Welcome to the wonderful world of bitcoin. By now, you have probably heard about the world’s largest cryptocurrency on the news or through a friend. Supporters talk about it becoming the global currency of the future. So, you might be saying to yourself: I want to be a part of this financial revolution. How do you buy bitcoin?
Well, there’s a long answer and a short answer. Let’s start with the short answer…
Three quick steps to buying bitcoin
Step 1: Find a crypto exchange that offers bitcoin
There are a number of exchanges that will let you trade your funds for bitcoin. One of them is eToro.
STEP 2: Sign up
If you’d like to buy bitcoin through eToro, all you need to do is sign up, link your bank, and transfer funds into your eToro account. From there, you’ll be able to buy and sell bitcoin easily.
Step 3: Buy bitcoin
Bitcoin can be purchased fractionally, so you don’t need to buy a full bitcoin to own some. For example, if bitcoin’s price is $10,000, you can purchase 0.1 bitcoin for $1,000.
Why buy bitcoin on eToro?
- We’re cheaper than other exchanges.
We take zero commissions and charge zero hidden fees.
- You can try before you buy.
We provide a virtual portfolio function, where you can play around in the market with $100k in fake money. This simulates trades and uses real market data.
- You can learn from other traders.
Our social feed is a great way to ask questions and learn about how other traders are approaching the crypto market as a whole.
- It’s a great platform for beginners.
Our simple interface makes buying and selling bitcoin easy and quick.
Ok, now for the long answer. Here we’ll discuss topics like educating yourself before buying, dispelling myths about cryptocurrency, and understanding just how ownership works with bitcoin. Let’s dive into everything you need to know to purchase bitcoin.
Bitcoin for beginners
It can be intimidating to get into cryptocurrency, especially for the first time. But buying bitcoin doesn’t have to be difficult. In fact, you can learn how to purchase bitcoin with confidence and ease as long as you follow these steps:
- Learn about bitcoin – You wouldn’t purchase a stock before understanding how the stock market works, would you?
- Buy bitcoin – Make your initial bitcoin purchase somewhere you trust.
- Store bitcoin – Make sure your bitcoin is secure and accessible for future use.
Excited about learning how to buy BTC for the first time? It’s certainly an exciting time to get started! Read on to best learn about bitcoin and all it has to offer.
Ask yourself the right questions
Think about all of the things you don’t yet understand about bitcoin, or how to trade cryptocurrency in general. Maybe you already have some knowledge on the subject that you learned from a friend, or maybe you are coming into bitcoin with a clean slate and fresh eyes. Whatever the case may be, before you can ask “How do you buy bitcoin?” you can begin by asking what areas you would like to learn more about before diving headfirst into the bitcoin waters.
You can compile a list of your own questions, or, use the questions below as a jumping-off point:
- What is cryptocurrency?
- What is bitcoin?
- How do I learn more about bitcoin?
- How do I buy bitcoins?
- How can I keep my bitcoin secure?
You should wait to buy bitcoin before you can answer these questions with some level of mastery. You don’t have to be a bitcoin expert, but you do need to better understand how bitcoin works before you move forward with preparing to purchase the cryptocurrency.
Break through the myths
Perhaps, you’ve heard someone unfamiliar with bitcoin as these kinds of questions: Isn’t bitcoin just a tool for criminals? Why should I learn how to buy a bitcoin if it’s just a scam? Don’t let these myths perpetuated by fake news and pop culture get in your way. You have to bust through the most prominent bitcoin myths in order to see the truth of the world’s largest and most influential cryptocurrency.
Among the biggest bitcoin myths are:
- Bitcoin is only used for illegal activities
- Bitcoin is inefficient and unsustainable
- The price of bitcoin fluctuates is too volatile to ever be used
- Governments will eventually shut down bitcoin
All of these myths are so pervasive in popular culture that you may have heard someone say one of these exact sentences at your last cocktail party or heard it on television just the other day. In order to better understand why these ideas are nothing more than folklore, you have to understand bitcoin itself.
How can you bust through bitcoin myths with ease? Education, of course. Learning more about bitcoin, its history, and its future will give you more confidence when it comes time for your first bitcoin purchase. There are valuable resources out there that will provide a foundation of knowledge for you to build upon before purchasing bitcoin.
