A bitcoin investment is robust and longterm. It is because a digital currency could be worth thousands of dollars the reason why bitcoin investment carries a speculative risk. However, when you understand how it works, it’s easier and seems less complicated.
You need a Bitcoin Wallet or a digital wallet to store the bitcoins, personal identification documents, a very secure internet connection, a method of payment, and last but not least, an account at the cryptocurrency exchange. You can use a valid approach to pay such as through a bank account, credit or debit card
Another thing before you begin to invest in bitcoins is to be knowledgeable about the technical and security requirements that you need to make a safe investment. Even though bitcoins are not physical currencies, it is not advisable to brag about large holdings.
Remember that anyone with the private key to a public address in the blockchain can authorize transactions and criminals may target to steal your private key if they learn of significant holdings.
Choose a bitcoin wallet.
You have various options when it comes selecting a bitcoin wallet. There are hardware or software wallets. Hardware wallets are an offline way of storing bitcoins in a hardware device that holds the private keys to the bitcoin address. To send or receive bitcoins you need the device whose pin is also a verification way.
A software Bitcoin Wallet, on the other hand, is a program that stores your private key and allows a connection to your bank account. You can access such a wallet quickly anywhere anytime through an internet connection.
Connect your bitcoin wallet to a bank account
For you to buy bitcoins, you have to connect your digital wallet to a bank account, credit or debit card. Even though all these methods perform the same function, they differ when it comes to transaction fees.
When you connect your wallet to your bank account, you can sell or receive bitcoins and deposit the money into your account directly.
Linking to a debit or credit card allows you to purchase bitcoins instantly. However, when connected to a debit card, you can’t be able to sell bitcoins and deposit the money into your bank account.
Join a bitcoin exchange
Bitcoin exchanges are online trading platforms on which you can trade bitcoins for traditional currencies such as US dollars.
There are various types of bitcoin exchanges to mention but a few:
- Centralized trades: this involves an intermediary who connects you to the buyer or seller of bitcoins. The intermediary controls and is responsible for the security of the exchange.
- Peer to peer trades: here, buyers and sellers trade directly with each other setting their negotiations and profits.
- Instant exchanges: you trade with the service itself where there is a pool of cryptocurrencies that allow instant transactions. You send a coin and receive another currency to a specified address.
Every type of exchange has advantages and disadvantages, and you only need to choose one that suits your needs. You can seek a crypto-security expert to advise on the best for you.
Place your order
After you determine the best type of exchange, you are now ready to buy a bitcoin by placing an order. One bitcoin is worth several thousand dollars but can be divisible into 8decimal points the smallest is called a satoshi. In a case where bitcoin prices hike, you can buy a satoshi for a small fraction of a cent.
That is how to begin your investment in bitcoins.