From an obscure form of digital currency with literally no value, Bitcoin has risen both in popularity and in value. Bitcoin is trading steadily at the $4,200 level with a peak of $5,000 early September 2017. Along with emerging government regulations, a growing number of establishments are now accepting Bitcoins as payment. Some even call it the “fiat of the future” and a “much secure alternative to gold.”
Bitcoin has been on a long journey since those two boxes of Pizza were exchanged for 10,000 Bitcoins, roughly $42 million today. It has an obvious appeal and so much more promise. However, it’s still in the onset of mainstream consciousness.
People who just discovered Bitcoin and the world of cryptocurrencies are sometimes left confused on how it works — which may lead to scams and outright theft. With a decentralized system such as Bitcoin, there is no internal regulating body, resulting to various sources and often conflicting information and thereby adding to the confusion.
For people looking to buy their first Bitcoin, below is a step by step guide.
Step 1: Find the right wallet
Bitcoins has no physical form. Instead balances are kept in a public ledger in the cloud while transactions are verified by an enormous amount of computing power (See: What is cryptocurrency mining and how does it work). These public ledgers often called wallet are mostly available for free but fees for transferring Bitcoins apply.
Different wallets have different features. The features you’ll be needing will depend on how you plan to use your Bitcoins. Nonetheless, for beginners, a Coinbase wallet is highly recommended. It has a user-friendly interface and users can generate multiple wallets for major cryptocurrencies outside Bitcoin.
Coinbase is both a wallet and an exchange, and the most popular of its kind. As of this writing (September 2017), Coinbase has over 10 million users and has processed over $20 billion worth of transactions.
For more advanced users or people looking for a more secure wallet to store their Bitcoins, Electrum is a solid choice.
Electrum is one of the earliest Bitcoin wallets launched. It provides an array of security features including an option to encrypt your wallet on your desktop, a cold storage with offline keys and watch-only online view and compatibility with common hardware wallets.
- Exchange your money (USD/EUR) to Bitcoins
- Start trading or look into merchants accepting Bitcoins as payment