There’s nothing like a good bitcoin book to snuggle up with before bed. There are a variety of books covering all aspects of bitcoin, from understanding the blockchain to valuing cryptocurrencies as a new asset class. Here are a few to get you started:
- Bitcoin Money will explain bitcoin to you like you’re a child… because it’s literally a children’s book. And even though you may feel silly reading a book made for kids, this is one of the best resources for those who have never heard of bitcoin and don’t understand its purpose.
- Mastering Bitcoin introduces more of the technical aspects of bitcoin, but is a great way to frame any bitcoin purchase so you understand what is actually happening behind the scenes.
- Digital Gold highlights the stories of those involved with bitcoin through the eyes of New York Times reporter Nathanial Popper. The stories will provide insight on how bitcoin got to where it is today.
- The Bitcoin Standard is an unapologetic look at why bitcoin is, and always will be, the most important cryptocurrency on the market.
These are where bitcoin advocates share their knowledge on how to purchase bitcoin and other bits of advice with the world, and everyone is welcome. These social gatherings are great ways to learn all about bitcoin, including how the bitcoin blockchain works, how to buy a bitcoin, and everything in between. You can find a list of upcoming bitcoin conferences and events at the bitcoin core website. Coindesk also has a list of bitcoin events around the world, most of which are available to the general public.
There is no better way to learn than from the best. Experts in the field of bitcoin range from economists to software developers, so their knowledge can be a bit technical. Still, if you ever get a chance, go see one of these speakers:
- Andreas Antonopoulos – The entrepreneur and author has been involved with bitcoin since 2012, before it became the public darling it is today. Antonopoulos hosts a podcast, Let’s Talk Bitcoin, with several other industry experts, and he travels around the globe speaking on the topic to anyone and everyone he can find.
- Jimmy Song – Song looks to impart his wisdom onto the public via Twitter, his book, and online courses where you can learn more about the technical side of bitcoin.
- Jameson Lopp – You might come out of a Jameson Lopp presentation with more than your fair share of technical knowledge, but the developer will wow you with insight you won’t get anywhere else.
- Nick Szabo – While he denies it to this day, some claim Szabo himself is the original creator of bitcoin. Regardless of this legend, the computer scientist and cryptographer was creating cryptocurrencies before bitcoin even existed, and he’s even credited with creating smart contracts, the logic used to enforce a contract digitally.
- Jack Dorsey – Does the name ring a bell? Dorsey is the co-founder and CEO of Twitter along with the payments company Square. But these days, you can find Dorsey more interested in advocating on behalf of bitcoin and the decentralized economy. While he still believes bitcoin is a ways off from mass adoption, you can find many videos online of Dorsey speaking on the merits of the cryptocurrency.
Can’t make it to see a bitcoin expert in the flesh? Each of these experts has a large Twitter following where they disseminate their opinions on the most recent cryptocurrency news. You can also search their names on YouTube to find a variety of talks and interviews to learn more.
The internet is filled with bitcoin resources that explain everything from how to buy bitcoin online to more advanced topics like running a full bitcoin node. However, it’s important to know where to look for bitcoin information, as there are just as many resources that disseminate false or misleading information.
The following resources will give you the baseline knowledge you need to understand bitcoin:
- Bitcoin whitepaper – Why get your information anywhere else but the source? The bitcoin whitepaper, written by the pseudonymous Satoshi Nakamoto, is the end-all-be-all document when it comes to the inner-workings of bitcoin.
- Bitcoin wiki – This resource has endless information about bitcoin from every angle. If you are overwhelmed by the amount of information, head straight to the FAQ section for answers to commonly asked questions.
- Bitcoin vocabulary – Bone up on your terminology with these vocabulary terms most commonly used in the bitcoin lexicon. These will make great conversation starters at your next party!
eToro social feed
Another way you can educate yourself on bitcoin and other cryptocurrencies is by utilizing the social feed on eToro. Users can browse the social feed to ask questions, give answers, and understand the general sentiment of popular cryptocurrencies.
How to buy bitcoin
Now that you’ve got a slew of resources to help you increase your bitcoin knowledge, it’s time to purchase bitcoin for yourself.
