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The process of investing in Bitcoin (BTCUSD) can seem complicated, but it's easier to understand if you divide it up into smaller steps. In order to invest or trade Bitcoin only requires the creation of an account on a service or an exchange, although other safe storage practices are suggested.There are several things that future Bitcoin investors need: a cryptocurrency exchange account in addition to personal identification documents when you use the Know Your Customer (KYC) platform an encrypted connection to the Internet and a means of payment. It is recommended to keep your own personal wallet that is separate from the exchange account. Acceptable payment methods for this approach include bank accounts including debit cards, banks, and credit cards. You can also get bitcoin at specialized ATMs and also through P2P exchanges.KEY TAKEAWAYSIts value Bitcoin is due to its usage as a store of value and payment method in addition to its limited supply as well as the decreasing inflation.While it's nearly impossible to allow Bitcoin itself to be compromised, it is possible for your wallet or exchange access to your account be altered. This is why taking care of proper safe storage and security measures is vital.* You can also purchase bitcoin through the main services like PayPal? or Robinhood.* One method of owning bitcoin is to invest in businesses with bitcoin in their balance sheets.Before You Buy BitcoinSecurity? and privacy are key issues for Bitcoin investors. Anyone who gains the private key to the public address using the Bitcoin blockchain can authorize transactions.1 Private keys must be kept hidden from thieves, as they could try to take them away when they discover huge assets. Be aware that anyone may look up the balance for a public address that you have. But the upside to this information being public is that it allows an individual to have multiple addresses public for themselves. They can then distribute their wealth of Bitcoin across multiple addresses. A good strategy is to store large amounts of money at public addresses that aren't directly linked to those which are used for transactions.Anyone is able to view a historical record of transactions made on the blockchain, even you. While transactions are recorded publicly on the blockchainsystem, identifying individuals' personal details isn't. For the Bitcoin blockchain only the public key is shown next to the transaction. This means that transactions are secure but not untraceable. In that sense, Bitcoin transactions are more transparent and trackable than cash , since all of transactions are public review, in contrast to private cash transactions. But Bitcoin transactions also have certain aspects of anonymity built as part of their design. It's extremely difficult to find the transacting parties--i.e. the receiver and sender of bitcoin--through the blockchain used by the cryptocurrency.Researchers from around the world and the FBI have said they are able to monitor transactions on the Bitcoin blockchain and connect them to other online accounts, which includes their digital wallets.2 For instance, if you create an account on Coinbase you must supply their identification.3 This means that when that person purchases bitcoin, it is linked to their account. When they transfer it to the other account, it's possible to be traced to the Coinbase purchase , which is linked to the identity of the account holder. This should not concern most buyers since Bitcoin has been legalized in U.S. and most other developed nations.It is important to know whether there are any legal or regulatory, and tax consequences of purchasing and selling bitcoins in the area you reside prior to completing transactions.Buying BitcoinWe? have laid out the steps to purchasing bitcoin in the following steps. It is important do your research to pick the right option to suit your needs.Step 1: Choose a cryptocurrency trading service or venueThe first step in buying bitcoin is selecting a crypto trading company or venue. Most popular venues and trading services to buy cryptocurrency include transactions, payment options, and brokerages. The cryptocurrency exchanges are by far the most convenient alternative because they have a wide range of features and currencies for trading.Registering for a cryptocurrency exchange allows you to purchase, sell, and keep cryptocurrency. It is generally best practice for an exchange to make use of one that allows its users to withdraw cryptocurrency into their secure online wallet for their personal. If you're planning to trade Bitcoin or other cryptocurrencies, this feature could not be of any importance.There are numerous types or cryptocurrency exchanges. Because the Bitcoin philosophy is one of personal sovereignty and decentralization, certain exchanges permit users to remain anonymous and don't make users fill out the personal details of their users. Such exchanges operate autonomously and are typically decentralized, so they don't have a central point of control.