Note: This is not financial advice. This is for educational purposes only. Please note that cryptocurrency is a highly volatile asset class; only invest what you can afford to lose.
“How to buy Bitcoin” remains a popular search query on Google despite the current volatile cryptocurrency climate. Why? Well, as the old saying goes, “buy low, sell high.” As the price of Bitcoin halves from its all-time high of $64,000, investors are getting the most popular cryptocurrency at a discount.
Maybe you too want to take a risky step in the Bitcoin bonanza, but you don’t know how to start. Fortunately, it is much easier than you think. Bitcoin is not only a well-established cryptocurrency, but it is the most widely used digital asset in the world, so you don’t have to jump through hoops to buy it (unlike safe moon).
However, before you buy Bitcoin, you need to know what you are getting into. We will dive into what exactly Bitcoin is, as well as its pros and cons, so that you are well informed about the risks involved in buying Bitcoin.
What is Bitcoin?
Bitcoin, the brainchild of Satoshi Nakamoto, was born out of the rage against the traditional monetary system, especially after the devastating financial crisis of 2008.
The housing market crashed, millions lost their jobs, retirement accounts fell to painful lows – it was an absolute nightmare. Institutional confidence plummeted; Americans were furious that their wealth was in jeopardy due to the shady practices of the big banks.
Determined to launch a financial system without central authorities (for example, banks and government agencies), Nakamoto launched Bitcoin in 2009. Bitcoin is a virtual currency that uses blockchain technology, or a peer-to-peer network, that prevents third-party intermediaries take control and make the decisions. If the word “blockchain” is too abstract for you, just imagine a network of computers communicating with each other to validate transactions. Anyone can participate in the Bitcoin blockchain.
If you decided to get on the Bitcoin network, you would be called a “miner”. You would need powerful hardware to solve mathematical algorithms to confirm incoming transactions, and in return you would receive Bitcoin rewards for your contributions. However, because Bitcoin mining is such an energy-intensive practice, it is drawing the ire of green groups.
Even Nvidia is trying to discourage Bitcoin miners from buying their graphics cards for gaming (GeForce RTX 30-series GPUs they are gems for miners who want to earn Bitcoin at a fast rate). However, Nvidia is ready to launch a mining focused graphics card (opens in a new tab) early.
While Bitcoin is revolutionizing the GPU industry, it is also shaking up the global economy. Bitcoin was not taken seriously at first, but as various major tech companies like Tesla, MicroStrategy, Paypal, and Square amassed the cryptocurrency, faith in Bitcoin grew stronger. Hell, an entire nation (i.e. El Salvador) decided to adopt Bitcoin as legal tender, thus cementing its position in the financial world.
Bitcoin pros and cons
Some aspects of the popular currency are worrying. But before we dive into the negatives, let’s start with the pros.
1. You can buy a fraction of a Bitcoin. The value of Bitcoin rose to tens of thousands of dollars, which may scare beginner investors with a small budget. Fortunately, you can buy a fraction of Bitcoin. If you wanted to buy just $10 worth of BTC, no one would stop you.
two. Bitcoin is the most established cryptocurrency in the world. It’s gotten recognition from big-name tech companies, and even a country, so it’s likely to stick around for a while (unlike SafeMoon and Shiba Inu).
3. Bitcoin is the most accessible cryptocurrency. You can buy and sell Bitcoin on all major exchanges.
Four. Bitcoin’s mission is to decentralize the financial system. In much the same way as the birth of “decentralized” internet information (for example, people no longer depend on a few selected TV authorities for news), Bitcoin seeks to push back against finger-wagging authorities and promote a system from peer to peer.
5. Bitcoin’s Reputation as a “Conduit for Illicit Activity” Is Unfounded. Criminals wouldn’t touch Bitcoin with a ten foot pole. According to decipher, a former CIA director admitted that cryptocurrency is a boon for surveillance. In fact, investigating misconduct on the Bitcoin blockchain is much easier for crime fighters than tracing illegal transactions in traditional financial systems.
Now let’s dive into the cons.
1. bitcoin is a dinosaur. Every year, new crypto projects spring up to stick their tongues out at Bitcoin and sing, “Anything you can do, I can do better! I can do anything better than you!” And honestly, they have a point. Bitcoin is old and decrepit. At any moment, a young and lively crypto network can overtake Bitcoin and steal its shine.
two. Bitcoin is AF slow. Transferring Bitcoin from a Coinbase account to another wallet could take almost 24 hours! Now, it doesn’t always take that long. The average transaction time is 10 minutes. However, a congested network can make your transaction difficult. A negligible network fee can also stop you. In other words, if the transaction fee you offer miners is too low, you will lose priority and be sent to the back of the queue.
3. bitcoin is volatile. Hold on tight! Bitcoin is a roller coaster. On June 15, Bitcoin was trading at $40,000. A week later, it crashed to $29,000. As of this writing, you’re already back at $34,000.
Four. bitcoin is expensive. Bitcoin is expensive, which means the room for potential growth is narrower compared to Dogecoin, for example, which is currently trading at just 25 cents.
5. Bitcoin is extremely susceptible to news and tweets. Bitcoin’s downturn began with a tweet of concern for the environment from Elon Musk, but at the same time, Bitcoin’s rally to $64,000 was partially fueled by Tesla’s news of accepting Bitcoin as payment.
Now that you have a general idea of what you are getting into, let me show you how to buy Bitcoin.
how to buy bitcoin
Coinbase is arguably the most beginner-friendly exchange out there – it’s like the Robinhood app of crypto platforms. Coinbase is insured to protect its customers from hackers, the user interface is as smooth as a baby’s bottom, and it even offers free crypto if you watch short educational videos. Once you sign up and link your bank account to Coinbase, this is how you can buy Bitcoin.
1. Click the “Buy/Sell” button in the upper right corner of the home page.
2. A small window will appear with three tabs: Buy, Sell and Convert. Make sure “Buy” is selected.
3. Fortunately, Bitcoin is the default cryptocurrency, so you don’t need to go through the hassle of selecting the digital asset you want to buy from the dropdown menu.
4. You can choose from five pre-selected amounts of how much Bitcoin you would like to buy: $10, $50, $100, $500 and 1000. Or, if you prefer, you can click “Custom” to type in a specific amount.
5. A new window will appear. This is the preview of your order. Check everything to make sure everything is correct; you will also see the Coinbase fee for the transaction.
6. If you agree with everything, click “Buy Now”.
Congratulations! You are now a Bitcoin holder. In the future I would suggest getting a Ledger Nano S (opens in a new tab) (a USB hardware wallet device) to store your newly acquired Bitcoin offline. That way, even if something sinister happens to Coinbase, you’ll still have your Bitcoin safe and sound.