasing a coin.Bitcoin is legal within the United States, but some banks may be suspicious of or restrict deposits to crypto-related sites or exchanges.6 It's recommended that you check for yourself if the bank you use allows deposits to your chosen exchange.There are various fees associated with deposits via a bank account such as debit or credit card. It is important to learn about the costs for every payment method to help you choose an exchange, or select which one is best for you.Exchanges can also charge fees per transaction. These charges could be one-time fees (if the amount traded is relatively small) or a percentage of the trading amount. Credit cards incur fees for processing, as well as transaction charges.Step 3: Make an orderYou can purchase bitcoin (or other cryptocurrency) by selecting an exchange and connecting to a payment method. In the past few years cryptocurrency exchanges slowly gained more acceptance. They have grown substantially in terms if liquidity and their breadth of features. The changes in the operation of bitcoin exchanges are similar to the change in the way people perceive cryptocurrencies. An industry that was once believed to be a scam or one that was based on questionable practices is slowly morphing into legitimate and has drawn interest from the top players in the financial sector.Now, cryptocurrency exchanges ' offerings have progressed to the point where they're almost the same amount of features as their counterparts with stock brokerages. Today, cryptocurrency exchanges offer several types of orders and investment options. Nearly all exchanges allow both limit and market orders. Some provide stop-loss transactions. Of the mentioned exchanges, Kraken offers the most available order types. Kraken supports market, limit, stoploss stop-limit as well as take-profit and limit orders.7Alongside the variety of order types, exchanges offer ways to set up an investment program that allows investors to apply a cost-per-dollar average to their investment options. Coinbase, for example, lets users set up recurring purchase to be made every day, week or month.8Step 4: Secure storageIn addition, bitcoin and cryptocurrency wallets provide an opportunity to save digital assets in a more secure way. Being able to store your cryptocurrency away from the exchange and inside your personal wallet ensures that only you hold the private key to the funds. Additionally, it gives you the ability to store funds away from an exchange , and reduce the possibility of your exchange being hacked and thereby losing your money.Although the majority of exchanges offer wallets for their customers, security is not their primary business. We generally do not recommend the use of exchange wallets for large or long-term cryptocurrency holdings.<img width="496" src="">Certain wallets have more features than others. Some are Bitcoin only, and some can be used to store various altcoins. Some wallets also offer the possibility of swapping one token for another.If you are looking to select a Bitcoin wallet, you can choose from several options. The first thing you must know about crypto wallets is that they are made up 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 via Internet-connected devices, including computers, phones or tablets. This poses a risk because they generate key to your private coins in these devices connected to the Internet. While a wallet that is hot can provide convenience in the manner it allows you to connect to and perform transactions with your funds quickly, the storage of your private keys using an Internet-connected device may make it more vulnerable to attack.This may sound ridiculous and a bit naive, but wallets that don't put in place enough security run the risk of losing money due to theft. This is a frequent occurrence, and it can occur in a variety of ways. For instance, bragging on a platform such as Reddit about the amount of bitcoins you have in your account when the wallet has little to nothing secure and storing it in a wallet with a high temperature would not be the best idea. However, these wallets may be secured as when precautions are made. Strong encryption, strong passwords and two factor authentication, and safe Internet browsing are the minimum requirements.They are great to store small amounts of cryptocurrency or any cryptocurrency that you're engaging in exchange trading. One could compare a hot wallet to a bank account. Conventional financial wisdom would say to put only money you spend in a savings or checking account, but most of your money is saved in savings or other investments accounts. Similar could be said on hot wallets. Hot wallets consist of mobile, desktop, web and exchange account custody wallets.As was mentioned earlier, exchange wallets are custodial accounts that are provided by exchanges. The owner of this particular type of wallet is not holder on the personal key