<img width="454" src="">While these systems are able to serve harmful purposes, they also provide benefits to the global population without banks. For certain categories of individuals, like refugees or those who live in countries which have little or no infrastructure for government credit or banking, anonymized exchanges can in bringing them into the mainstream economy.The moment is, however, that all of the top exchanges in the world are decentralized and adhere to laws that make users submit identifying documentation. For instance, in the United States, these exchanges comprise Coinbase, Kraken, Gemini, FTX, and Binance.US Just to name a few. The exchanges have seen a significant increase in the number of options they offer.The cryptocurrency world has grown rapidly in the last 10 years with numerous new tokens seeking investor dollars. With the exception of Bitcoin and a few of the more well-known ones like Ethereum However, not all these coins are sold on all exchanges. Each exchange has different criteria for determining whether it is appropriate to include or exclude trading of certain tokens.Coinbase, Kraken, and Gemini provide Bitcoin and a broader range of altcoins. These three are likely to be one of the most simple on-ramps that crypto has in the whole market. Binance is designed for the more advanced buyer, offering more sophisticated trading options and greater variety of cryptocurrency options. FTX has been a rapid-growing crypto exchange that has an investment of multibillion dollars, offers a restricted number of altcoins to U.S. investors.4 However, traders outside within the U.S. have a greater variety of coins available on its platform.The most important thing to remember when setting up an account on a cryptocurrency exchange is the need to employ secure Internet procedures. This includes two-factor authentication . lengthy, unique password that includes a range of lowercase letters, capitalized letters, special characters, and numbers.El Salvador made Bitcoin legal tender on September 7, 2021. It was the first nation to do so.5 Bitcoin can be used as a payment method for any transactions in which the business will accept it. The U.S. dollar continues to be El Salvador's main currency.Step 2: Link your Exchange to the payment optionIf you've made a decision to go with an exchange, you'll require your personal documents. The exchange may require these documents, it could be necessary to have photos from a driver's license and/or Social Security card, as and information about your employer and the source of funds. The information you require will depend on the area your home is located in and laws within it. The process is the same as setting up a typical brokerage account.After the exchange has verified the authenticity of your account, you will be required to connect the payment option. At the majority of exchanges, it is possible to can connect your bank account with a single click or connect a credit or debit card. Though you could use a credit card to purchase cryptocurrency, it is not recommended as it could cause volatility in the overall cost of purchasing the coin.Bitcoin is legal in United States, but some banks may question or even stop deposits to crypto-related sites or exchanges.6 It's important to research to see if your bank accepts deposits to your preferred exchange.There are various costs for deposits to a bank account such as debit or credit card. You should research fees for each payment method in order to choose an exchange and decide which option is most effectively for you.Exchanges may also charge fees for each transaction. They may charge fixed (if your trading volume is low) or a percentage of the trading amount. Credit card transactions incur an extra processing fee as well as transaction fee.Step 3: Make an orderYou can buy bitcoin (or other cryptocurrency) when you select an exchange provider and connecting the payment option. In recent times, cryptocurrency exchanges have slowly become more mainstream. They have grown dramatically in terms if liquidity and their number of features. Changes in operation at cryptocurrency exchanges parallel the change on the perception of cryptocurrency. A business that was thought to be a fraud or with unreliable practices is slowly turning into an honest one which is attracting the attention of every major player in the world of financial services.Today, cryptocurrency exchanges have become so popular that they're almost the same quality of features as their counterparts from stock brokerages. The cryptocurrency exchanges of today provide an array of different order types and options to invest. Many crypto exchanges have both limit and market orders. A few offer stop-loss and limit orders. Of the mentioned exchanges, Kraken offers the most available order types. Kraken supports market, limit, stop-lossand stop-limit, take-profit, and take-profit limit orders.7In addition to a range of purchase types, exchanges provide methods for setting up indefinite investments, allowing customers to incorporate a dollar-cost average into their preferred investment. Coinbase for instance, lets users set recurring transactions for every day, week or month.8Step 4: Safe storageCryptocurrency and Bitcoin wallets can be the perfect place to keep digital assets in a more secure way. A crypto wallet that is separate from the exchange , and instead in your personal wallet makes sure that only you are the only person who has control over the private key for your funds. This also gives you the option to save your funds from exchanges and eliminate the possibility of your exchange being compromised and losing your funds.While many exchanges provide accounts for users, security isn't their main business. We generally do not recommend making use of an exchange account for large or long-term cryptocurrency holdings.Certain wallets feature more options than others. Some are Bitcoin only, and others are able to hold diverse altcoins. Some wallets are also equipped with the ability to swap one token with another.When it comes time to choose an Bitcoin wallet, you can choose from several options. The first thing you will