Since 2009 friends and associates have been encouraging me to look into Bitcoin. They’ve touted the benefits and advantages of Bitcoin over fiat currency. Today—millions of people are investing Bitcoin (BTC), using it to purchase goods and services, or including Bitcoin as part of their investment strategies. In this article, I address how you can buy BTC, and tools you can use to manage it.
First, determine how much you want to invest. While it’s trading at just over $8,000—you may be able to buy 100 BTC, or none at all at that price. So—instead, you can buy a fraction of a Bitcoin.
According to Cryptocurrency Facts “You don’t have to buy a whole Bitcoin to own Bitcoin, you can buy a fraction of a Bitcoin. You can own as little as 0.00000001 BTC (AKA 1 satoshi).” At this fraction, you can own Bitcoin for as little as $0.00008. Here’s how that works: Let’s say the current price of Bitcoin is $8,000, at that price one satoshi (sat) —the smallest unit of value in BTC—would cost you $0.00008.
While you could buy Bitcoin for under a dollar, exchanges typically won’t work with buy orders under $5. So—you will need to buy at least $5 worth of Bitcoin. Then, consider transaction costs, which range from 10 cents to a dollar. To make it worth your while, you will want to enough Bitcoin to cover all of your transaction costs. (Cryptocurrency Facts)
Next—you will need to consider fees when you buy Bitcoin on an exchange, which as of this writing are in the neighborhood of $3. When you do the math—that means you’re looking at from $20 to $25 of Bitcoin to cover costs and still have enough value to realize a return on your investment. Still, for most people, they will be able to get into Bitcoin and not miss out on an opportunity to gain from expected increases in Bitcoin value.
After considering how much you can invest in Bitcoin, the next step is selecting the right wallet or exchange you can use to buy and sell your coin.
Getting Your Coin
To start using Bitcoins, do a little research. The following is intended to help you narrow your search. To begin buying and using Bitcoin, you will need to get a Bitcoin wallet, then buy Bitcoins to use, and then you can start to use them. Let’s take a quick tour.
— Buy For Bitcoin (@BuyForBitcoin) January 9, 2019
Setting up a Bitcoin wallet is simple. And—there are many quality wallets from which to choose. Some you can use from your mobile device. Other options include exchanges you can use on your desktop. The most convenient and portable way to get and use Bitcoin is with a mobile wallet. Here’s a short list of mobile wallet options.
- Atomic Wallet
- Ledger Nano S Wallet
- Ledger Nano X Wallet
- TREZOR Model T Wallet
- TREZOR One Wallet
If you prefer to use your desktop—you can also get Bitcoins from one of the many exchanges. Here’s a list of exchanges that support Bitcoin.
- BTC-e BuyUcoin
- Gemini Huobi
Now that you have a list of wallets and exchanges, you can make a choice based on whether you want control over your coin, or whether you want to go the easy way to manage your coins.
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According to Ulrich Djowamon (Hackernoon), there are only two types of wallets: custodial, and non-custodial. When evaluating a wallet to use, be sure you select the right one. Here’s the distinction.
With custodial wallets, you rely on the company to manage your Bitcoin. You simply log in with your password to access your coin. While it’s easy, you do not control anything. These services have been known as being favorite targets of hackers.
The majority of traditional exchanges are in this category.
The other category for wallets are user controlled wallets—that is the non-custodial wallet. With this option “you are the only master on board”. No one has access to your Bitcoins. You become your own bank, and it’s easy for you to import contents of one wallet into another one. While you maintain control, you must also respect a few rules and best practices. One significant disadvantage: If you lose your mobile—and you haven’t saved your keys—you will completely lose access to your Bitcoins. Be sure to securely save the keys to your wallet.
If buying Bitcoin is new to you—you now have a good understanding of how and where you can go to buy Bitcoin. You do have the option to control and manage your own coins, or you can allow custodial services to manage it for you.