for the cryptocurrency that is held in this wallet. In the event of an event to happen where the exchange gets hacker-proof or your account is compromised, you'd lose the funds you have invested. The expression "not your key, not your coin" is frequently repeated in cryptocurrency forums and communities.Cold walletsThe simplest description of a cold-wallet is that it isn't in connection with the Internet and therefore stands at significantly lower risk being at risk of being compromised. These wallets can also be called offline wallets or even hardware wallets. They are wallets that store a person's private keys on a device that isn't connected to the internet. These wallets can be fitted with software that works in parallel, so that the user has access to their portfolio , without putting their personal key at risk.The most secure way to save cryptocurrency offline is by using a paper wallet. A paper wallet is a paper wallet that you create from specific websites. It then generates private and public keys which are printed out on a piece of paper. Access to cryptocurrency from these addresses is only possible if you own the piece of document with the private number. Many people laminate these cash wallets with paper and store them in safe deposit boxes in their banks or in a safe at home. These wallets are intended for long-term investments and high security because they are not able to quickly sell or trade bitcoins stored in by this method.The most common kind of cold wallet is a hardware wallet. The typical hardware wallet is made up of a USB drive device that stores users' private keys offline. They have a number of advantages over hot ones since they are unaffected by viruses that could infect one's computer. With hardware walletsyour private keys never come into contact with your computer's network or any software that may be vulnerable. These devices are typically open source, which allows users to assess their security using code audits rather than a company claiming that they are acceptable to make use of.It is believed that cold-money wallets provide the best and most secure storage option for your bitcoin or other cryptos. But they require more technical expertise to setup.An excellent way to set up your wallets is having three things including an exchange account that can be used to purchase and sell items, a hot wallet to store small or moderate amounts of cryptocurrency you want to trade or sell, and a cold hardware wallet to store your larger assets in the long run.How to Buy Bitcoin With PayPalYou? can also purchase bitcoin via the payment processor PayPal? Holdings, Inc. (PYPL). There are two methods to purchase bitcoin using PayPal?. The first and simplest method is buying cryptocurrencies using your PayPal? account, which is linked to a payment device, such as a credit card, bank account or debit card. Another option is to use the balance in your PayPal? account to purchase crypto from a third party provider. This isn't more convenient than the first since only a handful of third-party sites allow customers to purchase bitcoin with 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 the cryptocurrencies you have to buy items or services by using"Checkout With Coin "Checkout With Crypto" feature.10To establish a Crypto account with PayPal? The following information is required such as name, physical address or address, birth date plus tax identification number.11It isn't possible to use a credit card to purchase Bitcoin through PayPal?. When you purchase, PayPal? will display a price for the cryptocurrency. The price, however, is subject changing rapidly due the fluctuation of markets for cryptocurrency. It is a good idea for you to check if you have more than you set for the purchase in your account at the bank.When you buy bitcoin directly through PayPal? the company earns money by selling the crypto spread, or the difference between Bitcoin's market price plus its price of exchange with USD. PayPal? has a transaction cost per transaction. The amount charged is contingent upon the dollar amount of the purchase. For instance an all-inclusive fee of $0.50 is due for purchases ranging from $100 to $200. Following that, it is an amount that is a percentage of the total dollar amount. A typical example is a charge of 2% of the purchase price is charged for crypto purchases between $100 and $200.12One drawback of purchasing cryptocurrency via PayPal? is that it isn't possible to transfer the crypto outside of the transaction processor's network. This means it's not possible for you to transfer your purchased bitcoin through PayPal?'s bank account to any other crypto account or your personal wallet.11Another disadvantage of using PayPal? is that only a few trader and exchanges accept the use of the payment processor for payment. eToro is one of the few online merchants that permit for the usage of PayPal? to purchase