have to be aware of about crypto wallets is that they are made up of hot wallets (online wallets) and cold wallets (paper or hardware wallets).Hot walletsOnline wallets are also referred to under the term hot wallets. Hot wallets function on devices connected to the internet, such as phones, computers or tablets. This could lead to vulnerability since they create private keys for your coins on devices that have Internet connectivity. Though a hot wallet can be quite convenient in the way that it allows you to access and conduct transactions on your assets quickly, storing your private keys on an Internet-connected device makes it more vulnerable to hack.This may sound farfetched yet hot wallet holders who don't have sufficient security could be at risk of losing money to theft. It's not a rare possibility, and can occur in several ways. For instance, bragging on forums such as Reddit about the amount of bitcoins you've saved up while you have little or the minimum security and stashing it in a hot vault would make sense. The fact is, these wallets may be secured as long as the necessary precautions are in place. Secure secure passwords, 2-factor authentication, and safe Internet browsing should be considered minimum standards.These wallets are perfect for small amounts of crypto as well as cryptocurrency that you are engaged in trading on an exchange. It is possible to compare a hot wallet to a checking account. It is common knowledge to hold only spending money with a check-book account while the majority of your money is in savings accounts or other investment accounts. Similar can be said regarding hot wallets. Hot wallets comprise mobile, desktop, web and exchange accounts custody wallets.As was mentioned earlier, exchange wallets are custodial accounts provided by exchange. The user of this wallet sort is not owner on the personal key to the cryptocurrency in this wallet. In the event of an event to happen where the exchange gets compromised or the account of yours is compromised, you'd lose your money. The phrase "not your key, not your coin" is often used in cryptocurrency forums and communities.Cold walletsA simple description of"cold" wallets is that it is not associated with the Internet so it has significantly lower risk being in danger of being hacked. These wallets are also called offline wallets or even hardware wallets. These wallets store a user's private key in a device that isn't linked to the internet. They also come with software that runs in parallel, so users can access their portfolio without putting their private key in danger.The most secure way to store your cryptocurrency offline is to use a papier wallet. Paper wallets are wallet that you can generate from specific websites. It then produces both private and public keys which can be printed on paper. Access to cryptocurrency from these addresses is only possible if you possess the piece of paper with the private key. Many people laminate these paper wallets , and then store them in safe deposit boxes in their banks or even in a secure at home. These wallets are intended for the highest security and for long-term investments, as you cannot quickly sell or trade bitcoin stored through this method.A more common type of cold type of wallet is the hardware. A hardware wallet is typically a USB drive that is used to store personal keys of the user offline. Such wallets have serious advantages over hot wallets , as they aren't affected by viruses that can infect one's computer. With hardware walletsyour private keys never come into contact with your network-connected computer or other software that is potentially vulnerable. They're also usually open source, which allows the community to verify their security by conducting code audits rather than a firm declaring that they're secure to be used.These are considered to be the most secure method to store your bitcoins or other cryptocurrencies. But they require more technical know-how to set up.An effective way to set your wallets is to set up three things including an exchange account that can be used to purchase and sell items and a hot wallet to store small or medium amounts of crypto they want to trade with or sell and a cold, hardware wallet to store your larger assets for long-term time periods.How to Buy Bitcoin With PayPalYou? can also buy bitcoin through a payment processor PayPal? Holdings, Inc. (PYPL). There are two ways to buy bitcoin with PayPal?. The first , and the most convenient method is to purchase bitcoin through your PayPal? account, which is linked to a payment system, such as a debit card or bank account. The other option is to utilize the balance of an existing PayPal? account to purchase cryptocurrencies from a third party provider. This option is not as easy as the first since very few of the third-party sites allow users to buy bitcoin 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. It is also possible to use your cryptocurrency to purchase goods or services by using"Checkout With Crypto" "Checkout With Crypto" feature.10To open a crypto account through PayPal?, the following information is needed such as name, physical address along with date of birth or tax identification number.11It is not possible to use a credit/debit card to buy Bitcoin through PayPal?. While you are buying the Bitcoin, PayPal? will display a price for the cryptocurrency. However, that price is subject to rapid changes because of the volatility of cryptocurrency markets. It is a good idea to make sure that you have more than the price which you budgeted in your bank account.When you buy bitcoin direct from