Working as management in the financial industry but currently taking higher-level education in business management and coaching.
Making It Simple
In this article, I want to share with you the three main things you need in order to buy and safely store your Bitcoins. I’ve taken out 90% of the chaff surrounding Bitcoin and boiled it down to the three most basic need-to-know points. I'm writing this because four years ago it took me six months to figure out how to buy some coin (don't laugh). In fact, I gave up and went back three months later to figure it out. Admittedly the Bitcoin world has come a long way, even in that amount of time, but I honestly wish someone had just given me the three main points I need to know.
I’m actually surprised I didn't get scammed. I was really that naive.
Which is one reason I wrote this article. To make sure you fine folk dont get scammed. And believe me, bitcoin scams are all the rage at the minute.
Why Buy Bitcoin?
Before I start this isn't a recommendation to invest in Bitcoin. The question about whether you should buy Bitcoin is something you'll have to work out yourself. But I'm assuming that because you're already here, then you've probably already decided that bit.
Most other "idiot's guides" to Bitcoin will probably switch you off as soon as you start reading. Not because they're poorly written, but because they are overly complicated. Nearly every single one I've read talks about blockchain, nodes, and mining. Most people just don't care about this for the same reason they don't care about how their gold was mined, how their wine was made, or how the limes you bought for your Coke got to your house. So let's just break this down real quick so you can go back to drinking cheap wine in front of the TV!
Step One: Choose An Exchange
Just like buying stocks and shares you’re going to need a middleman. Again, I won't be recommending any exchange in particular in this articl,e but some of the more popular ones are Coinbase, Kraken, Binance, Crypto.com, and Cashapp (if you’re in the US) amongst others.
Creating an account on an exchange is quite similar to creating a stockbroker account in that you have to provide details like social security / National Insurance ID and a scan of your driver's license or passport. This is to ensure that these exchanges are following the relevant financial regulations (they are providing a financial service, after all), and unless you’re planning to launder millions of dollars I wouldn't worry about this. Verification of your ID usually takes under 24 hours.
Once your account has been verified you just need to add your payment details. Again, leaving your card details with an unknown exchange can be scary, but most are now about as legit as they come. Just do your own due diligence and you'll be okay.
Step Two: Buy Bitcoin
Once you're all set up on your chosen exchange it’s merely a matter of selecting the cryptocurrency you want to buy (yes, there are other types of cryptocurrency besides Bitcoin). Simply choose the amount you want to purchase and hit the "buy" button.
It’s worth noting that you don't have to buy Bitcoin in full. You can buy fractions of coins. If you want to test the waters, then just buy a small amount. Once your trust grows you can go back and buy more.
It’s also worth noting that if you want to buy any of the other types of cryptocurrency then you need to fully research them. Not all alternate cryptocurrencies can be sold for US dollars, GPB, or EUR If you need to cash in. Some can only be traded for Bitcoin. This may change in the future, however.
If you want to get the coins you bought moved to your own bitcoin wallet then you'll need the wallet address. This is a long string of random letters and numbers. Just make sure you fully understand what fees and commissions are involved in your exchange. Some might charge fees for purchasing and a fee for transferring.
Step Three: Keep Your Bitcoin Safe
So this part is one of the most important if not the most important part. There are dangers when holding Bitcoin in custodial accounts that most people don't consider. You have to remember that this isn't gold. Gold can't be hacked. It was only in 2014 that a reputable coin exchange called Cryptiopia was hacked and had significant amounts of coins stolen by hackers. And I’m afraid to say this wasn't the only instance of such a thing.
So what do you do?
It’s highly recommended that you buy a hardware wallet. In keeping with the theme of “keeping it simple” for the technologically impaired (like me), a hardware wallet is a small hardware device much like a USB memory card in which you store your bitcoins. This way nobody can access them. You can keep this device on your person, In a safe or under the floorboards.
If you hold any amount of Bitcoin which you can't afford to lose then a hardware wallet is highly recommended. You’ll pay between £60 and £120 for one online.
There are a few other options but I could be just muddying the waters at this point. I would give a mention to apps like Bitpay that turn your phone into hardware wallets. Bitpay allows you to store your Bitcoin on your phone as opposed to an exchange. The phone wallet generates a randomly generated 12-word passphrase in case you lose or break your phone. This phrase will restore the wallet if you need to re-install on another device. I've used these for a while and it's a good alternative to paying £120 on a proper hardware wallet. It's still not 100% secure, since a phone can be hacked, but it's a good choice if you can't justify buying a proper wallet to store £100's worth of Bitcoin.
Yes folks that's it. That the absolute minimum you can do to buy Bitcoin and keep it safe for a rainy day. Of course, I could talk quite a bit more about the technology behind Bitcoin and what the future holds but again, do you really care?
Like most people you want to hedge your bets, buy some coin, and see where it goes.
So by all means dip your toes in and buy a coin or two. Store your coins and come and check on it in 5 years' time. Who knows, You might have enough to buy a Ferrari... or not.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.