bitcoin through its platform.13How to Buy Bitcoin With a Credit CardThe? procedure of purchasing bitcoin with credit card is similar to the one used when buying it through debit or credit cards. You can also purchase it through automatized clearing house (ACH) transactions. The buyer must enter your credit/debit card details to the exchange or online trading company, and then you can authorize the purchase. In general, , it's not a great idea to make purchases with bitcoin credit cards. There are several reasons to this.First of all, some exchanges do not allow bitcoin purchasing with credit cards due to processing charges and the possibility of fraud. This can be in the best interests of the customers. This is since credit card processing is able to charge additional fees to transactions. As a result, instead of paying transaction fees it will also leave you with processing costs which the exchange might pass onto you.The second reason is because purchases made with credit cards can be expensive. Card issuers see bitcoin transactions as cash advances, and charge substantial fees and rates on advances. For instance, American Express and Chase each count cryptocurrency purchases like cash transactions. For instance, if you buy $100 worth of bitcoin on the American Express card, you have to pay $10.00 (current cash advance charge for these transactions) and an annual percentage charge of 25%. Furthermore, the credit card company limits the amount you can spend on bitcoin transactions per month.14Another way to buy bitcoin using credit cards is to use a Bitcoin Rewards credit card. The cards function the same way as your usual rewards credit card but they pay rewards in kind of bitcoin. In other words, they convert the cash-back earned from purchases into Bitcoin. One example of the Bitcoin rewards card could be called the BlockFi? Bitcoin Rewards Credit Card.15 Beware, however, that the annual fees associated with these cards can be very high and could also come with additional charges for the conversion of fiat currency into crypto.While exchanges like Coinbase or Binance remain among the most popular options to purchase Bitcoin however, they're not the only means.Alternative Ways to Buy BitcoinBitcoin? ATMsBitcoin? ATMs act like in-person bitcoin exchanges. Customers can simply insert money into the machine and use it for the purchase of bitcoin that is then delivered to online wallets of users. Bitcoin ATMs have been increasingly commonplace in recent years. Retail company Walmart Inc. (WMT) is testing a trial program that will offer its customers the option to purchase bitcoin. Coin ATM Radar can help locate the closest machines.However ATMs can be expensive option. There are two costs associated with ATM bitcoin purchases which are a purchase charge and the conversion fee when converting cash to bitcoin. Both are quite high when compared to other options. For example, in the world, 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 requiring IDs issued by the government as of 2020.Exchanges P2PContrary to decentralized exchanges, which meet sellers and buyers in a non-public way and make it easy for both parties to the exchange, there are peer-to-peer (P2P) exchanges which offer a more direct relationship between users. LocalBitcoins? is one example of such an exchange. Once they have created an account, users can make requests to purchase or sell bitcoin. The request must include details about payment methods and prices. Then, users can look through the list of buy and sell offers to select the trading partners who they would like to transact.LocalBitcoins? facilitates some aspects of the trade. While P2P exchanges do not have the same protections as decentralized exchanges but they provide users with the opportunity to search for the best deal. A majority of these exchanges have rating systems in place so that buyers are able to review potential trading partners prior to making a transaction.Mainstream brokeragesA few major brokerages provide bitcoin purchasing and trading features because of the uncertainty regarding regulations for cryptocurrencies. Robinhood Markets, Inc. (HOOD), an app very popular among investors from retail, is one of the exchanges that offer crypto-based trading. It charges 0% commission for crypto trades and purchases . It earns its money through payment for order flow, transferring its trading volume to others trading platforms or brokerages.17The non-existence of a commission cost could be a compelling proposition for those just starting out, but there are some downsides to the offer. First, Robinhood can't offer the number of features or coins that are offered by the most prominent crypto exchanges like Coinbase. Robinhood had made trading possible on its platform for seven different cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, Bitcoin SV, Dogecoin, and Ethereum Classic.18 However, Coinbase