PayPal? the company earns money off the crypto spread or the difference between the market price of Bitcoin along with its currency exchange USD. The company has a transaction cost for each purchase. The fee is based on the amount in dollars of the purchase. For instance an all-inclusive fee of $0.50 is due for purchases ranging from $100 and $200. In the following instances, the fee will be determined by a percentage percentage of the dollar amount. For example, a fee of 2% of the total value is charged for crypto purchases between $100 to $200.12The main drawback of buying cryptocurrencies via PayPal? is that you are unable to transfer the crypto out of the company's platforms for payment. Therefore, it's possible to transfer the Bitcoin you bought through PayPal?'s bank account to an alternative crypto wallet, or your personal wallet.11Another drawback to using PayPal? is that a small number of online and offline traders permit the use of the payment processor in order to buy payments. eToro is one of the very few online retailers that allow using PayPal? to purchase bitcoins through its platform.13How to Buy Bitcoin With a Credit CardThe? process for purchasing bitcoin with credit cards will be similar to the process when buying it through debit cards or by electronic clearinghouse (ACH) transfers. It is necessary to enter your credit card's details into the exchange or online trading company and also authorize the transaction. In general, however, it is not a good decision to buy bitcoin using credit cards. There are a couple of reasons to this.First, there are https://www.bul-news.com/the-experts-are-getting-crypto-all-wrong/ that do not permit bitcoin purchase with credit card due to the associated processing fees as well as the risk of fraud. This decision may work out for the benefit of consumers. This is since credit card processing is able to add additional charges onto transactions. Thus, in addition to paying transaction fees in the end, you'll be charged with processing costs which the exchange may pass onto you.Another reason is that the purchases made using credit cards are expensive. Credit card issuers treat bitcoin transactions as cash advances and have to charge high-cost fees and rates for these advances. For instance, American Express and Chase both consider purchases of cryptocurrencies as transactions that are cash advances. In other words, if one purchases 100 dollars worth of bitcoin with an American Express card, you are required to pay at least $10 (current cash advance charges for the transactions) and an annual percentage of 25%. Further, the credit card's company also limits your purchases to a maximum of $1,000 in bitcoin transactions per month.14Another method to purchase bitcoin using a credit card is to get an Bitcoin reward credit card. These cards function similar to your typical rewards credit card except they offer rewards in the type of bitcoin. This means that they invest money earned from purchases into Bitcoin. One illustration of an Bitcoin reward card that is a rewards one would be the BlockFi? Bitcoin Rewards Credit Card.15 Be aware that the annual fees for such cards can be high as well as the cost associated with conversion between fiat and crypto currencies.While exchanges like Coinbase or Binance remain among the most popular methods to purchase Bitcoin, they are not the only option.Alternative Ways to Buy BitcoinBitcoin? ATMsBitcoin? ATMs act like in-person bitcoin exchanges. Individuals can insert cash into the machine and then use it to purchase bitcoin. Then, the bitcoin is made available to the online wallets for users. Bitcoin ATMs are becoming increasingly commonplace in recent years. Retail huge Walmart Inc. (WMT) is conducting a test program that offers customers the possibility of buying bitcoin. Coin ATM Radar can help in locating the nearest ATMs.However ATMs can be expensive alternative. There are two fees that are associated with ATM bitcoin transactions such as a transaction fee and an additional fee for conversion of an exchange rate from fiat to bitcoin. Both are quite high as compared to other options. For instance, the world average charge for purchase that Bitcoin ATMs charge is 8.4 percent (of the amount of purchase) and 5.4 percent for sales made at ATMs.16Be aware, however, that Bitcoin ATMs are increasingly required to have government-issued IDs from early 2020.P2P exchangesInstead of decentralized exchanges, that offer buyers and sellers a secure way to communicate as well as facilitate all aspects of the transaction, there are some peer-to-peer (P2P) exchanges which facilitate a faster link between users. LocalBitcoins? is one example of such an exchange. After signing up, users can submit requests to purchase or sell bitcoin. They can also provide details about payment methods, as well as costs. Then, users can look through the list for buy-sell offers to select the trading partners with whom they wish to trade.LocalBitcoins? provides a variety of benefits to the trade. Although P2P exchanges don't provide the same level of privacy as decentralized exchanges do, they offer users an opportunity to shop around to find the most affordable deal. Some exchanges offer rating mechanisms so that their users can review potential trade partners before making any transactions.Mainstream brokeragesA small percentage of the major brokerages offer bitcoin purchase and trading capabilities due to uncertainty about the regulatory status of cryptocurrencies. Robinhood Markets, Inc. (HOOD) which is an app which is popular with investors in retail, is one exchange that offers