Let’s take a step back and think: if you were to purchase a stock, where would you go? A stock exchange, of course! So, if you want to buy bitcoin, you can also go to an exchange. Cryptocurrency exchanges like eToro provide the best way to buy bitcoin with the least amount of hassle. You can buy bitcoin with a bank account, right on the platform. There are other ways to buy bitcoin online, and even in-person, that provide their own benefits and drawbacks.
If you really want to get into the crypto game, you need to find a good exchange.
When it comes to buying bitcoin, exchanges or trading platforms are by far the easiest solution around. Think of them as bitcoin brokers. These sites match buyers and sellers in an efficient manner and allow you to get the best price for your bitcoin purchase. Trading platforms like eToro make it easy to buy bitcoin in an instant and place an order much like you would on an online brokerage. eToro allows you to buy bitcoin online by depositing funds onto the exchange and using the fiat to purchase bitcoin.
Afraid you don’t know enough to buy bitcoin online yourself? Use eToro’s CopyTrader™ feature, and let a top-trader on eToro trade on your behalf. With one click you can copy the best performing traders on the exchange without paying any management or hidden fees.
Back when bitcoin was an unknown entity, the original advocates of the cryptocurrency would transact in a truly peer-to-peer nature, whether it be through in-person meetups or online message boards and forums. Today, you can buy bitcoin from online peer-to-peer marketplaces. Sites like LocalBitcoins match cryptocurrency holders (i.e. cryptocurrency owners) with those looking to buy bitcoin and facilitate a transaction. The buyer and seller agree to a price and transact using the site’s escrow service.
While the p2p nature of LocalBitcoins makes it ideal for purists who avoid centralized entities at all costs, don’t expect to get the best price for your bitcoin purchase, as such marketplaces are much less efficient than a traditional exchange. Additionally, while using an escrow service does offer some form of protection, it is not the most secure way to purchase bitcoin, and scammers have been known to flock to unsuspecting users of p2p sites.
How to keep your crypto secure
Now that you have determined how to buy a bitcoin online, it’s best to find a secure method of storing your new cryptocurrency. While this might sound simple, it’s not such an easy feat. Cryptocurrency storage and security is of the utmost importance, as those without proper storage often find themselves having their bitcoin stolen or lost forever.
In finance, the term for storage of assets is known as “custody.” After you make a bitcoin purchase, you then must decide on a custody solution for your new cryptocurrency. For cryptocurrencies, much like other financial assets, you can choose to have total control over your own cryptocurrencies, or, hand over the reins to a trusted financial institution to provide custody for you.
Because bitcoin is a digital currency, you can’t really hold physical bitcoin in your hands. The only way to truly “own” your bitcoin is by allowing an institution to secure custody of your bitcoin or keeping it in a digital wallet.
Imagine you have just made your first bitcoin purchase through eToro and want to safely store your new asset. The eToro wallet (a crypto wallet) is the best way to secure your bitcoin while making it easy to access at any time in the future. The eToro wallet allows you to send and receive cryptocurrency from other wallets, while maintaining security in a multi-signature solution.
If you want to manage the security of bitcoin yourself, you could opt for self-custody. The safest form of self-custody is via a hardware wallet. That’s because your cryptocurrency on a hardware wallet is in “cold storage,” meaning it’s offline and not prone to malicious attacks. Yet, while safety is paramount for hardware wallet storage, your bitcoin won’t be very accessible. In order to use your cryptocurrency, you will have to connect your hardware wallet to the internet and transfer funds to another wallet address. One last thing: if you use a hardware wallet, don’t forget to copy your recovery seed. Without the recovery seed you could lose access to your entire wallet if it is lost or stolen.
Hopefully, you now can see that buying bitcoin doesn’t have to be a confusing process. You can buy bitcoin with confidence, knowing that your purchase is safe and secure. Bitcoin has the potential to be the next iteration of digital currency. Ask the right questions and do your due diligence to become a more informed bitcoin buyer.
Not everyone is well informed and can understand how to buy bitcoin with their own money, so share this article with anyone who is looking to know how to get started.
eToro USA LLC; Investments are subject to market risk, including the possible loss of principal.
This information is for educational purposes only and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without having regard to any particular investment objectives or financial situation and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past performance of a financial instrument, index or a packaged investment product are not, and should not be taken as a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this guide. Make sure you understand the risks involved in trading before committing any capital. Never risk more than you are prepared to lose.