can trade over 100 cryptocurrencies with Coinbase.19 The exchange also offers various order types to minimize the risk and reduce losses in trading.The Robinhood platform doesn't offer an online wallet. So, if you wish to buy cryptocurrency on Robinhood however, you'll need to factor in additional costs 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). At regular brokerages, the insurance company protects against the loss of cash or securities brokerage accounts with up to $500,000with a maximum of $250,000 cash limit.20 This insurance option isn't accessible to clients at cryptocurrency exchanges. Exchanges for cryptocurrency like Coinbase have crime insurance to protect their infrastructure against attacks. However, it does not guarantee protection for individual customers against password theft.21How to Sell BitcoinYou? can sell bitcoin through the same places where you purchased the cryptocurrency, for instance, cryptocurrency exchanges and P2P platforms. In general, the process of selling bitcoin on these platforms is similar to the process for purchasing it.In this case, for instance, you could only have to press in a button to specify the type of order (i.e. which cryptocurrency will be sold immediately at the best price or it is sold to keep losses to a minimum) to conduct the sale. Based on the composition of the market and demand in the area and the location, the price at which you can offer Bitcoin may differ. For example, exchanges in South Korea traded bitcoin at an alleged kimchi premium in the upswing in Bitcoin's prices in the year 2018.Cryptocurrency exchanges charge a percentage of the cryptocurrency sale amount in fees. For instance, Coinbase charges 2.49% of the total amount for transactions as fees.22Exchanges typically have daily and monthly withdrawal limitations. So, the cash generated from the sale could not immediately be available to the buyer. There aren't any limits to the amount of cryptocurrency you are able to sell however.What Are the Steps for Purchasing Bitcoin?The process of buying bitcoin is comprised of 4 steps: selecting an appropriate exchange or location to make your purchase before deciding on a payment technique and then making sure you have a safe place to store for your cryptocurrency purchase. The type of venue chosen in the first step, there are additional steps required in the procedure. For instance, if you choose to purchase the cryptocurrency through Robinhood it could be necessary to add additional charges for an online wallet or custody for your bitcoin because they do not provide these services.What Are the Most Popular Venues for Buying Bitcoin?The most popular venues for buying bitcoins is through cryptocurrency exchanges and brokerages (crypto along with mainstream) along with payment services like PayPal?. You can also buy Bitcoin via P2P online exchanges. For ownership in bitcoin that is indirect it is possible to be a shareholder in companies who hold the cryptocurrency in their balance sheets, such as Tesla, Inc. (TSLA) or MicroStrategy? Incorporated (MSTR).2324How Much Should I Expect to Pay to Purchase Bitcoin?Typically, the price for buying bitcoin is a fee per trade plus costs to convert a money that is fiat (generally dollars) to bitcoin. (Cryptocurrency exchanges and payment services earn money on this conversion spread.) The price per trade is dependent on its dollar value. trade. The larger the amount of the trade will bring higher costs. The overall purchase cost also will depend on the features offered by the provider. For example, Robinhood does not currently provide an online account for holding bitcoin. Therefore, you'll need to budget for online wallet fees for your purchase.Besides Cryptocurrency Exchanges, Where Else Can I Buy Bitcoin?Bitcoin can also be purchased at the following places:* Through Bitcoin ATMs* Through online payments services like PayPal?* At mainstream brokerages like RobinhoodIs? My Bitcoin Purchase Protected by SIPC?Yes, your bitcoin purchase is not covered by SIPC.20 Certain exchanges, such as Coinbase the balances of fiat currency in individual accounts are FDIC insured to the tune of $250,000 per account.21The Bottom LineThe? process of purchasing bitcoin is more involved in comparison to the purchase of the stock or equity that you normally purchase. This is mainly because the crypto ecosystem and infrastructure aren't as robust as the traditional trading.The bitcoin purchase process is made up of four stages: choosing the appropriate service or place for purchasing, connecting to an acceptable payment method, making an order, then ensuring secure storage for your bought cryptocurrency. Each of these steps will require research and a thorough analysis of the pros and pros of each option. Bitcoin can be purchased through Bitcoin ATMs or by using payment service providers like PayPal? and more traditional brokerages like Robinhood.