cryptocurrency trading options. It charges 0% fee for cryptocurrency trades or purchases and makes money from money received for order flow and transferring its trading volume to others trading platforms or brokerages.17The absence of a commission-based fee can be a enticing option for newbies, but there are a couple of catches to that offer. First, Robinhood doesn't have the range of features and the coins offered by some of the top crypto exchanges such as Coinbase. Robinhood has allowed trading on its platform, which supports seven cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, Bitcoin SV, Dogecoin, and Ethereum Classic.18 As a contrast, you can trade more than 100 currencies through Coinbase.19 The exchange also has several types of orders to limit risk and offset losses during trading.The Robinhood platform doesn't have an online wallet. Therefore, if you want to purchase cryptocurrency using Robinhood you'll need take into account additional charges for an online wallet provider.Bitcoin and different cryptocurrency investments aren't protected by insurance from insurance companies like the Securities Investor Protection Corporation (SIPC). In normal brokerages this organization protects against the loss of cash and securities brokerage accounts with a maximum of $500,000, and has a $250,000 cash limit.20 This isn't available to customers at cryptocurrency exchanges. Cryptocurrency exchanges like Coinbase have crime insurance to guard their infrastructure against attacks. However, it does not cover individual customers from password theft.21How to Sell BitcoinBitcoin? can be sold at those same places that you purchased the cryptocurrency, such as cryptocurrency exchanges and P2P platforms. In general, the process of selling bitcoin through these platforms is the same as the procedure for buying it.For instance, you might only be required to click one button and indicate the type of order (i.e. what type of order, whether the cryptocurrency is sold immediately with the highest price available or if it should be sold to be able to limit losses) for the sale. Depending on the market composition and the level of demand at the site and the location, the price at which you can offer Bitcoin could vary. For example, exchanges in South Korea traded bitcoin at the so-called kimchi rate during the upswing in Bitcoin's prices back in 2018.Currency exchanges that trade in crypto charge a proportion percent of the price for crypto as fees. For example, Coinbase charges 2.49% of the total transaction amount as fees.22Exchanges generally have daily and monthly withdrawal limitations. Thus, cash generated by an extensive sale may not be readily available to the trader. There aren't limits on the amount of bitcoin you can sell, however.What Are the Steps for Purchasing Bitcoin?The process for purchasing bitcoin is made up from four phases: deciding on the right venue or exchange to make your purchase in, choosing a payment method and ensuring that your data is safe for your purchase. According to the choice made in the first section, there may be additional steps in the process. In the case of Robinhood, for instance, if you purchase the cryptocurrency through Robinhood you may need to take into account additional costs for an online account as well as custody of your bitcoin , as Robinhood does not provide these services.What Are the Most Popular Venues for Buying Bitcoin?The most widely used venues to buy bitcoins are exchanges, brokerages (crypto and mainstream) and payment service such as PayPal?. You can also purchase Bitcoin through P2P marketplaces. In the case of indirect ownership of bitcoin you can also invest in companies that hold bitcoin on their books of accounts, such as Tesla, Inc. (TSLA) or MicroStrategy? Incorporated (MSTR).2324How Much Should I Expect to Pay to Purchase Bitcoin?Typicallythe cost for buying bitcoin includes the cost of trading plus the cost of changing a non-fiat currency (generally dollars) to bitcoin. (Cryptocurrency exchanges and payment services make money on this conversion spread.) A fee for each trade is a function of the dollar value of the trade. The larger the amount of the trade will bring higher costs. The cost of the purchase is contingent upon the features offered by the site. For example, Robinhood does not currently offer an online bank account for keeping bitcoin. Thus, you'll have to budget for the costs of a wallet online for your purchase.Besides Cryptocurrency Exchanges, Where Else Can I Buy Bitcoin?You can also purchase bitcoin at these locations:* Through Bitcoin ATMs* With online payment services like PayPal?* At mainstream brokerages like RobinhoodIs? My Bitcoin Purchase Protected by SIPC?No, your bitcoin transaction is not covered by SIPC.20 In certain exchanges, like Coinbase that accept fiat funds, balances on individual accounts could be insured by the FDIC at $250,000 per account.21The Bottom LineThe? process of buying bitcoin is a bit more complex than the process to buy traditional equity or stocks. This is due to the infrastructure and ecosystem for cryptocurrency is not as well-developed as those of mainstream trading.A bitcoin purchase process consists of four steps: choosing the service or the location of making the transaction, connecting to a payment option, placing the order, and also ensuring that your purchase is safe in cryptocurrency. Each step requires research and a careful analysis of the pros and pros of each option. You can also buy bitcoin through Bitcoin ATMs, or through payment services like PayPal? as well as traditional brokerages such Robinhood.